Marks and Spencer Group Plc

Full Year Results for the 52 Weeks Ended 29 March 2025

"RESHAPING FOR GROWTH"

 

Third consecutive year of growth and strong balance sheet

·    Profit before tax and adjusting items up 22.2% at £875.5m (2023/24: £716.4m), highest in over 15 years

·    Statutory PBT down 23.9% at £511.8m (2023/24: £672.5m); £248.5m non-cash impairment of investment in ORL

·    Food sales up 8.7% to £9.0bn; adj. operating profit £484.1m (2023/24: £388.4m); margin of 5.4%

·    Fashion, Home & Beauty sales up 3.5% to £4.2bn; adj. operating profit £475.3m (2023/24: £437.5m); margin of 11.2%

·    International constant currency sales down 7.1% to £0.7bn; adj. operating profit £46.3m (2023/24: £47.8m)

·    Ocado Retail Limited (ORL) JV share of adj. loss £28.7m (2023/24: £37.3m share of adj. loss)

·    Adjusted return on capital employed increased to 16.4% (2023/24: 14.1%)

·    Full year dividend increased by 20% to 3.6p

·    Very strong balance sheet; £443.3m free cash flow from operations and £437.8m net funds excluding lease liabilities

 

Increasing investment in Reshaping M&S to drive sustained growth

·    Food volume and value share growth for three years. LFL sales up 8.6% in 2024/25.

·    Fashion, Home & Beauty value share growth for three years. LFL sales up 4.4% in 2024/25.

·    International resetting for future growth, developing a capital light operating model.

·    Structural cost reduction of c.£120m in 2024/25; ambition to achieve cumulative savings over £500m by 2027/28.

·    New Food and Full Line stores opened in last three years generating paybacks ahead of hurdle rates.

·    Increasing capital investment in 2025/26 to £600m-£650m net of disposals to fuel growth and resilience.

·    Expected cyber incident impact of c.£300m on 2025/26 operating profit, before cost mitigation, insurance and trading actions.

 

Group Results (52 weeks ended)	29 March 2025	30 March 2024	Change (%)
Statutory revenue	£13,816.8m	£13,040.1m	6.0%
Sales1	£13,914.3m	£13,109.3m	6.1%
Operating profit before adjusting items	£984.5m	£838.6m	17.4%
Profit before tax and adjusting items	£875.5m	£716.4m	22.2%
Adjusting items	(£363.7m)	(£43.9m)	n/a
Profit before tax	£511.8m	£672.5m	-23.9%
Profit after tax	£291.9m	£425.2m	-31.3%
Basic earnings per share	14.6p	21.9p	-33.3%
Adjusted basic earnings per share	31.9p	24.6p	29.7%
Dividend per share	3.6p	3.0p	20.0%
Adjusted return on capital employed	16.4%	14.1%	2.3% pts
Free cash flow from operations	£443.3m	£437.8m	n/a
Net debt	(£1.79bn)	(£2.17bn)	n/a
Net funds excl. lease liabilities	£437.8m	£45.7m	n/a

 

¹References to 'sales' throughout this announcement are statutory revenue plus the gross value of consignment sales ex. VAT.

Results of Republic of Ireland (ROI) have been reclassified from International to be reported within Food and Fashion, Home & Beauty

The share of results in ORL relates to the 57 weeks to 6th April 2025 versus the 53 weeks to 3rd March 2024

Non-GAAP measures and alternative performance measures (APMs) are discussed within this release. A glossary and reconciliation to statutory measures is provided at the end of this document. Adjusted results are consistent with how business performance is measured internally and presented to aid comparability. Refer to Notes 1 and 3 of the financial information for further details.

 

 

Stuart Machin, Chief Executive

 

"Three years ago, we introduced our Reshaping M&S for Growth plan with the objective of protecting the magic of M&S and modernising the rest. Executing that strategy has delivered a third consecutive year of growth in sales and market share, profit and improving return on capital. Disciplined capital allocation and a much stronger balance sheet have put M&S on a robust financial footing, increasing resilience and creating capacity for future growth. M&S has net funds of over £400m and we are in our best financial health for nearly 30 years.

Our Food business had another strong year as more customers chose to fill their trolleys with M&S food, more often. Our continuous investment in quality, value and innovation is paying off.  We've outperformed the market over the past three years and I'm confident we will continue the momentum and grow a bigger, fresher Food business.

In Fashion, Home & Beauty, our authoritative lead in quality and value perception and much improved style credentials has broadened appeal and grown market share. This renewed strength in product gives us the foundation to drive future growth through transforming our end-to-end supply chain and accelerating online. Consistent market outperformance over the past three years demonstrates the improvements we've made and I'm confident that with focused execution, we can deliver our plan.

Overall, last year was another year of strong performance, and there are so many opportunities still ahead of us. As outlined at last year's Capital Markets Day, we will continue our plan to invest in our key growth areas: Store rotation, supply chain and technology.

We started the new financial year as we finished the last, with sales growth ahead of budget across both businesses. Over the last few weeks, we have been managing a highly sophisticated and targeted cyber-attack, which has led to a limited period of disruption. We have tackled this head on with incredible spirit, teamwork and deep sense of responsibility as we prioritised serving our customers.

It has been challenging, but it is a moment in time, and we are now focused on recovery, with the aim of exiting this period a much stronger business. There is no change to our strategy and our longer-term plans to reshape M&S for growth and, if anything, the incident allows us to accelerate the pace of change as we draw a line and move on.

Over the last 140 years, M&S has overcome many challenges - testament to the longevity of this brand. This incident is a bump in the road, and we will come out of this in better shape, and continue our plan to reshape M&S for customers, colleagues and shareholders.

I would like to thank all of our colleagues and supplier partners for their hard work and dedication and, importantly thank our customers. They have been unwavering in their support, and we are incredibly grateful for their patience and trust in M&S."

END

 

CYBER INCIDENT AND OUTLOOK

M&S entered the new financial year with strong trading momentum, with both Food and Fashion, Home & Beauty trading ahead of budget.

Over the last few weeks, we have been managing a highly sophisticated cyber incident. As a team, we have worked around the clock with suppliers and partners to contain the incident and stabilise operations, taking proactive measures to minimise the disruption for customers.

We are seeking to make the most of the opportunity to accelerate the pace of improvement of our technology transformation and have found new and innovative ways of working.

We are focused on recovery, restoring our systems, operations and customer proposition over the rest of the first half, with the aim of exiting this period a much stronger business.

Since the incident, Food sales have been impacted by reduced availability, although this is already improving. We have also incurred additional waste and logistics costs, due to the need to operate manual processes, impacting profit in the first quarter.

In Fashion, Home & Beauty, online sales and trading profit have been heavily impacted by the necessary decision to pause online shopping, however stores have remained resilient. We expect online disruption to continue throughout June and into July as we restart, then ramp up operations. This will also mean increased stock management costs in the second quarter.

Therefore, our current estimate before mitigation is an impact on Group operating profit of around £300m for 2025/26, which will be reduced through management of costs, insurance and other trading actions. It is expected that costs directly relating to the incident will be presented separately as an adjusting item.

Overall, our strategy remains the same and there is no change to our longer-term plans to reshape M&S for growth. We are confident that we will enter the second half with a strong customer proposition, returning to the performance we were delivering immediately prior to the incident and throughout 2024/25, which is outlined in the following sections.

RESHAPING FOR GROWTH

At the October 2022 Capital Markets Day, we set out the strategy of reshaping M&S to deliver faster growth and higher returns. Our objectives included growing market share in both UK businesses by 1% by 2027/28 and targeting operating margins of over 4% in Food and 10% in Fashion, Home & Beauty. These are supported by structural cost reductions of over £500m, disciplined capital allocation and investment within an envelope of £500-600m per annum.

Over the last three years, consistent execution has delivered growth in sales, market share, margins, and return on capital. As a result, the business has reduced net debt by c.£900m and reinstated a dividend for shareholders. M&S is in its best financial health for nearly 30 years.

This strong balance sheet enables us to continue to invest to Reshape M&S, with capital expenditure of c.£600m-£650m planned for the current year, net of disposals. We have generated strong returns from our store investments and are increasing the pace of store rotation. The acquisition of Gist and changes to the Fashion, Home & Beauty supply chain provide the foundations to modernise the network and create capacity for growth. Last year we started a multi-year plan to upgrade our technology foundations and increase digital capability. We are accelerating this plan, making use of the recent disruption to reach our target state more quickly.

Our strategy remains the same - to protect the magic of M&S, while modernising the rest.

Creating exceptional products

We aim to be the most trusted retailer, with quality products at the heart of everything we do. M&S Food is broadening its appeal by delivering a consistent drumbeat of innovation and quality upgrades, while continuing to invest in trusted value. We continue to progress towards being a 'shopping list retailer', focused on families, with the soul of a fresh market.

Fashion, Home & Beauty's commercial model of buying more deeply into core lines, elevating quality, and increasing style is resonating, attracting new customers. Market share of both volume and value has increased in both businesses, although opportunities remain for future growth in underpenetrated categories and in Home & Beauty.

Driving profitable sales growth

Store rotation and renewal aims to create 420 bigger, fresher Food stores and a more productive group of 180 Full Line stores, with half of the estate expected to be in the renewal format by 2027/28. Returns on new and renewed stores have been above our hurdle rates overall, trading ahead of plan for three consecutive years. The pace of new openings is being increased, securing sales growth for the long term.

Online growth ambitions aim to increase the M&S.com share of Fashion, Home & Beauty sales from 34% to 50% in the medium term. Online sales growth accelerated in 2024/25 as marketing was rebalanced towards our social channels and top tier partner brands were launched online. Improvements to the website also supported increased customer frequency. Our focus now turns to improving the online offer and experience, transforming Fashion, Home & Beauty into a fully omnichannel business, with best-in-class delivery and returns.

International has store presence in 29 countries through a series of strategic partnerships, which offer the potential for global growth in the medium term. Recent trading challenges, particularly in India, are being addressed under new leadership. The International reset focuses on capital light growth, using the infrastructure of our franchise partners in established markets, working with leading online marketplaces, and identifying opportunities in wholesale. This year, investment in trusted value is planned and new commercial arrangements will be established to drive volume.

Ocado Retail's combination of M&S product and broad choice supported by automated fulfilment, offers the potential for a profitable route to market for online grocery in the medium term. In 2024/25 active customer growth and sales accelerated as Ocado Retail invested in value and improved delivery service. However, the drop through to profitability was disappointing. The near-term focus includes improving the customer shopping experience and optimising existing fulfilment centres to deliver increased profitability and cash flow, before considering investment in additional capacity. From 2025/26, the results of Ocado Retail will be consolidated into M&S Group reporting as technical control of the 50/50 joint venture passes to M&S.

Delivering target operating margins

Over the past three years, the combination of driving sales growth through volume and structural cost reductions across stores, the support centre and the supply chain has enabled M&S to improve profitability and has delivered operating margins of 5.4% in Food and 11.2% in Fashion, Home & Beauty; ahead of our targets. This in turn has allowed the businesses to reinvest in quality and value, further driving volume growth.

Structural cost reductions of c.£300m have been made over the past three years, with £120m being delivered in 2024/25. More than half of last year's savings were generated in stores, through investment in technology and improvement in store processes.

Food supply chain volumes have increased more than 11% over the past three years putting pressure on operations. This is being addressed through in-store processes, the completion of forecasting, ordering and allocation systems and partnering with strategic suppliers. The acquisition of Gist has also delivered improved logistics service and a contribution of more than £60m to profit, which provides the foundations for a long-term investment to modernise the network and create efficient capacity for growth. This year will see the first steps with construction of a new depot near Bristol.

Fashion, Home & Beauty's supply chain transformation programme is still in its early stages, having taken initial steps to consolidate the supply base and deliver cost savings from investment in new warehouse capacity. Under John Lyttle's leadership there will be increased focus on restructuring the end-to-end operation, which includes the adoption of a new merchandise and range management system, increased automation in the logistics network to support more profitable online growth, and improving the resilience and flexibility of the supply base.

Continued simplification of store operations and the support centre plus investments in automation and efficiency provide scope for further cost savings.

Building the M&S we need to be

Reshaping M&S is underpinned by three programmes which aim to create a high-performance, customer-centric culture, enable better decisions and service through strong digital and technology foundations and deliver value to shareholders through investment in growth, combined with disciplined capital allocation.

We are creating a highly talented team who are close to customers and front-line colleagues, taking accountability for delivery and continuous improvement. This includes identifying high-potential colleagues for leadership development, taking on bigger or broader roles in the future. However, there remains more to do to simplify processes and reduce tasks for stores, to enable better customer service.

In 2023, a strategic review of digital and technology was initiated, which identified that although there had been significant investment in digital applications and data development, work was required to improve the tech stack, reduce reliance on outsourcing and to integrate better into the business areas. In early 2024, Rachel Higham was recruited to lead Digital & Technology as a member of the Executive Committee. At the Capital Markets Day, we outlined the need for investment in upgrading technology infrastructure which has over time increased running costs and made processes complex and inefficient.

In the light of the recent cyber incident, we are using the disruption to bring forward investment, rephasing the original programme, accelerating plans to upgrade infrastructure and network connectivity, store and colleague technology, and supply chain systems. This will reduce the inter-dependency of systems and improve operational resilience. Our overall aim remains the same, to improve technology foundations, simplify infrastructure and applications, to increase resilience further, and lower technology run costs.

Strong balance sheet and growing dividend

Our disciplined capital allocation and investment framework prioritises investment in growth, alongside free cash flow. Over the past three years, the generation of free cash flow, reduction in both gross and net debt and delivery of improved return on capital has in turn led to an upgraded credit rating from both S&P and Moody's.

A strong balance sheet enables additional investment, and we are increasing capital expenditure, net of disposals to c.£600m-£650m in 2025/26, of which £200m-£250m will be invested in further improving technology infrastructure, planned store maintenance and upgrades to the logistics fleet and network. Growth and cost-out investment is expected to be £400m-£450m, which includes increased new store openings and supply chain capacity. Investment will also be made in the new Fashion, Home & Beauty planning platform which connects all activities from buying to replenishment deliver our customers an improved online and personalised shopping experience.

The improved performance and balance sheet give us confidence in the prospects for medium term growth, and we are announcing an increase in the dividend of 20%. This results in a proposed final dividend of 2.6 pence and a full year dividend of 3.6 pence for 2024/25. We expect the interim dividend for 2025/26 to be one third of the prior year total. A strong balance sheet, cash flow performance, and dividend cover allow for growth of returns to shareholders in the medium term.

FOOD SUSTAINS VOLUME GROWTH WITH CONSISTENT INVESTMENT IN QUALITY, VALUE AND INNOVATION

Food sales increased 8.7%, with like-for-like growth of 8.6%, driven by UK volume growth of 6.7% with strong growth in core categories. Market share was up 27bps to 3.9% for the 52 weeks to 23 March 2025. Adjusted operating profit margin increased to 5.4% from 4.7% due to sustained volume growth, and with cost reduction initiatives largely offsetting operating cost inflation.

Building a shopping list retailer

·      Prices were 'dropped and locked' on key shopping list items such as salmon fillets and fresh soups and Remarksable Value lines such as potatoes and tinned tomatoes. This helped to increase customer perception of M&S value for money to a ten year high, in an increasingly promotional market.

·      Product quality was upgraded on over 1,000 lines such as Indian meals, Gastro and Pizza as partners invested in improved capabilities, widening the M&S quality premium to peers. Sales of 'Dine-In' meals also grew, as customers increasingly see M&S as an alternative to eating out.

·      More than 1,400 new lines were launched, creating a consistent drumbeat of innovation during the year, driving increased customer interest and frequency. 'Viral' product hits have included pistachio crème, lemon hot cross buns and in-store bakery cookies.

·      As a result, larger basket shops grew 13% as customers chose M&S for more of their everyday shopping.

New stores generating returns ahead of hurdle rates

·      During 2024/25 six Food stores and two Foodhalls in Full Line stores opened. These averaged c.15,000 sq ft, enabling more customers to shop the full range. In a strong year, Food sales outperformed target by c.20%.

·      Nine new renewal stores and one extension traded ahead of target, with renewal stores including Chancery Lane and Fosse Park. Food sales in Chancery Lane were up c.35% on previous levels.

·      A further nine Food stores and two extensions are planned for 2025/26 including Fulham, Putney and Clapham.

Developing a trading model which sustains growth

UK Food volumes have grown 11% over the past three years, putting pressure on operations. This is being addressed through a series of changes to create a more modern, cost-effective flow of product.

·      Long term supplier agreements are being implemented across partner sites, with the aim to increase this in 2025/26. This protects the 'magic' of M&S Food, enabling investment in upgrading capacity, while generating savings which can be re-invested in quality and value.

·      The roll out of the new forecasting and ordering system was completed. This helps to better match supply to variable demand, although there is further opportunity for improvement.

·      The 'One Best Way' retail operations programme is helping to improve productivity, reducing stock file errors and making the new forecasting system more effective.

·      Capacity constraints mean that many stores do not receive their deliveries from the most efficient site. To support growth, work is underway on a new multi-temperature depot in Bristol and to identify a site for a new national distribution centre.

FASHION, HOME & BEAUTY BECOMING A DESTINATION FOR QUALITY, VALUE AND STYLE

Fashion, Home & Beauty sales increased 3.5%, with LFL sales up 4.4%. Sales grew 4.7%, adjusted for the exit of furniture in 2024. Market share was up 57 bps to 10.5% for the 52 weeks to 30 March 2025. Adjusted operating profit margin was above target at 11.2% compared with 10.7% last year, as investments in digital and technology were partly offset by improved sourcing and cost savings.

Increased style driving broader appeal

·      Perceptions of quality and value increased further and remain market leading. M&S is now ranked second for style compared with sixth in 2022.

·      Women's and men's grew in categories such as jeans, knitwear and tops, with strong seasonal campaigns and collaborations helping to drive style perceptions.

·      Autograph sales grew 47% as customers invested in higher quality, versatile products at the top end of the range. Men's Autograph sales of c.£200m compare with just £50m three years ago.

·      In a declining kidswear market, there was growth in baby and market share growth in kids casual. A 'first price, right price' approach is being implemented, removing promotions and offering competitive prices on everyday essentials.

·      Home saw good growth in collaborations such as Kelly Hoppen, and beauty grew own brand fragrance sales. Both offer significant potential for long term growth and are being refocussed under new leadership.

Early improvements to online but further improvement required

·      Online sales, adjusted for the exit of furniture, represented 34% of sales. Growth was driven by active customer growth of 9% to 10.2m, as marketing was refocused towards brand and social channels.

·      Improvements to the offer included upgraded imagery, navigation and availability in smaller sizes.

·      Partner brand fashion sales online increased 42%. Recent top tier brand additions have included Hush, Tommy Hilfiger and Calvin Klein. The overall brands business exceeded £200m sales for the first time in 2024/25.

·      There remains a lot more to do to create a market-leading online business. Further work is needed in planning, ranging, in-store selling, delivery and fulfilment to drive online towards an ambition of 50% of Fashion, Home & Beauty sales in the medium term.

New Full Line stores generating returns ahead of hurdle rates

·      During 2024/25, two new Full Line stores at Dundee and Washington Galleries opened with their Fashion, Home & Beauty sales trading 15% ahead of plan. Fosse Park was extended during the year, with Fashion, Home & Beauty trading up 20% versus last year.

·      The Battersea Fashion-only trial store opened in December 2024, generating strong customer and partner interest and will provide inspiration for future renewal stores, including The Pantheon on Oxford Street.

·      Two Full Line flagships are planned for 2025/26. They are the relocation of Bath and the opening of Bristol Cabot Circus.

Increasing focus on operational efficiency

As product appeal increases in Fashion, Home & Beauty, the business remains constrained by its legacy supply chain and outdated processes, with the programme to modernise the supply chain in its very early stages. John Lyttle will increase the focus on execution in 2025/26.

·      Creating long-term sourcing partnerships. This will enable investment in capacity and capability for future growth and help capitalise on emerging opportunities to find new sources of supply.

·      Implementing a new planning platform to link all buying activities from budgeting to replenishment, removing duplicative manual activities.

·      Investing in efficient storage and automation in the logistics network. This will increase capacity to serve online orders, improve service and reduce costs.

·      A focus on better in-store processes, identifying and removing unnecessary tasks to mitigate the impact of increased costs in a flat market for store sales.

INTERNATIONAL RESETTING AND REFOCUSING FOR GROWTH

The ambition for International is to build a global omni-channel business, which brings the magic of M&S to customers around the world. Utilising the expertise and infrastructure of strategic franchise partners in established markets, working with leading marketplaces to drive online growth, and securing new opportunities in wholesale.

Sales were down 7.1% at constant currency, although performance started to improve in the second half. Owned sales were down 8.0% driven by weak trading in India. Franchise sales were down 5.2%, driven by partner de-stocking in Fashion, Home & Beauty, although this was partly offset by growth in Food.

Operating profit before adjusting items was slightly down versus last year at £46.3m (margin 7.0%) from £47.8m (2023/24: 6.6%), with an improved result in the second half.

Future growth potential through investment in value and expanded partnerships

·      The joint venture in India is being reset under new leadership, shifting to a full price trading approach and starting to reduce costs.

·      Initial investment in trusted value in owned markets has generated encouraging results. In the coming months, this will be expanded into franchise markets, alongside updated commercial terms and operating principles.

·      We aim to grow the marketplace business in Europe using partners established fulfilment capabilities to improve customer service.

OCADO RETAIL DELIVERS STRONG VOLUME GROWTH, LOSSES REDUCED IN THE YEAR

During 2024/25 M&S accounted for its share of results in the joint venture as an associate interest. From 2025/26 Ocado Retail Limited will be consolidated in the results of M&S in accordance with the joint venture agreement and will align with the year-end accounting period of M&S. These results therefore cover the 57 weeks to 6 April 2025 and include an M&S Group share of adjusted loss of £28.7m.

To aid future comparability, all commentary below relates to the 12-month period ended 30 March 2025.

·      Revenue increased 15.5% to £2.8bn, with orders up 15.2%, supported by growth in active customers and increased frequency. Average selling price was broadly level, as Ocado Retail invested in value through 'Big Price Drops' and the Ocado Price Promise.

·      M&S sales volumes increased 20.2% and were 30.3% of total Ocado volumes (2023/24: 29.0%). M&S sales participation was c.50% in fresh categories such as produce and poultry.

·      The overall result continued to be constrained by high service delivery costs and continuing lease and technology fees for the old Hatfield site. There remains substantial opportunity for improved customer fulfilment centre (CFC) productivity.

 

In the year ahead, there will be increased focus on improving delivery efficiency and maximising capacity utilisation of the existing network, which is critical to improving productivity and profitability before investing in new capacity. This includes migration to the Ocado Smart Platform (OSP) solution across e-commerce, last-mile, supply chain, customer hub and trading systems.

 

For further information, please contact:

Investor Relations

Fraser Ramzan: +44 (0) 7554 227 758

Helen Lee: +44 (0) 7880 294 990

Media Enquiries:

Corporate Press Office: +44 (0) 20 8718 1919

 

Investor & Analyst presentation and Q&A: 

 

A pre-recorded investor and analyst presentation will be available on the Marks and Spencer Group plc website here from 7:30am on 21^st May 2025.

 

Stuart Machin and Jeremy Townsend will host a Q&A session at 9:45am on 21^st May 2025:

 

For the quickest joining experience, please register prior to attending the call here. After registering, you will be given unique dial in details to join the call.

 

Alternatively, you can use the below details to join the call but please join 5-10 minutes before the start time in order to register your details with the operator.

 

Dial in: +44 (0) 33 0551 0200

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Replay: A recording will be available for 48 hours after the call here

 

Important Notice: The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences and prospects are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect Marks & Spencer's current expectations concerning future events and actual results may differ materially from current expectations or historical results. Any forward-looking statements are subject to various risks and uncertainties, including, but not limited to, failure by Marks & Spencer to predict accurately customer preferences; decline in the demand for products offered by Marks & Spencer; competitive influences; changes in levels of store traffic or consumer spending habits; effectiveness of Marks & Spencer's brand awareness and marketing programmes; general economic conditions including, but not limited to, a downturn in the retail or financial services industries; acts of war or terrorism worldwide; work stoppages, slowdowns or strikes; and changes in financial and equity markets. For further information regarding risks to Marks & Spencer's business, please consult the risk management section of the 2025 Annual Report (pages 52-58).

 

 

2024/25 FULL YEAR FINANCIAL REVIEW

Financial Summary

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 Restated £m1	Change vs 23/24 %
Group statutory revenue	13,816.8	13,040.1	6.0
Group sales	13,914.3	13,109.3	6.1
Food	9,021.0	8,298.8	8.7
Fashion, Home & Beauty	4,235.3	4,091.4	3.5
International	658.0	719.1	(8.5)
Group operating profit before adjusting items	984.5	838.6	17.4
Food	484.1	388.4	24.6
Fashion, Home & Beauty	475.3	437.5	8.6
International	46.3	47.8	(3.1)
Share of result in Ocado Retail Limited2	(28.7)	(37.3)	23.1
M&S Financial Services / Other	7.5	2.2	n/a
Net interest payable on lease liabilities	(110.2)	(110.5)	0.3
Net financial interest	1.2	(11.7)	n/a
Profit before tax and adjusting items	875.5	716.4	22.2
Adjusting items	(363.7)	(43.9)	n/a
Profit before tax	511.8	672.5	(23.9)
Profit after tax	291.9	425.2	(31.3)
Adjusted basic earnings per share	31.9p	24.6p	29.7
Basic earnings per share	14.6p	21.9p	(33.3)
Dividend per share	3.6p	3.0p	20.0
Net debt	(1,789.6)	(2,165.8)	n/a
Net funds excluding lease liabilities	437.8	45.7	n/a
Group capex and disposals	(458.6)	(423.2)	(8.4)
Free cash flow from operations	443.3	437.8	n/a
Adjusted return on capital employed	16.4%	14.1%	2.3 pts

 

Notes:

 

¹ Results of Republic of Ireland (ROI) have been reclassified from the International segment to be reported within Food and Fashion, Home & Beauty.

² Share of result in Ocado Retail Limited relates to the 57 weeks to 6^th of April 2025.

 

There are a number of non-GAAP measures and alternative profit measures ("APMs") discussed within this announcement, and a glossary and reconciliation to statutory measures is provided at the end of this report. Adjusted results are consistent with how business performance is measured internally and presented to aid comparability of performance. Refer to the adjusting items table below for further details.

 

 

Group results

Group sales were £13,914.3m. This was an increase of 6.1% versus 2023/24, driven by Food sales up 8.7% and Fashion, Home & Beauty sales up 3.5%. Statutory revenue in the period was £13,816.8m, an increase of 6.0% versus 2023/24.

The Group generated profit before tax and adjusting items of £875.5m compared with £716.4m in the prior year. The results of Republic of Ireland (ROI) have been reclassified from the International segment to be reported within Food and Fashion, Home & Beauty and the prior year restated.

Adjusting items were a net charge of £363.7m, compared with £43.9m in the prior year. The net charge in the period primarily consists of an impairment charge of £248.5m recognised in relation to the value of the investment in Ocado Retail, costs relating to the UK store rotation plans, and the M&S Financial Services transformation, partially offset by a credit relating to a legal settlement.

As a result, the Group generated a statutory profit before tax of £511.8m, compared with £672.5m in the prior year.

Adjusted basic EPS was 31.9p, up 29.7% on 2023/24 reflecting higher adjusted profit in the period. Basic EPS was 14.6p, down 33.3% on 2023/24, reflecting reduced profit in the period.

A final dividend of 2.6p per share has been declared, payable on 4 July 2025.

For full details the Group's related policy and adjusting items, read more in notes 1 and 3 to the financial information.

 

Food - UK and ROI

 

Food sales increased 8.7%, with like-for-like sales up 8.6%, driven by volume growth in core categories, continued quality upgrades, and weekly innovation. Sales growth in Q1 and Q4 was adversely impacted by the absence of Easter during 2024/25.

 

Change vs 23/24 %		Q1	Q2	Q3	Q4	FY
Food		5.6	10.6	8.7	10.0	8.7
Food like-for-like sales		4.7	10.3	8.9	10.6	8.6

 

M&S Food has an online grocery presence with Ocado Retail. Ocado Retail's sales to customers are reported by Ocado Group and are not included within these numbers.

 

 

52 weeks ended	29 Mar 25	30 Mar 24	Change vs 2023/24 %
UK Transactions, m (average/week)	10.5	9.7	8.2
UK Basket value inc VAT (£)	16.2	15.9	1.9

 

Sales growth was driven by volume growth as the number of transactions and frequency of shops increased. UK basket value was up, with the number of larger basket shops up 13%.

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 %
Sales	9,021.0	8,298.8	8.7
Operating profit before adjusting items	484.1	388.4	24.6
Adjusted operating margin	5.4%	4.7%	69 bps

 

Operating profit before adjusting items was £484.1m compared with £388.4m in 2023/24, with an adjusted operating margin of 5.4% versus 4.7% last year.

 

Gross margin decreased 0.1% pts as investment in value and quality was largely offset by cost reductions from sourcing programmes.

Operating costs increased 5.4%, which was lower than sales growth of 8.7%, resulting in operational cost leverage of 0.8% pts.

 

Operating cost increases in the year related to:

 

·      Retail investment in colleague pay and in store services, partly offset by structural cost savings

·      Supply chain investment in colleague pay and costs associated to additional volumes offset by structural cost savings and efficiencies

·      Increased investment in core infrastructure in digital and technology

·      Central costs were broadly level on the year

 

 

Operating profit margin before adjusting items	%
2023/24	4.7
Gross margin	(0.1)
Retail costs	0.5
Logistics	-
Digital & Technology	(0.1)
Central costs	0.4
2024/25	5.4

Fashion, Home & Beauty - UK and ROI

UK and ROI Fashion, Home & Beauty sales increased 3.5%, with like for like sales up 4.4%. Strong Q2 and Q4 sales were driven by seasonal campaign performance, supported by investment in improved customer experience online.

 

 

Change vs 23/24 %	Q1	Q2	Q3	Q4	FY
Fashion, Home & Beauty sales1	1.3	8.1	1.0	4.7	3.5
Fashion, Home & Beauty like-for-like sales	1.4	9.3	1.9	5.9	4.4
Fashion, Home & Beauty online sales	5.8	16.5	6.1	7.3	8.8
Fashion, Home & Beauty store sales	(0.7)	4.2	(1.5)	3.4	1.0
Fashion, Home & Beauty statutory revenue	953.7	1,029.8	1,274.8	879.5	4,137.8

¹ 'Sales' are statutory revenue plus the gross value of consignment sales ex. VAT

To enable greater insight into these movements, further detail is provided on the performance of each channel in the UK.

 

Online

 

52 weeks ended	29 Mar 25	30 Mar 24	Change vs 2023/24 %
Active customers (m)1	10.2	9.4	8.5
Frequency2	3.8	3.5	8.6
Transactions (m)	38.5	33.2	16.0
Average Basket value (£)3	60.7	60.9	(0.3)
Returns Rate (%)4	33.8	31.3	2.5% pts

¹ Active customers is the count of unique customers who transacted online in the last 52 weeks.

² Frequency is the count of purchasing transactions divided by customers.

³ Prior year average basket value has been restated to reflect alternative source data as a result of cookie compliance tracking

⁴ Returns rate represents returns on dispatch sales.

 

Online sales were driven by customer growth and increased frequency as we invested in upgrading the website experience and increased brand and social marketing. This was partly offset by increased returns reflecting continued growth in trend-led products and partner brands.

 

Stores

 

52 weeks ended	29 Mar 25	30 Mar 24	Change vs 2023/24 %
Transactions, m (average/week)	1.8	1.8	-
Average basket value inc. VAT pre returns (£)	39.5	39.2	0.8

 

Fashion, Home & Beauty store sales increased in a declining market, with good growth in retail parks and shopping centres, supported by three new stores opened in 2024/25: Dundee, Washington Galleries and Battersea.

 

Total Fashion, Home & Beauty

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 %
Sales	4,235.3	4,091.4	3.5
Operating profit before adjusting items	475.3	437.5	8.6
Adjusted operating margin	11.2%	10.7%	53 bps

 

Operating profit before adjusting items was £475.3m compared with £437.5m in 2023/24, with an adjusted operating margin of 11.2% compared with 10.7% last year.

 

Gross margin increased 1.2% pts, driven by better buying and currency-related gains, which more than offset supplier labour cost headwinds.

 

Operating costs increased 5.1%, which was higher than sales growth of 3.5%, resulting in operating cost deleverage of 0.7% pts.

 

Operating cost increases in the year related to:

 

·      Logistics costs associated with growth in online orders

·      Investment in core infrastructure in digital and technology

·      Increased central costs in marketing, website improvements and transformation

 

Conversely, retail costs decreased in the year as investment in colleague pay was offset by cost savings.

Operating profit margin before adjusting items	%
2023/24	10.7
Gross margin	1.2
Retail costs	0.8
Logistics	(0.2)
Digital & Technology	(0.6)
Central costs	(0.7)
2024/25	11.2

 

Within these results, store margin increased 1.3% pts to 13.1% while online margin declined 0.8% pts to 7.5%, reflecting the investment in online and customer experience.

International

 

International sales decreased by 8.5% (7.1% at constant currency). This was driven by lower Fashion, Home & Beauty shipments following actions taken to reduce stock levels by franchise partners and ongoing challenging trading conditions in owned stores in India.

Adjusted operating profit declined due to the reduction in sales, partially offset by improved cost control in owned markets in H2.

 

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 %	Change vs 2023/24 CC %
International
Sales	658.0	719.1	(8.5)	(7.1)
Operating profit before adjusting items	46.3	47.8	(3.1)	(2.0)
Adjusted operating margin	7.0%	6.6%	39 bps	37 bps

 

Ocado Retail Limited

The Group holds a 50% interest in Ocado Retail Limited ("Ocado Retail"). The remaining 50% interest is held by Ocado Group Plc ("Ocado Group"). Results for Ocado Retail are currently reported by Ocado Group and are not consolidated in this release.

From 2025/26 Ocado Retail Limited will be consolidated in the results of M&S in accordance with the joint venture agreement and align with the year-end accounting period of M&S. These results therefore relate to the 57 weeks to 6 April 2025 and include an M&S Group share of adjusted loss of £28.7m.

There will be no change in the economic interest of both shareholders in Ocado Retail Limited, or any consideration paid by the Group, as a result of the change.

Revenue increased by £621.6m in the 57 weeks to 6 April 2025. This was driven by active customer growth and higher frequency, whilst average selling price remained broadly level.

	57 weeks ended 6 Apr 25 £m	53 weeks ended 3 Mar 24 £m	Change vs 2023/24 £m
Revenue	3,091.9	2,470.3	621.6
Adjusted EBITDA	62.0	26.8	35.2
Adjusting items1	(20.8)	(61.1)	40.3
Depreciation and amortisation	(65.6)	(61.2)	(4.4)
Operating loss	(24.4)	(95.5)	71.1
Net interest charge	(37.0)	(30.3)	(6.7)
Taxation	-	(7.9)	7.9
Loss after tax	(61.4)	(133.7)	72.3
M&S 50% share of loss after tax	(30.7)	(67.0)	36.3
Reported in M&S Group adjusted profit before tax	(28.7)	(37.3)	8.6
Reported in M&S Group adjusting items	(2.0)	(29.7)	27.7

 

¹Adjusting items are defined within the Ocado Group Plc Annual Report and Accounts 2024.

 

Adjusted EBITDA increase was driven by revenue growth ahead of operational costs, partly offset by lower gross margin.

Adjusting items primarily relate to Ocado Retail's transition to the OSP platform. There is a £4.0m charge relating to the ceasing of operations at Hatfield which is reported as an adjusting item in M&S Group's share of Ocado Retail results.

Net interest charge increased, partly reflecting a higher interest expense on loans from shareholders, of which the M&S share is reported in the Group's finance income (£8.5m in 2024/25, £6.0m in 2023/24).

Last year there was a tax charge of £7.9m, driven by the write-off of a deferred tax asset.

Overall Ocado Retail reported a loss after tax of £61.4m. M&S group share was a loss of £30.7m, which is reported in M&S Group profit before tax.

 

M&S Financial Services

M&S Financial Services generated a profit before adjusting items of £7.0m (H1: £8.2m), this full year performance compares with £2.2m in 2023/24. Profit reduced in the second half reflecting the one-off costs as we transfer our Travel Money business from HSBC to Eurochange.

Details of the M&S Bank transformation and insurance mis-selling provisions can be found in adjusting items.

Net finance cost

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 £m
Interest payable	(45.9)	(53.3)	7.4
Interest income	54.9	52.3	2.6
Net interest receivable/(payable)	9.0	(1.0)	10.0
Unwind of discount on Scottish Limited Partnership liability	(1.4)	(4.1)	2.7
Unwind of discount on provisions	(6.4)	(6.6)	0.2
Net financial interest	1.2	(11.7)	12.9
Net interest payable on lease liabilities	(110.2)	(110.5)	0.3
Net finance cost before adjusting items	(109.0)	(122.2)	13.2
Adjusting items included in net finance cost	(3.5)	80.5	(84.0)
Net finance cost	(112.5)	(41.7)	(70.8)

 

Net finance cost before adjusting items decreased £13.2m to £109.0m. This was driven by reduced interest payable as a result of the repurchase of medium-term notes and increased interest income on cash and current financial assets.

 

Adjusting items within net finance costs decreased primarily due to last year's remeasurement of Ocado Retail Limited contingent consideration and reduced net pension finance income.

 

Group profit before tax and adjusting items

 

Group profit before tax and adjusting items was £875.5m, up 22.2% on 2023/24. The profit increase was primarily due to growth in the Food and Fashion, Home & Beauty businesses with reduced share of group losses in Ocado Retail.

Group profit before tax

Group profit before tax was £511.8m, down 23.9% on 2023/24. This includes a net charge for adjusting items of £363.7m (2023/24: charge of £43.9m).

 

Adjusting items

The Group makes certain adjustments to statutory profit measures in order to derive alternative performance measures (APMs) that provide stakeholders with additional helpful information and aid comparability of the performance of the business. For further detail on these (charges)/gains and the Group's policy for adjusting items, please see notes 1 and 3 to the financial information. These (charges)/gains are reported as adjusting items on the basis that they are significant in quantum in current or future years and aid comparability from one period to the next.

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 £m
Included in share of result of associate - Ocado Retail Limited	(14.9)	(42.6)	27.7
Amortisation and fair value adjustments arising as part of the investment in Ocado Retail Limited	(12.9)	(12.9)	-
Ocado Retail Limited - UK network capacity review	(2.0)	(29.7)	27.7
Included in operating profit	(345.3)	(81.8)	(263.5)
Strategic programmes - Store estate	(84.4)	(93.0)	8.6
Strategic programmes - International reset	(20.6)	-	(20.6)
Strategic programmes - Digital & Technology transformation	(10.2)	-	(10.2)
Strategic programmes - Organisation	-	(3.5)	3.5
Strategic programmes - UK Logistics	-	5.3	(5.3)
Strategic programmes - Furniture simplification	11.1	(18.3)	29.4
Store impairments, impairment reversals and other property charges	2.3	35.1	(32.8)
Impairment of investment in Ocado Retail Limited	(248.5)	-	(248.5)
M&S Bank transformation and insurance mis-selling provisions	(15.5)	(7.0)	(8.5)
Acquisition of Gist Limited	-	(0.4)	0.4
Legal Settlement	20.5	-	20.5
Included in net finance income/(costs)	(3.5)	80.5	(84.0)
Pension net finance income	4.1	24.0	(19.9)
Remeasurement of Ocado Retail Limited contingent consideration	-	64.7	(64.7)
Net finance costs incurred in relation to Gist Limited deferred and contingent consideration	(7.6)	(8.2)	0.6
Adjustments to profit before tax	(363.7)	(43.9)	(319.8)

 

 

Adjusting items recognised were a net charge of £363.7m. These include:

 

A non-cash charge of £12.9m with respect to the amortisation of intangible assets acquired on the purchase of our share in Ocado Retail.

 

A charge of £2.0m included within the share of result in associate. This reflects the group share of costs relating to the ceasing of operations at Ocado Retail's Hatfield CFC and wider network review.

 

A charge of £84.4m in relation to store estate rotation plans. This reflects the revised view of store exit routes, assumptions, estimated closure costs, charges relating to the impairment of buildings, fixtures and fittings, and accelerated depreciation.

 

A charge of £20.6m in relation to one-off charges related to contractual obligations due to the closure of European distribution centres, and the write off of certain assets no longer required.

 

As part of the strategic programme to reset our Digital & Technology operating model, a charge of £10.2m was incurred during the period, primarily relating to consultancy costs and related structural changes.

 

A net credit of £11.1m has been recognised associated with the exit of the two-person furniture delivery operation. The credit mainly reflects the settlement of the contractual obligations with suppliers and the profit on disposal of a distribution centre.

 

A non-cash net credit of £2.3m in relation to store impairment reversals, driven by revised future cash flow projections in relation to the carrying value of stores.

 

Ahead of the expected consolidation of Ocado Retail Limited in 2025/26, and in accordance with the relevant accounting standards, the Group performed a valuation exercise of Ocado Retail in the second half of the year, which triggered a full impairment test of the Group's existing investment. This resulted in an impairment charge of £248.5m, which has been recognised in relation to the value of the investment.

 

A charge of £15.5m in relation to M&S Bank transformation and insurance mis-selling provisions, predominately relating to the settlement of the deficit which had been recognised by M&S Bank. Total programme costs to date are £20.5m and under the terms of the new agreement, material charges are expected over the next six years.

 

The Group received a net credit of £20.5m as part of a legal settlement in relation to damages received from an independent third party following its involvement in anti-competitive behaviour that adversely impacted the Group.

 

For further details on adjusting items see note 3 to the financial information.

 

Taxation

The effective tax rate on profit before tax and adjusting items was 26.7% (2023/24: 33.2%). This was higher than the UK statutory tax rate, primarily due to the impact of non-deductible Ocado JV Losses.

 

The effective tax rate on statutory profit before tax was 43.0% (2023/24: 36.8%). This is higher than the effective tax rate on profit before adjusting items due to the impact of non-taxable adjusting items such as impairments.

 

Earnings per share

 

Basic earnings per share was 14.6p (2023/24: 21.9p), due to lower profit in the year and an increase in the effective tax rate. Adjusted basic earnings per share was 31.9p (2023/24: 24.6p) due to higher adjusted profit and a reduced effective tax rate on profit before adjusting items.

 

The weighted average number of ordinary shares in issue during the period was 2,021.9m (2023/24: 1,973.2m), with the weighted average number of diluted ordinary shares 2,110.7m (2023/24: 2,075.9m).

 

Cash flow

	29 Mar 25   £m	30 Mar 24 Restated £m1	Change vs 2023/24 £m
Operating profit	624.3	714.2	(89.9)
Adjusting items within operating profit	360.2	124.4	235.8
Operating profit before adjusting items	984.5	838.6	145.9
Depreciation, amortisation, impairments and disposals	542.6	526.3	16.3
Cash lease payments	(343.0)	(321.4)	(21.6)
Working capital	(38.6)	77.2	(115.8)
Non-cash pension expense	5.6	5.3	0.3
Defined benefit scheme pension funding	(0.4)	(0.4)	-
Capex and disposals	(458.6)	(423.2)	(35.4)
Financial interest	(2.6)	(31.2)	28.6
Taxation	(208.3)	(191.2)	(17.1)
Employee-related share transactions	(13.1)	22.2	(35.3)
Share of result from Associate	28.7	37.3	(8.6)
Loans to Associates	-	(62.0)	62.0
Share of results in other joint ventures	(0.5)	0.3	(0.8)
Adjusting items in cash flow	(53.0)	(40.0)	(13.0)
Free cash flow from operations	443.3	437.8	5.5
Lease Surrender Payments	(19.0)	(24.1)	5.1
Transactions with non-controlling interest	(2.6)	-	(2.6)
Acquisitions, investments, and divestments	(11.9)	(2.6)	(9.3)
Free cash flow	409.8	411.1	(1.3)
Dividends paid	(60.5)	(19.6)	(40.9)
Free cash flow after shareholder returns	349.3	391.5	(42.2)
Opening net funds excluding lease liabilities	45.7	(355.6)	401.3
Free cash flow after shareholder returns	349.3	391.5	(42.2)
Exchange and other non-cash movements excluding leases	42.8	9.8	33.0
Closing net funds excluding lease liabilities	437.8	45.7	392.1
Opening net debt	(2,165.8)	(2,637.2)	471.4
Free cash flow after shareholder returns	349.3	391.5	(42.2)
Decrease in lease obligations	258.6	243.5	15.1
New lease commitments and remeasurements	(261.0)	(176.0)	(85.0)
Exchange and other non-cash movements	29.3	12.4	16.9
Closing net debt	(1,789.6)	(2,165.8)	376.2

¹Lease Surrender Payments have been reclassified in 2024/25 as an adjustment to Free Cash Flow.

 

The business generated free cash flow from operations of £443.3m, a year-on-year increase of £5.5m.

 

Growth in operating profit before adjusting items was offset by a planned working capital outflow and increased capex net of disposals.

 

The working capital outflow was partly driven by a change of payment terms in Fashion, Home & Beauty from 90 to 75 days at the end of the prior year. Increased Food inventory was offset by growth in payables, partly due to Easter timing.

 

The reduction in financial interest paid was driven by the repurchase of medium-term notes. Taxation increased due to higher profit before adjusting items in the year. Loans to associates reflect reduced funding requirements for Ocado Retail Limited.

 

Adjusting items in cashflow include a £25.0m fee relating to a change in arrangements between M&S and HSBC UK for financial services, £20.6m relates to the store estate strategy, £6.4m relates to Furniture simplification, and £4.9m relates to Fashion, Home & Beauty network improvements. These were partly offset by £22.0m received relating to a legal settlement.

 

Dividends paid reflect the final dividend paid for 2023/24 and the interim dividend for 2024/25.

 

The Group generated free cashflow after shareholder returns, resulting in a further increase in net funds excluding lease liabilities and a reduction in net debt.

 

Movement in Exchange and other non-cash movements excluding leases relates to the change in recognition of the Scottish Limited Partnership liability.

 

Capital expenditure

 

52 weeks ended	29 Mar 25   £m	30 Mar 24 Restated £m1	Change vs 2023/24 £m
Store renewal	118.8	51.5	67.3
New stores	125.8	77.4	48.4
Property maintenance	114.0	99.1	14.9
Supply chain	95.3	69.3	26.0
Digital & Technology	104.7	80.8	23.9
International	7.4	12.4	(5.0)
ROI	11.1	5.6	5.5
Financial services	1.1	-	1.1
Capital expenditure before property disposals	578.2	396.1	182.1
Property disposals	(48.3)	(6.1)	(42.2)
Capital expenditure	529.9	390.0	139.9
Movement in capital accruals and other items	(71.3)	33.2	(104.5)
Capex and disposals as per cash flow	458.6	423.2	35.4

 

¹International has been restated as no longer includes ROI

 

Group capital expenditure before property disposals increased £182.1m to £578.2m due to increased investment in store renewal and new stores, supply chain and digital & technology.

 

Store renewal investment was driven by flagship renewals opened in the year at Cribbs Causeway, Gemini and Tamworth. Spend on new stores was driven by the opening of two Full Line stores at Dundee, Washington Galleries and the extension of Fosse Park which launched in October.

 

Supply chain expenditure reflects investment in expanding Fashion, Home & Beauty fulfilment capabilities, as well as replacement of vehicles and handling equipment.

 

Digital and technology includes technology replacement, network upgrades, and continued investment in website and app development.

 

 

Net debt

 

Group net debt decreased £376.2m since last year driven by the generation of free cash flow and the change in recognition of the Scottish Limited Partnership liability (see note 9 to the financial information).

 

The composition of Group net debt is as follows:

 

52 weeks ended	29 Mar 25 £m	30 Mar 24 £m	Change vs 2023/24 £m
Cash and cash equivalents1	864.5	1,022.4	(157.9)
Current financial assets and other1	290.4	26.9	263.5
Medium Term Notes	(717.1)	(921.7)	204.6
Partnership liability	-	(81.9)	81.9
Net funds excluding lease liabilities	437.8	45.7	392.1
Lease liabilities	(2,227.4)	(2,211.5)	(15.9)
Group net debt	(1,789.6)	(2,165.8)	376.2

 

¹ Cash and cash equivalents represents cash held on deposit for under 90 days. Current financial assets includes funds on deposit for longer than 90 days.

 

The Medium Term Notes include four bonds, with maturities out to 2037, and the associated accrued interest. During the period part of 2025 and 2026 bonds were repurchased totalling £190.3m. The USD 300m 2037 bond is valued by reference to the embedded exchange rate in the associated cross currency swaps. The full breakdown of maturities is as follows:

Bond and maturity date	Value £m
Jun 2025, GBP	105.5
May 2026, GBP	109.4
Jul 2027, GBP	250.0
Dec 2037, USD	252.9
Unamortised bond costs and effects of fair value hedges	(1.7)
Total principal value	716.1
Interest and FX revaluation	1.0
Total carrying value	717.1

 

 

Lease Liabilities	29 Mar 25 £m	30 Mar 24 Restated £m1	Change vs 2023/24 £m	Average lease length to break2
Full Line stores	(841.7)	(860.1)	18.4	c. 16 years
Food stores	(701.4)	(682.2)	(19.2)	c. 10 years
Offices, warehouses, ROI and other	(518.5)	(514.9)	(3.6)
International	(165.8)	(154.3)	(11.5)
Total lease liability	(2,227.4)	(2,211.5)	(15.9)

¹ Restated owing to ROI moving out of international

² Liability-weighted average lease length to break

 

New lease commitments and remeasurements in the period were £261.0m, largely relating to UK lease additions including new stores and UK property liability remeasurements, which was more than offset by capital lease repayments.

Full Line store lease liabilities include £149.3m relating to stores identified as part of the store estate strategic programme. The average lease length on Full Line stores is skewed by nine particularly long leases. Excluding these nine leases, the average term to break of leases outside the programme is c.14 years. Food store lease liabilities include £49.5m relating to stores identified as part of the store estate strategic programme.

Pension

 

At 29 March 2025, the IAS 19 net retirement benefit deficit was £122.7m (2023/24: £77.2m surplus). There has been a decrease of £199.9m since prior year largely driven by changes to member mortality experience and the change in recognition of the Scottish Limited Partnership.

The most recent actuarial valuation of the UK DB Pension Scheme was carried out as at 31 March 2024 and showed a funding surplus of £288m. This is a reduction compared to the previous position at 31 March 2021 (funding surplus of £687m), primarily due to net investment experience.

The IAS 19 net retirement deficit differs from the actuarial valuation primarily due to the difference in discount rate applied.

The Company and Trustee have confirmed, in line with the current funding arrangement, that no further contributions will be required to fund past service because of this valuation, other than those contractually committed under the Marks and Spencer Scottish Limited Partnership arrangements.

Marks and Spencer Scottish Limited Partnership

Marks and Spencer Plc is a general partner of the Marks and Spencer Scottish Limited Partnership, with the UK DB Pension Scheme, which is a limited partner.

The Partnership holds £1.3bn (2023/24: £1.3bn) of properties at book value which have been leased back to Marks and Spencer Plc.

In February 2025 the Group and the UK DB Pension Scheme Trustee agreed to a change to the Partners' entitlements to distributions from the Partnership. The first limited partnership interest and second limited partnership interest were replaced by a third limited partnership interest.

The new third partnership interest (also held by the UK DB Pension Scheme), entitles the Pension Scheme to receive £45.0m in June 2025 and June 2026, and £55.0m in June 2027 and June 2028. From June 2029 to June 2035 the Pension Scheme is entitled to receive either £55.0m or £nil, depending on the funding level of the Pension Scheme as at the latest reporting date. Under certain circumstances these amounts may be retained in the Partnership, with the distribution determined by the future funding position of the pension scheme.

Liquidity

At 29 March 2025, the Group had liquidity of £1,739.5m (last year: £1,897.4m), comprising cash and cash equivalents of £864.5m, an undrawn committed syndicated bank revolving credit facility ("RCF") of £850.0m (set to mature in June 2027), and undrawn uncommitted facilities amounting to £25.0m.

The Group continues to maintain a robust balance sheet providing it with sufficient access to liquidity, through a combination of cash and committed facilities, to meet its needs in the short and medium-term.

Dividend

With the Group generating a further improvement in operating performance, balance sheet and credit metrics, a final dividend of 2.6p per share has been declared. This will be payable on 4 July 2025 to shareholders on the register of members as at close of business on 30 May 2025.

Statement of financial position

Net assets were £2,951.4m at the period end. The profit made in the period and the reduction in borrowings resulted in an overall increase in net assets of 4.3% since prior year.

 

Consolidated income statement
					52 weeks ended				52 weeks ended
					29 March 2025				30 March 2024
					Total				Total
		Notes			£m				£m
Revenue		2			13,816.8				13,040.1
Share of result in associate - Ocado Retail Limited		17			(43.6)				(79.9)
Operating profit		3			624.3				714.2
Finance income		3, 4			64.7				146.7
Finance costs		3, 4			(177.2)				(188.4)
Profit before tax		2, 3			511.8				672.5
Income tax expense		5			(219.9)				(247.3)
Profit for the year					291.9				425.2
Attributable to:
Owners of the parent					295.7				431.2
Non-controlling interests					(3.8)				(6.0)
					291.9				425.2
Earnings per share
Basic earnings per share		6			14.6p				21.9p
Diluted earnings per share		6			14.0p				20.8p
Reconciliation of profit before tax and adjusting items:
Profit before tax					511.8				672.5
Adjusting items		3			363.7				43.9
Profit before tax and adjusting items - non-GAAP measure					875.5				716.4
Adjusted earnings per share - non-GAAP measure
Adjusted basic earnings per share		6			31.9p				24.6p
Adjusted diluted earnings per share		6			30.6p				23.3p