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Marks and Spencer is to pay a dividend for the first time since the pandemic as bumper food sales powered the UK retailer to a better than expected first-half profit.
The company said on Wednesday that it made pre-tax profits of £326mn in the first half of its financial year, up from £208mn in the same period last year. Food sales climbed almost 15 per cent.
M&S declared a 1p per share interim dividend, its first payout since before the Covid-19 pandemic.
The revival in the retailer’s fortunes catapulted it back into the FTSE 100 index of blue-chip companies this year. The group’s shares have climbed 82 per cent since January, making it the second-best performer in the index after Rolls-Royce.
However, M&S sounded a note of caution for the remainder of the year and next. “As we enter 2024, we are not relying on the favourable recent market conditions persisting,” the company said. “The outlook remains uncertain with the probable impact on the consumer of the highest interest rates in 20 years, deflation, geopolitical events, and erratic weather.”
It added: “Against more challenging comparatives, we expect profit before tax and adjusting items to be weighted towards the first half.”
First-half profits comfortably exceeded analysts’ forecasts. In a note, Clive Black at Shore Capital said the first half had been “quite staggeringly successful” and that he was upgrading his profit forecasts for the year.