Dividend slashed as M&S profits slump to £604.4m
May 20 2009 By The Journal
MARKS & Spencer has slashed its dividend payment by a third as it reported a 40% drop in full-year profits.
The bellwether stock saw its share price fall 10% yesterday after revealing that heavy discounting and price reductions in the recession had seen profits slump to £604.4m – leaving behind last year’s triumphant result when profits jumped above £1bn for the first time in a decade.
M&S boss Sir Stuart Rose said the year had been a "difficult" one, but added: "It has not got any worse" as he unveiled results which were still better than many analysts expected.
The retailer said in light of an "uncertain economic outlook" it had decided to cut its full-year dividend payment to investors by 33% and Sir Stuart said directors were unlikely to be paid a bonus. It is the first time it has made a cut since 2000.
That its results were not as bad as expected helped send the pound to its highest level against the dollar this year at $1.55.
It went up against the euro on speculation the government has begun talks on selling stakes in part-nationalised banks.
Like-for-like UK sales for the full year to March 28 were down 5.9%, including a 6.9% drop in general merchandise and a 5% decline in food.
In January M&S announced plans to axe up to 1,230 jobs through the closure of 26 stores and cuts at its head office.
