REG - Marks and Spencer Gp - Final Results
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RNS Number : 4982J Marks and Spencer Group PLC 21 May 2025
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%
Sales(1) £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
(1)References 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
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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:
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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 30 Mar 24 Change vs 23/24 %
£m Restated £m(1)
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 Limited(2) (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 30 Mar 24 Change vs 2023/24 %
£m £m
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 sales(1) 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
Frequency(2) 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 30 Mar 24 Change vs 2023/24 %
£m £m
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 30 Mar 24 Change vs 2023/24 % Change vs
£m £m 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 53 weeks ended Change vs 2023/24
6 Apr 25 3 Mar 24 £m
£m £m
Revenue 3,091.9 2,470.3 621.6
Adjusted EBITDA 62.0 26.8 35.2
Adjusting items(1) (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
( )
(1)Adjusting 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 30 Mar 24 Change vs 2023/24 £m
£m £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 30 Mar 24 Change vs 2023/24 £m
£m £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 (12.9) (12.9) -
Ocado Retail Limited
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 (7.6) (8.2) 0.6
consideration
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 30 Mar 24 Change vs 2023/24
Restated £m
£m £m(1)
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
(1)Lease 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 30 Mar 24 Change vs 2023/24
Restated £m
£m £m(1)
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
( )
(1)International 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 30 Mar 24 Change vs 2023/24
£m £m £m
Cash and cash equivalents(1) 864.5 1,022.4 (157.9)
Current financial assets and other(1) 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 30 Mar 24 Change vs Average lease length
£m Restated 2023/24 to break(2)
£m(1) £m
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
Consolidated statement of comprehensive income
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Notes £m £m
Profit for the year 291.9 425.2
Other comprehensive income/ (expense):
Items that will not be reclassified subsequently to profit or loss
Remeasurements of retirement benefit schemes 8 (149.2) (419.2)
Tax on retirement benefit schemes 49.7 104.8
(99.5) (314.4)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences
- movements recognised in other comprehensive income (8.3) (11.5)
Cash flow hedges
- fair value movements recognised in other comprehensive income (19.2) (27.5)
- reclassified and reported in profit or loss 5.7 5.3
Tax credit on cash flow hedges 2.7 6.1
(19.1) (27.6)
Other comprehensive expense for the year, net of tax (118.6) (342.0)
Total comprehensive income for the year 173.3 83.2
Attributable to:
Owners of the parent 177.1 89.2
Non-controlling interests (3.8) (6.0)
173.3 83.2
Consolidated statement of financial position
As at As at
29 March 2025 30 March 2024
Notes £m £m
Assets
Non-current assets
Intangible assets 10 187.4 179.5
Property, plant and equipment 11 5,408.5 5,190.1
Investment property 11.2 11.6
Investments in joint ventures and associates 17 392.5 684.2
Other financial assets 21.3 12.6
Retirement benefit assets 8 - 81.8
Trade and other receivables 382.8 356.7
Derivative financial instruments 0.1 0.7
Deferred tax assets 13.9 11.7
6,417.7 6,528.9
Current assets
Inventories 843.9 776.9
Other financial assets 289.5 12.3
Trade and other receivables 327.5 302.0
Derivative financial instruments 7.2 6.8
Current tax assets 71.1 32.9
Cash and cash equivalents 864.5 1,022.4
2,403.7 2,153.3
Total assets 8,821.4 8,682.2
Liabilities
Current liabilities
Trade and other payables 2,370.3 2,107.9
Partnership liability to the Marks & Spencer UK Pension Scheme 9 - 88.8
Borrowings and other financial liabilities 355.8 250.4
Derivative financial instruments 25.1 20.0
Provisions 25.1 47.6
Current tax liabilities 1.2 1.5
2,777.5 2,516.2
Non-current liabilities
Retirement benefit deficit 8 122.7 4.6
Trade and other payables 18.9 116.7
Borrowings and other financial liabilities 2,588.7 2,882.8
Derivative financial instruments 16.6 21.9
Provisions 146.2 104.1
Deferred tax liabilities 199.4 205.8
3,092.5 3,335.9
Total liabilities 5,870.0 5,852.1
Net assets 2,951.4 2,830.1
Equity
Issued share capital 20.6 20.5
Share premium account 982.7 967.0
Capital redemption reserve 2,680.4 2,680.4
Hedging reserve (7.5) (8.4)
Cost of hedging reserve 7.0 5.4
Other reserve (6,542.2) (6,542.2)
Foreign exchange reserve (89.4) (81.1)
Retained earnings 5,888.5 5,789.6
Equity attributable to owners of the parent 2,940.1 2,831.2
Non-controlling interests 11.3 (1.1)
Total equity 2,951.4 2,830.1
Consolidated statement of changes in equity
Ordinary share capital Share premium account Capital redemption reserve Hedging reserve Cost of hedging Other reserve¹ Foreign exchange reserve Retained earnings Total Non-controlling Total
interest
£m £m £m £m £m £m £m £m £m £m £m
As at 2 April 2023 19.8 910.7 2,680.4 (31.9) 4.2 (6,542.2) (69.6) 5,705.0 2,676.4 4.4 2,680.8
Profit for the year - - - - - - - 431.2 431.2 (6.0) 425.2
Other comprehensive (expense)/income:
Foreign currency translation
- movements recognised in other comprehensive income - - - - - - (11.5) - (11.5) - (11.5)
Remeasurements of retirement benefit schemes - - - - - - - (419.2) (419.2) - (419.2)
Tax on retirement benefit schemes - - - - - - - 104.8 104.8 - 104.8
Cash flow hedges
- fair value movement in other comprehensive income - - - (29.1) 1.6 - - - (27.5) - (27.5)
- reclassified and reported in profit or loss - - - 5.3 - - - - 5.3 - 5.3
Tax on cash flow hedges - - - 6.5 (0.4) - - - 6.1 - 6.1
Other comprehensive (expense)/income: - - - (17.3) 1.2 - (11.5) (314.4) (342.0) - (342.0)
Total comprehensive (expense)/income - - - (17.3) 1.2 - (11.5) 116.8 89.2 (6.0) 83.2
Cash flow hedges recognised in inventories - - - 54.4 - - - - 54.4 - 54.4
Tax on cash flow hedges recognised in inventories - - - (13.6) - - - - (13.6) - (13.6)
Transactions with owners:
Dividends - - - - - - - (19.6) (19.6) - (19.6)
Transactions with non-controlling shareholders - - - - - - - - - 0.5 0.5
Shares issued in respect of employee share options 0.7 56.3 - - - - - - 57.0 - 57.0
Purchase of shares held by employee trusts - - - - - - - (83.1) (83.1) - (83.1)
Credit for share-based payments - - - - - - - 48.3 48.3 - 48.3
Deferred tax on share schemes - - - - - - - 22.2 22.2 - 22.2
As at 30 March 2024 20.5 967.0 2,680.4 (8.4) 5.4 (6,542.2) (81.1) 5,789.6 2,831.2 (1.1) 2,830.1
As at 31 March 2024 20.5 967.0 2,680.4 (8.4) 5.4 (6,542.2) (81.1) 5,789.6 2,831.2 (1.1) 2,830.1
Profit for the year - - - - - - - 295.7 295.7 (3.8) 291.9
Other comprehensive (expense)/income:
Foreign currency translation
- movements recognised in other comprehensive income - - - - - - (8.3) - (8.3) - (8.3)
Remeasurements of retirement benefit schemes - - - - - - - (149.2) (149.2) - (149.2)
Tax on retirement benefit schemes - - - - - - - 49.7 49.7 - 49.7
Cash flow hedges
- fair value movement in other comprehensive income - - - (21.4) 2.2 - - - (19.2) - (19.2)
- reclassified and reported in profit or loss - - - 5.7 - - - - 5.7 - 5.7
Tax on cash flow hedges - - - 3.3 (0.6) - - - 2.7 - 2.7
Other comprehensive (expense)/income - - - (12.4) 1.6 - (8.3) (99.5) (118.6) - (118.6)
Total comprehensive (expense)/income - - - (12.4) 1.6 - (8.3) 196.2 177.1 (3.8) 173.3
Cash flow hedges recognised in inventories - - - 17.7 - - - - 17.7 - 17.7
Tax on cash flow hedges recognised in inventories - - - (4.4) - - - - (4.4) - (4.4)
Transactions with owners:
Dividends - - - - - - - (60.5) (60.5) - (60.5)
Transactions with non-controlling shareholders - - - - - - - (15.9) (15.9) 16.2 0.3
Shares issued in respect of employee share options 0.1 15.7 - - - - - - 15.8 - 15.8
Purchase of shares held by employee trusts - - - - - - - (81.3) (81.3) - (81.3)
Credit for share-based payments - - - - - - - 52.4 52.4 - 52.4
Tax on share schemes - - - - - - - 8.0 8.0 - 8.0
As at 29 March 2025 20.6 982.7 2,680.4 (7.5) 7.0 (6,542.2) (89.4) 5,888.5 2,940.1 11.3 2,951.4
(1) The "Other reserve" was originally created as part of the capital
restructuring that took place in 2002. It represents the difference between
the nominal value of the shares issued prior to the capital reduction by the
Company (being the carrying value of the investment in Marks and Spencer plc)
and the share capital, share premium and capital redemption reserve of Marks
and Spencer plc at the date of the transaction.
Consolidated statement of cash flows
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Notes £m £m
Cash flows from operating activities
Cash generated from operations 14 1,521.3 1,492.9
Income tax paid (208.3) (191.2)
Net cash inflow from operating activities 1,313.0 1,301.7
Cash flows from investing activities
Proceeds on property disposals 48.3 6.1
Purchase of property, plant and equipment (408.4) (359.5)
Purchase of intangible assets (98.5) (69.8)
(Purchase)/sale of current financial assets (277.2) 0.7
Purchase of non-current financial assets (12.5) (2.6)
Proceeds on disposal of non-current financial assets 0.6 -
Loans to related parties 16 - (62.0)
Interest received 51.6 51.8
Net cash used in investing activities (696.1) (435.3)
Cash flows from financing activities
Interest paid(1) (158.1) (185.0)
Redemption of Medium Term Notes(2) (187.8) (395.6)
Repayment of lease liabilities (258.6) (243.5)
Payment of partnership liability to the Marks & Spencer UK Pension Scheme 9 (40.5) (40.0)
Equity dividends paid (60.5) (19.6)
Shares issued on exercise of employee share options 15.8 57.0
Transactions with non-controlling interest (2.6) -
Purchase of own shares by employee trust (81.3) (83.1)
Net cash used in financing activities (773.6) (909.8)
Net cash outflow from activities (156.7) (43.4)
Effects of exchange rate changes (1.2) (2.1)
Opening net cash 1,022.4 1,067.9
Closing net cash 15 864.5 1,022.4
(1)Includes interest paid on lease liabilities of £103.4m (last year:
£102.0m).
(2)Includes £190.3m of outstanding 2025 and 2026 notes repurchased in June
2024, resulting in a gain of £2.9m recognised within 'interest payable on
Medium Term Notes' in net finance costs.
1 Accounting policies
General information
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 29 March 2025 or 30 March
2024. The financial information for the year ended 30 March 2024 is derived
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditors reported on those accounts: their report
was unqualified, did not draw attention to any matters by way of emphasis and
did not contain a statement under s498(2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 29 March 2025 will be delivered to
the Registrar of Companies following the Company's annual general meeting.
Basis of preparation
While the financial information included in this press release has been
prepared in accordance with the recognition and measurement criteria of
UK-adopted International Accounting Standards, this announcement does not
itself contain sufficient information to comply with these standards. The
financial information has been prepared using accounting policies and methods
of computation consistent with those applied in the financial statements for
the year ended 30 March 2024, with the exception of the change in accounting
policy and new accounting standards adopted in the year set out below. The
Company's full financial statements will be prepared in compliance with
UK-adopted International Accounting Standards.
Going concern basis
The financial statements have been prepared on a going concern basis. In
adopting the going concern basis, the Board has considered the business
activities, the financial position of the Group, its cash flows, liquidity
position and borrowing facilities, the Group's financial risk management
objectives and exposures to liquidity and other financial risks as set out in
note 12 and the principal risks and uncertainties.
The Group continues to maintain a robust financial position 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. 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 RCF contains a financial covenant, being the ratio of earnings before
interest, tax, depreciation and amortisation; to net interest and depreciation
on right-of-use assets under IFRS 16. The covenant is measured biannually.
In adopting the going concern basis of preparation, the Board has assessed the
Group's cash flow forecasts which incorporate a latest estimate of the ongoing
impact of current market conditions on the Group and include a number of
assumptions including sales growth and customer behaviour. While trading
continues to be strong, in forming its outlook on the future financial
performance, the Board considered a variety of downsides that the Group might
experience, such as a sustained economic recession and an inability for the
Group to execute the transformation plan.
Under these latest forecasts, the Group is able to operate without the need to
draw on its available facilities and without taking any supplementary
mitigating actions, such as reducing capital expenditure and other
discretionary spend. The forecast cash flows also indicate that the Group will
comply with all relevant banking covenants during the forecast period, being
at least 12 months from the approval of the financial statements.
The Board has modelled a severe, but plausible, downside scenario. This
downside scenario assumes that:
· There will be a period of economic recession in 2025/26,
resulting in a reduction in sales growth of 2.0 - 4.0% across all three
business units compared to the budget and three-year plan.
· A delay on transformation benefits results in incremental sales
expected from the transformation declining by 7.5%, 15% and 30% respectively
across the three-year period.
· Ocado Retail Limited experiences limited customer demand, with a
5.0% reduction in volume growth each year across the three-year period
compared to the budget and three-year plan.
Even under this severe but plausible downside scenario, the Group would
continue to have sufficient liquidity and headroom on its existing facilities
and against the RCF financial covenant for the forecast period. In addition,
should such a scenario arise, there are a range of mitigating actions that
could be taken to reduce the impact. Based on latest assessments of the
expected impact of the cyber incident on the business and modelling a
worst-case impact on trade and a delayed recovery and return to website sales,
the Board considers that there are sufficient mitigating actions that could be
adopted so that this downside scenario remains a plausible, but remote,
outcome for the Group.
In addition, reverse stress testing has been applied to the model to determine
the decline in sales that the Group could absorb before exhausting the Group's
total liquidity. Such a scenario, and the sequence of events which could lead
to it, is considered to be extremely remote.
As a result, the Board expects the Group to have adequate resources to
continue in operation, meet its liabilities as they fall due, retain
sufficient available cash and not breach the covenant under the revolving
credit facility for the foreseeable future, being a period of at least 12
months from the approval of the financial statements. The Board therefore
considers it appropriate for the Group to adopt the going concern basis in
preparing its financial statements.
New accounting standards adopted by the Group
The Group has applied the following new standards and interpretations for the
first time for the annual reporting period commencing 31 March 2024:
· Amendment to IFRS 16: Lease Liability in a Sale and Leaseback.
· Amendments to IAS 1: Classification of Liabilities as Current or
Non-Current.
· Amendments to IAS 1: Non-current Liabilities with Covenants.
· Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements.
The adoption of the standards and interpretations listed above has not led to
any changes to the Group's accounting policies or had any other material
impact on the financial position or performance of the Group.
New accounting standards in issue but not yet effective
New standards and interpretations that are in issue but not yet effective are
listed below:
· Amendments to IAS 21: Lack of Exchangeability.
· Amendments to IFRS 9 and IFRS 7: Classification and Measurement
of Financial Instruments.
· Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture.
· IFRS 18: Presentation and Disclosure in Financial Statements.
· IFRS 19: Subsidiaries without Public Accountability: Disclosures
With the exception of the adoption of IFRS 18, the adoption of the above
standards and interpretations is not expected to lead to any changes to the
Group's accounting policies nor have any other material impact on the
financial position or performance of the Group.
IFRS 18 was issued in April 2024 and is effective for periods beginning on or
after 1 January 2027. Early application is permitted and comparatives will
require restatement. The standard will replace IAS 1 Presentation of Financial
Statements and although it will not change how items are recognised and
measured, the standard brings a focus on the income statement and reporting of
financial performance. Specifically, it classifies income and expenses into
three new defined categories: operating, investing and financing and two new
subtotals: operating profit and loss and profit or loss before financing and
income tax, introduces disclosures of management defined performance measures
(MPMs) and enhances general requirements on aggregation and disaggregation.
The impact of the standard on the Group is currently being assessed and it is
not yet practicable to quantify the effect of IFRS 18 on these consolidated
financial statements, however there is no impact on presentation for the Group
in the current year given the effective date - this will be applicable for the
Group's 2027/28 Annual Report.
Alternative performance measures
In reporting financial information, the Group presents alternative performance
measures (APMs), which are not defined or specified under the requirements of
IFRS.
The Group believes that these APMs, which are not considered to be a
substitute for, or superior to, IFRS measures, provide stakeholders with
additional helpful information on the performance of the business. These APMs
are consistent with how the business performance is planned and reported
within the internal management reporting to the Board and Executive Committee.
Some of these measures are also used for the purpose of setting remuneration
targets.
The key APMs that the Group uses include: sales; like-for-like sales growth;
adjusted operating profit; adjusted operating margin; profit before tax and
adjusting items; adjusted basic earnings per share; net debt; net debt
excluding lease liabilities; free cash flow; free cash flow from operations;
capital expenditure; and return on capital employed. Each of these APMs, and
others used by the Group, is set out in the Glossary, including explanations
of how they are calculated and how they can be reconciled to a statutory
measure where relevant.
The Group reports some financial measures, primarily International sales, on
both a reported and constant currency basis. The constant currency basis,
which is an APM, retranslates the previous year revenues at the average actual
periodic exchange rates used in the current financial year. This measure is
presented as a means of eliminating the effects of exchange rate fluctuations
on the year-on-year reported results.
The Group makes certain adjustments to the statutory profit measures in order
to derive many of these APMs. The Group's policy is to exclude items that are
considered significant in nature and/or quantum over the total expected life
of the programme or are consistent with items that were treated as adjusting
in prior periods. The Group's definition of adjusting items is consistent with
prior periods. Adjusted results are consistent with how business performance
is measured internally and presented to aid comparability of performance. On
this basis, the following items were included within adjusting items for the
52-week period ended 29 March 2025:
· Net charges associated with the strategic programme in relation
to the review of the store estate.
· Significant restructuring costs and other associated costs
arising from strategy or operational changes that are not considered by the
Group to be part of the normal operating costs of the business.
· Impairment charges and provisions that are considered to be
significant in nature and/or value to the trading performance of the business.
· Charges and reversals of previous impairments arising from the
write-off of assets and other property charges that are significant in nature
and/or value. Impairment charges are recognised in adjusted operating profit
where they relate to stores not previously impaired or do not otherwise meet
the Group's adjusting items policy.
· Adjustments to income from M&S Bank due to a provision
recognised by M&S Bank for the cost of providing redress to customers in
respect of possible mis-selling of M&S Bank financial products.
· Amortisation of the identified intangible assets arising as part
of the investment in Ocado Retail Limited.
· Net finance costs incurred in relation to Gist Limited deferred
and contingent consideration.
· Share of net charges associated with Ocado Retail Limited's UK
network capacity review.
· Net pension finance income in relation to closed scheme not
considered part of ongoing operating activities of the Group.
· Significant charges relating to the renegotiation of the Group's
Relationship Agreement with M&S Bank.
· Significant charges in relation to the furniture simplification
programme that are not considered to be day-to-day operational costs of the
business, mainly relating to contractual obligations with suppliers.
· (New) Net income associated with a significant legal settlement
that is not considered to be a normal income stream of the business.
Refer to note 3 for a summary of the adjusting items.
2 Segmental Information
IFRS 8 Operating Segments requires operating segments to be identified on the
basis of internal reporting on components of the Group that are regularly
reviewed by the chief operating decision-maker to allocate resources to the
segments and to assess their performance.
The chief operating decision-maker has been identified as the Executive
Committee. The Executive Committee reviews the Group's internal reporting in
order to assess performance and allocate resources across each operating
segment.
The Group's reportable operating segments have therefore been identified as
follows:
• Fashion, Home & Beauty - comprises the retailing of womenswear,
menswear, lingerie, kidswear, beauty and home products through UK and ROI
retail stores and online.
• Food - includes the results of the UK and ROI retail food business, UK
Food franchise operations and UK supply chain services, with the following
main categories: Meat, Fish, Protein Deli and Dairy; Produce &
Horticulture; Meals, Frozen and 'food on the move'; Core Basket; Impulse &
Events; Beers, wines & spirits; Hospitality; and direct sales to Ocado
Retail Limited.
• International - consists of Marks and Spencer owned businesses in Europe
(excluding Ireland) and Asia and the international franchise operations.
• Ocado - includes the Group's share of profits or losses from the
investment in Ocado Retail Limited.
Other business activities and operating segments, including M&S Bank are
combined and presented in "All other segments". Finance income and costs are
not allocated to segments as each is managed on a centralised basis.
The Executive Committee assesses the performance of the operating segments
based on a measure of adjusted operating profit. This measurement basis
excludes the effects of adjusting items from the operating segments.
The following is an analysis of the Group's revenue and results by reportable
segment:
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
UK & ROI Fashion, Home & Beauty(4) UK & ROI Food International Ocado All other segments Group UK & ROI Fashion, Home & Beauty(3) UK & ROI Food(3) International(3) Ocado All other segments Group
£m £m £m £m £m £m £m £m £m £m £m £m
Sales(1) 4,235.3 9,021.0 658.0 - - 13,914.3 4,091.4 8,298.8 719.1 - - 13,109.3
Revenue 4,137.8 9,021.0 658.0 - - 13,816.8 4,022.2 8,298.8 719.1 - - 13,040.1
Adjusted operating profit/(loss)(2) 475.3 484.1 46.3 (28.7) 7.5 984.5 437.5 388.4 47.8 (37.3) 2.2 838.6
Finance income before adjusting items 60.6 58.0
Finance costs before adjusting items (169.6) (180.2)
Profit/(loss) before tax and adjusting items 475.3 484.1 46.3 (28.7) 7.5 875.5 437.5 388.4 47.8 (37.3) 2.2 716.4
Adjusting items (363.7) (43.9)
Profit/(loss) before tax 475.3 484.1 46.3 (28.7) 7.5 511.8 437.5 388.4 47.8 (37.3) 2.2 672.5
(1) Sales is revenue stated prior to adjustments for UK Fashion, Home &
Beauty brand consignment sales of £97.5m (last year: £69.2m). There are no
brand consignment sales in ROI.
(2) Adjusted operating profit/(loss) is stated as gross profit less operating
costs prior to adjusting items. At reportable segment level costs are
allocated where directly attributable or based on an appropriate cost driver
for the cost.
(3) The segments have been restated as the Group no longer includes the
Republic of Ireland within the International segment and instead includes the
Republic of Ireland within the Fashion, Home and Beauty and Food segments.
(4) The UK and ROI Clothing & Home segment has been renamed UK and ROI
Fashion, Home & Beauty during the year.
Other segmental information
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
UK & ROI Fashion, Home & Beauty4 UK & ROI Food International Ocado All other segments Group UK & ROI Fashion, Home & Beauty(3) UK & ROI Food(3) International(3) Ocado All other segments Group
£m £m £m £m £m £m £m £m £m £m £m £m
Additions to property, plant and equipment, and intangible assets (excluding 266.7 315.0 7.4 - - 589.1 196.3 203.8 13.3 - - 413.4
goodwill and right-of-use assets)
Depreciation and amortisation(1,2) (200.6) (240.9) (30.7) - - (472.2) (223.5) (241.6) (36.5) - - (501.6)
Impairment charges, impairment reversals and asset disposals(1) (106.3) (34.6) - - - (140.9) (43.4) (29.0) - - - (72.4)
(1) These costs are allocated to a reportable segment where they are directly
attributable. Where costs are not directly attributable, a proportional
allocation is made to each segment based on an appropriate cost driver.
(2) Includes £0.4m (last year: £0.2m) depreciation and impairments on
investment property.
(3) The segments have been restated as the Group no longer includes the
Republic of Ireland within the International segment and instead includes the
Republic of Ireland within the Fashion, Home & Beauty and Food segments.
Segment assets and liabilities, including investments in associates and joint
ventures, are not disclosed because they are not reported to or reviewed by
the Executive Committee.
3 Adjusting items
The total adjusting items reported for the 52-week period ended 29 March 2025
is a net charge of £363.7m (last year: net charge of £43.9m). The
adjustments made to reported profit before tax to arrive at adjusted profit
are:
2025 2024
Notes £m £m
Included in share of result of associate - Ocado Retail Limited
Amortisation and fair value adjustments arising as part of the investment in 17 (12.9) (12.9)
Ocado Retail Limited
Ocado Retail Limited - UK network capacity review 17 (2.0) (29.7)
(14.9) (42.6)
Included in operating profit
Strategic programmes - Store estate 11 (84.4) (93.0)
Strategic programmes - International reset (20.6) -
Strategic programmes - Digital and Technology transformation (10.2) -
Strategic programmes - Organisation - (3.5)
Strategic programmes - UK logistics 11 - 5.3
Strategic programmes - Furniture simplification 11.1 (18.3)
Store impairments, impairment reversals and other property charges 11 2.3 35.1
Impairment of investment in Ocado Retail Limited 17 (248.5) -
M&S Bank transformation and insurance mis-selling provisions (15.5) (7.0)
Acquisition of Gist Limited - (0.4)
Legal settlement 20.5 -
(345.3) (81.8)
Included in net finance income/(costs)
Pension net finance income 8 4.1 24.0
Remeasurement of Ocado Retail Limited contingent consideration - 64.7
Net finance costs incurred in relation to Gist Limited deferred and contingent (7.6) (8.2)
consideration
(3.5) 80.5
Adjustments to profit before tax (363.7) (43.9)
Amortisation and fair value adjustments arising as part of the investment in
Ocado Retail Limited (£12.9m)
Intangible assets of £366.0m were acquired as part of the investment in Ocado
Retail Limited in 2019/20 relating to the Ocado brand and acquired customer
relationships. These intangibles are being amortised over their useful
economic lives of 10 - 40 years with an amortisation charge of £17.2m (last
year: £17.2m) recognised in the period and a related deferred tax credit of
£4.3m (last year: £4.3m).
The amortisation charge and changes in the related deferred tax liability are
included within the Group's share of the profit or loss of the associate and
are considered to be adjusting items as they are based on judgments about
their value and economic life and are not related to the Group's underlying
trading performance. These charges are reported as adjusting items on the
basis that they are significant in quantum and to aid comparability from one
period to the next.
Ocado Retail Limited - UK network capacity review (£2.0m)
On 25 April 2023, Ocado Retail Limited announced the plan to cease operation
at its Customer Fulfilment Centre (CFC) in Hatfield as part of the wider
review of UK network capacity. During H2 2023/24, Ocado Retail Limited also
undertook a strategy and capacity review for the Zoom network.
As a result, Ocado Retail Limited has recorded impairment charges,
restructuring costs and other related costs of closure. In the period a charge
of £2.0m has been recognised (last year: £29.7m).
The Group's share of these costs, reported within the Group's 'share of result
of associate - Ocado Retail Limited', are considered to be adjusting items as
they are one-off in nature and significant in value to the results of the
Group and to the Ocado segment. No further charges are expected in this
programme.
Strategic programmes - Store estate (£84.4m)
In November 2016, the Group announced a strategic programme to transform and
rotate the store estate with the overall objective to improve our store estate
to better meet our customers' needs. The Group has incurred charges of
£1,047m in the nine years up to March 2025 under this programme primarily
relating to closure costs associated with stores identified as part of the
strategic transformation plans.
The Group has recognised a charge of £84.4m in the period in relation to
those stores identified as part of the rotation plans. The charge primarily
reflects the latest view of store closure plans and latest assumptions for
estimated store closure costs, as well as charges relating to the impairment
of buildings and fixtures and fittings, and depreciation as a result of
shortening the useful economic life of stores based on the most recent
approved exit routes.
Further charges relating to the closure and rotation of the store estate are
anticipated over the next six years as the programme progresses, the quantum
of which is subject to change throughout the programme period as the Group
gets greater certainty of circumstances that need to be in place to make
closure financially viable. Future charges will not include Foodhall closures
at a lease event where there is opportunity for a better location, as this is
not in the scope of the programme.
As at 29 March 2025, the total closure programme now consists of 220 stores,
139 of which have already closed. Further charges of c.£256m are estimated
within the next six financial years, bringing anticipated total programme
costs since 2016 to c.£1.3bn. In addition, where store exit routes in the
next six years lead to the recognition of gains on exit, particularly those
relating to asset management, these credits will also be recognised within
adjusting items as part of the programme. The anticipated total programme
costs to date do not include any costs that may arise in relation to a further
c.20 stores currently under consideration for closure within the next six
years. At this stage these c.20 stores remain commercially supportable and in
the event of a decision to close the store, the exit routes are not yet
certain.
These costs are reported as adjusting items on the basis that they are
significant in quantum, relate to a strategic initiative focused on reviewing
our store estate and to aid comparability from one period to the next. The
programme includes all stores within the programme to be closed by 2030/31.
Strategic programmes - International reset (£20.6m)
In September 2024 the Group announced a reset of priorities for
the International business. This included the closures of two European
distribution centres, the exiting of legacy franchise businesses not aligned
to the strategy and investing in technology relating to the strategy.
During the year the Group has incurred £20.6m of one-off charges that are not
considered to be day-to-day operational costs of the business, which mainly
related to contractual obligations due to the closure of the European
distribution centres and the write-off of certain assets no longer required.
These costs are adjusting items as they are significant to
the International business and the business would not have incurred these
costs without the strategy reset. Further costs of c.£5m are expected in
2025/26.
Strategic programmes - Digital and Technology transformation (£10.2m)
During 2024/25, to reduce costs and transform our business, the Group
confirmed our desire to build the Digital and Technology team we need for the
future, investing in our core foundations and business platforms. We will
reset our operating model under the new leadership team bringing more
capabilities inhouse, changing how we are structured and how we operate in
service of the business.
In total we are targeting to deliver £100m of structural cost savings over
the next five years, with an element of these savings coming from the new
operating model and resetting our partnerships. During 2024/25, as part of the
programme, the Group has incurred £6.9m of consultancy costs. The review of
structures is expected to result in a proposed reduction of 34 roles across
the Digital and Technology department, with a charge of £2.1m recognised in
the period primarily for redundancy and exit costs associated with these
changes. The provision is expected to be fully utilised during 2025/26.
Further charges of c.£21m are expected in relation to this programme to
2027/28, taking total programme costs to c.£31m.
These costs are considered to be adjusting items as the costs are part of the
strategic programme, are significant in value and would distort the
year-on-year profitability of the business.
Strategic programmes - Furniture simplification (£11.1m credit)
In March 2024 the Group withdrew from its two-person furniture delivery
operation. Following this the Group will no longer sell bulky products through
its existing 'two-person delivery network'.
A net credit of £11.1m has been recognised in the period, mainly reflecting
the settlement of the contractual obligations with suppliers and the profit on
disposal of a distribution centre. As part of this closure the Group has
incurred total programme net one-off charges of £7.2m that are not considered
to be day-to-day operational costs of the business.
These costs are adjusting items as they relate to a significant withdrawal of
an operation within the UK and ROI Fashion, Home & Beauty segment and the
business would not have incurred these costs but for the closure. No further
charges are expected in this programme.
Store impairments, impairment reversals and property charges (£2.3m credit)
The Group has recognised a number of charges and credits in the period
associated with the carrying value of items of property, plant and equipment.
The Group has performed impairment testing based on the latest Board-approved
budget and three-year plan future cash flow projections for UK, ROI and
International stores (excluding those stores that have been captured as part
of the store estate programme). As a result, store impairment testing has
identified stores where the current and anticipated future performance does
not support the carrying value of the stores. A charge of £0.2m (last year:
£0.5m) has been incurred primarily in respect of the impairment of assets
associated with these stores. In addition, a credit of £2.5m (last year:
£35.6m) has been recognised for the reversal of store impairments incurred in
previous periods, where revised future cash flow projections more than support
the carrying value of the stores, reflecting improved trading expectations
compared to those assumed at the prior year end. Refer to note 11 for further
details on the impairments.
The charges/credits have been classified as an adjusting item on the basis of
the significant quantum of the charge/credit in the period to the results of
the Group. Any future charges or reversals relating to stores previously
impaired within adjusting items will continue to be recognised within
adjusting items in line with the original charge. Any future charges or
reversals relating to stores not previously impaired within adjusting items or
not otherwise meeting the Group's adjusting items policy will be recognised in
the underlying results.
Impairment of investment in Ocado Retail Limited (£248.5m)
The Group has recognised an impairment charge of £248.5m against its
investment in Ocado Retail Limited ("ORL").
Ahead of the expected consolidation of ORL in April 2025 (see note 17), and in
accordance with the relevant accounting standards, the Group performed a
valuation exercise of ORL, which triggered a full impairment test of the
Group's existing investment in ORL.
The enterprise value of the business has been based on the value of the cash
flows that ORL is expected to generate in the future. This valuation was
performed using the latest ORL Board-approved five-year cash flow forecast,
adjusted for certain management assumptions, and having regard to historical
ORL performance, future achievable growth and the impact of committed
initiatives. A post-tax discount rate of 9.0% was applied, based on a market
participant view of comparable companies to ORL.
The Group determined that the recoverable amount of its investment in ORL is
£385.0m and as a result has recognised an impairment charge of £248.5m.
Refer to note 17 for further details on the impairment.
The impairment charge has been classified as an adjusting item on the basis it
is one off and significant in nature, and value, to the results of the Group
and to the Ocado segment.
M&S Bank transformation and insurance mis-selling provisions (£15.5m)
The Group has an economic interest in Marks and Spencer Financial Services plc
(trading as M&S Bank), a wholly owned subsidiary of HSBC UK Bank plc
('HSBC UK'), by way of a Relationship Agreement that entitles the Group to a
share of the profits of M&S Bank after appropriate deductions.
On 9 April 2024, the Group and HSBC UK agreed a new seven-year deal focused on
enhancing M&S' credit offering and payment solutions through M&S Bank
and bringing together digital payments and loyalty for M&S customers.
As previously disclosed, a deficit had accumulated since September 2012,
primarily relating to liabilities recognised by M&S Bank for redress to
customers in respect of possible mis-selling of financial products. Under the
terms of the renegotiated Relationship Agreement, the Group has agreed to
settle the deficit by the end of the new contract. Other one-off fees are also
payable to M&S Bank under the renegotiated Relationship Agreement which
will be recognised as a reduction to income over the term of contract.
Costs of £15.5m have been recognised in the period, predominantly relating to
the settlement of the deficit. Total programme costs to date are £20.5m with
future net charges of £88.3m expected over the next six financial years.
All of these costs are considered to be adjusting items as they are
significant in quantum and have crystallised as a result of major business
change linked to M&S Bank. Recognition of these costs within adjusting
items is consistent with the disclosure of costs relating to the deficit
previously recognised within adjusting items. Furthermore these costs are
significant in value to the results of both the Group and to the 'all other
segments' segment.
Legal settlement (£20.5m credit)
During the period an agreement was reached in relation to damages from an
independent third party following its involvement in anti-competitive
behaviour that adversely impacted the Group. The income from this was offset
by legal and professional fees incurred in relation to this claim and net
income of £20.5m was recognised.
This net income is an adjusting item as it is significant in value, related to
a litigation settlement and is not considered to be a normal income stream of
the business. No future charges/credits are expected in relation to this
settlement.
Net pension finance income (£4.1m credit)
In the period net finance income of £4.1m was recognised (last year:
£24.0m).
The net pension finance income or expense can fluctuate significantly each
year due to changes in external market factors that are outside management's
control. Furthermore, as the scheme is now closed, it is not considered to be
part of the ongoing operating activities of the Group.
Therefore, consistent with how management assesses the performance of the
business, the net pension finance income is considered to be an adjusting
item.
Net finance costs incurred in relation to Gist Limited deferred and contingent
consideration (£7.6m)
Deferred consideration, resulting from the acquisition of Gist Limited, is
held at amortised cost, whilst the contingent consideration is remeasured at
fair value at each reporting date with the changes in fair value recognised in
profit or loss. A charge of £7.6m (last year: £8.2m) has been recognised in
the period, representing the discount unwind of the deferred consideration and
revaluation of the contingent consideration payable. See note 12 for further
details. The discount unwind and change in fair value is considered to be an
adjusting item as it relates to a major transaction and consequently is not
considered representative of the normal operating performance of the Group.
The discount unwind and remeasurement will be recognised in adjusting items
until the final payments are made.
4 Finance income/(costs)
2025 2024
£m £m
Bank and other interest receivable 54.9 52.3
Interest income of subleases 5.7 5.7
Finance income before adjusting items 60.6 58.0
Finance income in adjusting items 4.1 88.7
Finance income 64.7 146.7
Other finance costs (4.6) (6.3)
Interest payable on syndicated bank facility (4.6) (4.8)
Interest payable on Medium-Term Notes (36.7) (42.2)
Interest payable on lease liabilities (115.9) (116.2)
Unwind of discount on provisions (6.4) (6.6)
Unwind of discount on Partnership liability to the Marks & Spencer UK (1.4) (4.1)
Pension Scheme (see note 9)
Finance costs before adjusting items (169.6) (180.2)
Finance costs in adjusting items (7.6) (8.2)
Finance costs (177.2) (188.4)
Net finance costs (112.5) (41.7)
5 Income tax expense
The effective tax rate was 43.0% (last year: 36.8%). The effective tax rate in
respect of the profit before adjusting items was 26.7% (last year: 33.2%).
6 Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax
and the weighted average number of ordinary shares in issue during the year.
The adjusted earnings per share figures have also been calculated based on
earnings before adjusting items that are significant in nature and/or quantum
and are considered distortive to underlying results (see note 3). These have
been presented to provide shareholders with an additional measure of the
Group's year-on-year performance.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Group has four types of dilutive potential ordinary shares,
being: those share options granted to employees where the exercise price is
less than the average market price of the Company's ordinary shares during the
year; unvested shares granted under the Deferred Share Bonus Plan; unvested
shares granted under the Restricted Share Plan; and unvested shares within the
Performance Share Plan that have met the relevant performance conditions at
the end of the reporting period.
Details of the adjusted earnings per share are set out below:
2025 2024
£m £m
Profit attributable to equity shareholders of the Company 295.7 431.2
Add/(less):
Adjusting items (see note 3) 363.7 43.9
Tax on adjusting items (14.0) 9.5
Profit before adjusting items attributable to equity shareholders of the 645.4 484.6
Company
Million Million
Weighted average number of ordinary shares in issue 2,021.9 1,973.2
Potentially dilutive share options under Group's share option schemes 88.8 102.7
Weighted average number of diluted ordinary shares 2,110.7 2,075.9
Pence Pence
Basic earnings per share 14.6 21.9
Diluted earnings per share 14.0 20.8
Adjusted basic earnings per share 31.9 24.6
Adjusted diluted earnings per share 30.6 23.3
7 Dividends
2025 2024 2025 2024
per share per share £m £m
Dividends on equity ordinary shares
Paid interim dividend 1.0p 1.0p 20.3 19.6
Paid final dividend 2.0p - 40.2 -
3.0p 1.0p 60.5 19.6
The directors have approved a final dividend of 2.6p per share (last year:
2.0p per share), which, in line with the requirements of IAS 10 Events after
the Reporting Period, has not been recognised within these results. This final
dividend of c.£53.4m (last year: £40.2m) will be paid on 4 July 2025 to
shareholders whose names are on the Register of Members at the close of
business on 30 May 2025. The ordinary shares will be quoted ex-dividend on 29
May 2025.
A dividend reinvestment plan (DRIP) is available to shareholders who would
prefer to invest their dividends in the shares of the Company. For those
shareholders electing to receive the DRIP, the last date for receipt of a new
election is 13 June 2025.
8 Retirement benefits
2025 2024
£m £m
Opening net retirement benefit (deficit)/ surplus 77.2 477.4
Current service cost (0.1) (0.1)
Administration cost (5.2) (5.2)
Net interest income 4.1 24.0
Employer contributions (49.3) 0.5
Remeasurements (149.2) (419.2)
Exchange movement (0.2) (0.2)
Closing net retirement benefit (deficit)/ surplus (122.7) 77.2
2025 2024
£m £m
Total market value of assets 5,292.8 6,108.9
Present value of scheme liabilities (5,411.7) (6,027.1)
Net funded pension plan asset (118.9) 81.8
Unfunded retirement benefits (2.1) (2.2)
Post-retirement healthcare (1.7) (2.4)
Net retirement benefit (deficit)/ surplus (122.7) 77.2
Analysed in the statement of financial position as:
Retirement benefit asset - 81.8
Retirement benefit deficit (122.7) (4.6)
Net retirement benefit (deficit)/ surplus (122.7) 77.2
Financial assumptions
The financial assumptions for the UK DB pension scheme and the most recent
actuarial valuations of the other post-retirement schemes have been updated by
independent qualified actuaries to take account of the requirements of IAS 19
'Employee Benefits' in order to assess the liabilities of the schemes. The
most significant of these are the discount rate and the inflation rate which
are 5.75% (last year: 4.80%) and 3.10% (last year: 3.20%). The inflation rate
of 3.10% (last year: 3.20%) reflects the Retail Price Index (RPI) rate.
The amount of the surplus or deficit varies if the main financial assumptions
change, particularly the discount rate. If the discount rate decreased by
0.25% the deficit would increase by c.£20m. If the inflation rate decreased
by 0.25%, the deficit would increase by c.£10m.
With the pensioner buy-in policies purchased in September 2020, April 2019 and
March 2018, the Scheme has now, in total, insured around 70% of the pensioner
cash flow liabilities for pensions in payment. The buy-in policies cover
specific pensioner liabilities and pass all risks to an insurer in exchange
for a fixed premium payment, thus reducing the Group's exposure to changes in
longevity, interest rates, inflation and other factors.
9 Marks and Spencer Scottish Limited Partnership
Marks and Spencer plc is a general partner and the Marks & Spencer UK
Pension Scheme is a limited partner of the Marks and Spencer Scottish Limited
Partnership (the "Partnership"). Under the Partnership agreement, the limited
partners have no involvement in the management of the business and shall not
take any part in the control of the Partnership. The general partner is
responsible for the management and control of the Partnership and, as such,
the Partnership is consolidated into the results of the Group.
The Partnership holds £1.3bn (last year: £1.3bn) of properties at book
value which have been leased back to Marks and Spencer plc. The Group retains
control over these properties, including the flexibility to substitute
alternative properties into the Partnership.
In February 2025 the Group and the Pension Scheme Trustees agreed 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 table below shows
the impact on 2024/25.
First Partnership Second Partnership
interest interest Total
£m £m £m
Distributions due in 2024/25 before amendment to Partners' entitlements 89.7 36.4 126.1
Actual pension scheme distributions paid in 2024/25 (40.5) - (40.5)
Distributions no longer due to be paid 49.2 36.4 85.6
The first limited Partnership interest (held by the Marks & Spencer UK
Pension Scheme), previously entitled the Pension Scheme to receive £89.7m in
June 2024. During the period, the Group and the Pension Scheme Trustees agreed
to amend the distribution dates as part of the restructure so that the Pension
Scheme received £40.0m in June 2024 and £0.5m in February 2025 and is
entitled to no further distributions under this interest.
The second Partnership interest (also held by the Marks & Spencer UK
Pension Scheme), previously entitled the Pension Scheme to receive a further
annual distribution of £36.4m from June 2017 until June 2031. During the
period, the Group and the Pension Scheme Trustees agreed to amend the
distribution dates as part of the restructure so that the Pension Scheme
received no distributions in the year and is entitled to no further
distributions.
The new third Partnership interest (also held by the Marks & Spencer UK
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.
The Partnership liability in relation to the first interest of £nil (last
year: £88.8m) was included as a financial liability in the Group's financial
statements as it was a transferable financial instrument and measured at
amortised cost, being the net present value of the future expected
distributions from the Partnership. During the year to 29 March 2025 an
interest charge of £1.4m (last year: £4.1m) was recognised in the income
statement representing the unwinding of the discount included in this
obligation. The first limited Partnership interest of the Pension Scheme was
included within the UK DB Pension Scheme assets, valued at £nil (last year:
£88.5m).
The second Partnership interest was not a transferable financial instrument as
the Scheme Trustee does not have the right to transfer it to any party other
than a successor Trustee. It was therefore not included as a plan asset within
the UK DB Pension Scheme surplus reported in accordance with IAS 19.
Similarly, the associated liability was not included on the Group's statement
of financial position, rather the annual distribution was recognised as a
contribution to the scheme each year.
The third Partnership interest is not a transferable financial instrument as
the Scheme Trustee does not have the right to transfer it to any party other
than a successor Trustee. It is therefore not included as a plan asset within
the UK DB Pension Scheme surplus reported in accordance with IAS 19.
Similarly, the associated liability is not included on the Group's statement
of financial position, rather the annual distribution is recognised as a
contribution to the scheme each year.
10 Intangible assets
Goodwill Brands Computer software Computer software under development Total
£m £m £m £m £m
At 1 April 2023
Cost 140.6 118.7 1,612.5 92.2 1,964.0
Accumulated amortisation, impairments and disposals (112.2) (113.7) (1,542.9) (32.1) (1,800.9)
Net book value 28.4 5.0 69.6 60.1 163.1
Year ended 30 March 2024
Opening net book value 28.4 5.0 69.6 60.1 163.1
Additions - - 1.0 68.8 69.8
Transfers and reclassifications - - 89.3 (82.2) 7.1
Disposals - - (5.6) - (5.6)
Amortisation charge - (0.7) (54.0) - (54.7)
Exchange difference - - (0.2) - (0.2)
Closing net book value 28.4 4.3 100.1 46.7 179.5
At 30 March 2024
Cost 140.6 118.7 1,702.5 78.8 2,040.6
Accumulated amortisation, impairments and disposals (112.2) (114.4) (1,602.4) (32.1) (1,861.1)
Net book value 28.4 4.3 100.1 46.7 179.5
Year ended 29 March 2025
Opening net book value 28.4 4.3 100.1 46.7 179.5
Additions - - 2.0 96.5 98.5
Transfers and reclassifications - - 103.4 (125.9) (22.5)
Disposals - - (3.3) - (3.3)
Amortisation charge - (0.7) (63.8) - (64.5)
Exchange difference - - (0.3) - (0.3)
Closing net book value 28.4 3.6 138.1 17.3 187.4
At 29 March 2025
Cost 140.6 118.7 1,807.9 49.4 2,116.6
Accumulated amortisation, impairments and disposals (112.2) (115.1) (1,669.8) (32.1) (1,929.2)
Net book value 28.4 3.6 138.1 17.3 187.4
Goodwill related to the following assets and groups of cash generating units
(CGUs):
per una India Sports Edit Other Total Goodwill
£m £m £m £m £m
Net book value at 30 March 2024 and 29 March 2025 16.5 6.4 4.8 0.7 28.4
Goodwill impairment testing
Goodwill is not amortised but is tested annually for impairment with the
recoverable amount being determined from value in use calculations.
The goodwill balance relates to the goodwill recognised on the acquisition of
per una £16.5m (last year: £16.5m), India £6.4m (last year: £6.4m), Sports
Edit £4.8m (last year: £4.8m) and other £0.7m (last year: £0.7m).
Goodwill for India is monitored by management at a country level, including
the combined retail and wholesale businesses, and has been tested for
impairment on that basis.
The per una brand is a definite life intangible asset amortised on a
straight-line basis over a period of 15 years. The brand intangible was
acquired for a cost of £80.0m and has been fully amortised. It is held at a
net book value of £nil (last year: £nil). The per una goodwill of £16.5m is
tested for annually for impairment.
The cash flows used for impairment testing are based on the Group's latest
budget and forecast cash flows, covering a three-year period, which have
regard to historical performance and knowledge of the current market, together
with the Group's views on the future achievable growth and the impact of
committed cash flows. The cash flows include ongoing capital expenditure
required to maintain the store network, but exclude any growth capital
initiatives not committed.
Cash flows beyond this three-year period are extrapolated using a long-term
growth rate based on the Group's current view of achievable long-term growth.
The Group's current view of achievable long-term growth for per una is 2.0%
(last year: 2.0%), which is the same as the overall Group long-term growth
rate of 2.0% (last year: 2.0%). The Group's current view of achievable
long-term growth for India is 5.5% (last year: 5.5%).
Management estimates discount rates that reflect the current market assessment
of the time value of money and the risks specific to each asset or CGU. The
pre-tax discount rates are derived from the Group's post-tax weighted average
cost of capital ("WACC") which has been calculated using the capital asset
pricing model, the inputs of which include a country risk-free rate, equity
risk premium, Group size premium and a risk adjustment (beta). The post-tax
WACC is subsequently grossed up to a pre-tax rate and was 14.5% for per una
(last year: 13.5%) and 16.7% for India (last year: 16.1%).
The immediately quantifiable impacts of climate change and costs expected to
be incurred in connection with our net zero commitments, are included within
the Group's budget and three-year plan which have been used to support the
impairment reviews, with no material impact on cash flows.
Management has performed sensitivity analysis on the key assumptions in the
impairment model using reasonably possible changes in these key assumptions,
both individually and in combination. Management has considered reasonably
possible changes in key assumptions that would cause the carrying amounts of
goodwill or brands to exceed the value in use for each asset.
For both per una and India respectively, there are no reasonably possible
changes in key assumptions that would lead to an impairment and the
assumptions do not give rise to a key source of estimation uncertainty.
11 Property, plant and equipment
The Group's property, plant and equipment of £5,408.5m (last year:
£5,190.1m) consists of owned assets of £3,910.9m (last year: £3,760.8m) and
right-of-use assets of £1,497.6m (last year: £1,429.3m).
Property, plant and equipment - owned
Land and buildings Fixtures, fittings and equipment Assets in the course of construction Total
£m £m £m £m
At 1 April 2023
Cost 2,911.4 5,532.3 160.6 8,604.3
Accumulated depreciation, impairments and disposals (843.8) (3,994.6) (18.2) (4,856.6)
Net book value 2,067.6 1,537.7 142.4 3,747.7
Year ended 30 March 2024
Opening net book value 2,067.6 1,537.7 142.4 3,747.7
Additions 3.4 26.9 313.3 343.6
Transfers and reclassifications 10.3 304.9 (324.0) (8.8)
Disposals (46.5) (1.6) (1.1) (49.2)
Impairment reversals 19.2 12.8 - 32.0
Impairment charge (9.1) (14.9) - (24.0)
Depreciation charge (32.5) (242.3) - (274.8)
Exchange difference (3.5) (2.1) (0.1) (5.7)
Closing net book value 2,008.9 1,621.4 130.5 3,760.8
At 30 March 2024
Cost 2,852.7 5,709.5 148.8 8,711.0
Accumulated depreciation, impairments and disposals (843.8) (4,088.1) (18.3) (4,950.2)
Net book value 2,008.9 1,621.4 130.5 3,760.8
Year ended 29 March 2025
Opening net book value 2,008.9 1,621.4 130.5 3,760.8
Additions 5.1 27.7 457.8 490.6
Transfers and reclassifications 33.9 302.3 (315.1) 21.1
Disposals (33.8) (29.8) - (63.6)
Impairment reversals 8.5 10.9 - 19.4
Impairment charge (33.3) (14.7) - (48.0)
Depreciation charge (7.9) (257.4) - (265.3)
Exchange difference (2.5) (1.6) - (4.1)
Closing net book value 1,978.9 1,658.8 273.2 3,910.9
At 29 March 2025
Cost 2,786.4 5,745.8 292.5 8,824.7
Accumulated depreciation, impairments and disposals (807.5) (4,088.0) (18.3) (4,913.8)
Net book value 1,978.9 1,657.8 274.2 3,910.9
Disposals in the year include assets with gross book value of £388.7m (last
year: £216.1m).
Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the period:
Right-of-use assets
Land and buildings Fixtures, fittings and equipment Total
£m £m £m
At 1 April 2023 1,389.8 66.2 1,456.0
Additions 161.1 15.0 176.1
Transfers and reclassifications 1.7 - 1.7
Disposals (17.6) - (17.6)
Impairment reversals 13.6 - 13.6
Impairment charge (21.7) - (21.7)
Depreciation charge (148.8) (23.3) (172.1)
Exchange difference (6.6) (0.1) (6.7)
At 30 March 2024 1,371.5 57.8 1,429.3
Additions 215.3 44.7 260.0
Transfers and reclassifications 1.5 - 1.5
Disposals (2.7) - (2.7)
Impairment reversals 1.2 3.1 4.3
Impairment charge (14.9) (32.1) (47.0)
Depreciation charge (141.0) (1.0) (142.0)
Exchange difference (5.8) - (5.8)
At 29 March 2025 1,425.1 72.5 1,497.6
Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes, the Group has determined that each store is a
separate CGU, with the exception of Outlet stores, which are considered
together as one CGU. Click & Collect sales are included in the cash flows
of the relevant CGU.
Each CGU is tested for impairment at the balance sheet date if any indicators
of impairment and impairment reversal have been identified. Stores identified
within the Group's store estate programme are automatically tested for
impairment (see note 3).
The value in use of each CGU is calculated based on the Group's latest budget
and forecast cash flows, covering a three-year period, which have regard to
historic performance and knowledge of the current market, together with the
Group's views on the future achievable growth and the impact of committed
initiatives. The cash flows include ongoing capital expenditure required to
maintain the store network, but exclude any growth capital initiatives not
committed. Cash flows beyond this three-year period are extrapolated using a
long-term growth rate based on management's future expectations, with
reference to forecast GDP growth. These growth rates do not exceed the
long-term growth rate for the Group's retail businesses in the relevant
territory. If the CGU relates to a store which the Group has identified as
part of the store estate programme, the value in use calculated has been
modified by estimation of the future cash flows up to the point where it is
estimated that trade will cease and then estimation of the timing and amount
of costs associated with closure detailed fully in note 3. The immediately
quantifiable impacts of climate change and costs expected to be incurred in
connection with our net zero commitments, are included within the Group's
budget and three year plan which have been used to support the impairment
reviews, with no material impact on cash flows. We also expect any potential
store refurbishments to be phased over multiple years and therefore any
changes required due to climate change would not have a material impact in any
given year and the warehouse and support centres are located in areas which we
would not expect to be physically impacted by climate change. As a consequence
there has been no material impact in the forecast cash flows used for
impairment testing.
The key assumptions in the value in use calculations are the growth rates of
sales and gross profit margins, changes in the operating cost base, long-term
growth rates and the risk-adjusted pre-tax discount rate. The pre-tax discount
rates are derived from the Group's weighted average cost of capital, which has
been calculated using the capital asset pricing model, the inputs of which
include a country risk-free rate, equity risk premium, Group size premium and
a risk adjustment (beta). The pre-tax discount rates range from 8.0% to 19.3%
(last year: 7.3% to 17.6%). If the CGU relates to a store which the Group has
identified as part of the UK store estate programme, the additional key
assumptions in the value-in-use calculations are costs associated with
closure, the disposal proceeds from store exits and the timing of the store
exits.
Impairments - UK stores excluding the store estate programme
During the year, the Group has recognised an impairment charge of £4.5m and
impairment reversals of £2.5m in property, plant and equipment as a result of
UK store impairment testing unrelated to the store estate programme (last
year: impairment charge of £0.5m and impairment reversals of £31.5m). The
impaired stores were impaired to their value in use recoverable amount of
£4.0m, which is their carrying value at year end. The stores with impairment
reversals were written back to the lower of their value in use recoverable
amount, and the carrying value if the impairment had not occurred, of £2.5m.
£4.3m (last year: £nil) of the impairment charge was included in underlying
expenses, with a £0.2m impairment charge and a £2.5m impairment reversal
(last year: £0.5m impairment charge and £31.5m impairment reversal) included
in adjusting items.
For UK stores, when considering both impairment charges and reversals, cash
flows beyond the three-year period are extrapolated using the Group's current
view of achievable long-term growth of 2.0%, adjusted to 0% where management
believes the current trading performance and future expectations of the store
do not support the growth rate of 2.0%. The rate used to discount the forecast
cash flows for UK stores is 13.6% (last year: 12.5%).
The cash flows used within the impairment model are based on assumptions which
are sources of estimation uncertainty and small movements in these assumptions
could lead to further impairments. Management has performed sensitivity
analysis on the key assumptions in the impairment model using reasonably
possible changes in these key assumptions across the UK store portfolio.
Neither an increase or reduction in sales of 5% from the three-year plan in
year 3, a 250 basis point increase in the discount rate, a 25 basis point
increase or reduction in gross profit margin from year 3 onwards, result in a
significant change to the impairment charge or impairment reversal,
individually or in combination with the other reasonably possible scenarios
considered.
Impairments - store estate programme
During the year, the Group has recognised an impairment charge of £90.5m and
impairment reversals of £21.1m relating to the ongoing store estate programme
(last year: impairment charge of £37.0m and impairment reversals of £14.1m).
These stores were impaired to their value in use recoverable amount of
£225.2m, which is their carrying value at year end. The impairment charge
relates to the store closure programme and has been recognized as part of the
£84.4m store estate charge within adjusting items (see note 3). Impairment
reversals predominantly reflect changes to expected store closure dates and
improved trading expectations compared to those assumed at the end of the
prior year end.
Where the planned closure date for a store is outside the three-year plan
period, no growth rate is applied. The rate used to discount the forecast cash
flows for UK stores is 8.0% (last year: 7.3%).
As disclosed in the accounting policies (note 1), the cash flows used within
the impairment models for the store estate programme are based on assumptions
which are sources of estimation uncertainty and small movements in these
assumptions could lead to further impairments. Management has performed
sensitivity analysis on the key assumptions in the impairment model using
reasonably possible changes in these key assumptions across the store estate
programme.
A delay of 12 months in the date of each store exit would result in a decrease
in the impairment charge of £34.4m.
Neither an increase or decrease of 5% in planned sales in years 2 and 3 (where
relevant), a 250 basis point increase in the discount rate, a 25 basis point
reduction in gross profit margin during the period of trading nor a 2%
increase in the costs associated with exiting a store would result in a
significant increase to the impairment charge, individually or in combination
with the other reasonably possible scenarios considered.
Impairments - International stores
During the year the Group recognised an impairment charge of £nil (last year:
£0.7m) in International stores as a result of store impairment testing.
12 Financial instruments
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
· Level 1: quoted (unadjusted) prices in active markets for
identical assets and
liabilities.
· Level 2: not traded in an active market but the fair values are
based on quoted market prices or alternative pricing sources with reasonable
levels of price transparency. The Group's level 2 financial instruments
include interest rate and foreign exchange derivatives. Fair value is
calculated using discounted cash flow methodology, future cash flows are
estimated based on forward exchange rates and interest rates (from observable
market curves) and contract rates, discounted at a rate that reflects the
credit risk of the various counterparties for those with a long maturity.
· Level 3: techniques that use inputs which have a significant
effect on the recorded fair value that are not based on observable market
data.
At the end of the reporting period, the Group held the following financial
instruments at fair value:
2025 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Assets measured at fair value
Financial assets at fair value through profit or loss (FVTPL)
- derivatives held at FVTPL - - - - - 0.2 - 0.2
- other investments(1) 274.5 21.7 14.6 310.8 - 12.3 12.6 24.9
Derivatives used for hedging - 7.3 - 7.3 - 7.5 - 7.5
Liabilities measured at fair value
Financial liabilities at fair value through profit or loss
- derivatives held at FVTPL - (0.5) - (0.5) - (1.8) - (1.8)
- Gist contingent consideration(2) - - (25.6) (25.6) - - (25.6) (25.6)
Derivatives used for hedging - (41.2) - (41.2) - (40.2) - (40.2)
There were no transfers between the levels of the fair value hierarchy during
the period. There were also no changes made to any of the valuation techniques
during the period.
(1) Within level 1 other investments is £274.5m (last year: £nil) of
money market deposits held by various group entities. Within Level 3 other
investments, the Group holds £11.6m of venture capital investments, managed
by True Capital Limited, measured at FVTPL (last year: £9.4m) which are Level
3 instruments. The fair value of these investments has been determined in
accordance with the International Private Equity and Venture Capital ("IPEV")
Valuation Guidelines. Where investments are either recently acquired or there
have been recent funding rounds with third parties, the primary input when
determining the valuation is the latest transaction price.
(2 ) As part of the investment in Gist Limited, the Group has agreed to
pay the former owners of Gist Limited additional consideration of up to
£25.0m plus interest when freehold properties are disposed of under certain
conditions (for other consideration payable). There is no minimum amount
payable. The Group has the ability to retain the properties should it wish to
do so, in which case the full amount of £25.0m plus interest will be payable
on the third anniversary of completion.
The fair value of the contingent consideration arrangement of
£25.6m was estimated by calculating the present value of the future expected
cashflows. The estimates are based on a discount rate of 5.3%. A 2.5% change
in the discount rate would result in a change in fair value of £0.7m.
The Marks & Spencer UK Pension Scheme holds a number of financial
instruments which make up the pension asset of £5,292.8m (last year:
£6,108.9m). Level 1 and Level 2 financial assets measured at fair value
through other comprehensive income amounted to £1,754.7m (last year:
£2,074.3m). Additionally, the scheme assets include £3,538.1m (last year:
£4,034.6m) of Level 3 financial assets. See note 8 for information on the
Group's retirement benefits.
The following table represents the changes in Level 3 instruments held by the
Pension Schemes:
2025 2024
£m £m
Opening balance 4,034.6 4,027.2
Fair value gain/(loss) recognised in other comprehensive income 53.8 362.5
Other movements recognised in profit or loss (48.5) -
Cash withdrawals (501.8) (355.1)
Closing balance 3,538.1 4,034.6
Fair value of financial instruments
With the exception of the Group's fixed rate bond debt and the Partnership
liability to the Marks & Spencer UK Pension Scheme (note 9), there were no
material differences between the carrying value of non-derivative financial
assets and financial liabilities and their fair values as at the balance sheet
date.
The carrying value of the Group's fixed rate bond debt (level 1 equivalent)
was £717.1m (last year: £921.7m); the fair value of this debt was £727.7m
(last year: £919.8m) which has been calculated using quoted market prices and
includes accrued interest. The carrying value of the Partnership liability to
the Marks & Spencer UK Pension Scheme (level 2 equivalent) is £nil (last
year: £88.8m) and the fair value of this liability is £nil (last year:
£81.9m).
13 Contingencies and commitments
A. Capital commitments
2025 2024
£m £m
Commitments in respect of properties in the course of construction 359.7 175.2
Software capital commitments 9.2 6.5
368.9 181.7
During 2021/22, the Group committed to invest up to £25.0m, over a three-year
period to 2024/25, in an innovation and consumer growth fund managed by True
Capital Limited. This period was extended to 2026/27 during the year 2023/24.
The fund can drawdown amounts at any time over the five-year period to make
specific investments. At 29 March 2025, the Group had invested £12.9m (last
year: £10.1m) of this commitment, which is held as a non-current other
investment and measured at fair value through profit or loss.
B. Other material contracts
See note 9 for details on the Partnership arrangement with the Marks &
Spencer UK Pension Scheme.
14 Analysis of cash flows given in the statement of cash flows
Cash flows from operating activities
2025 2024
£m £m
Profit on ordinary activities after taxation 291.9 425.2
Income tax expense 219.9 247.3
Finance costs 177.2 188.4
Finance income (64.7) (146.7)
Operating profit 624.3 714.2
Share of results of Ocado Retail Limited 28.7 37.3
Share of results in other joint ventures (0.5) 0.3
Increase in inventories (73.3) (31.3)
Increase in receivables (33.7) (17.5)
Increase in payables 68.4 126.0
Depreciation, amortisation, impairments and disposals 542.6 526.3
Non-cash share based payment expense 52.4 48.3
Non-cash pension expense 5.6 5.3
Defined benefit pension funding (0.4) (0.4)
Adjusting items net cash outflows(1,2) (25.6) (38.0)
Adjusting items M&S Bank(3) (27.4) (2.0)
Adjusting items within operating profit 360.2 124.4
Cash generated from operations 1,521.3 1,492.9
(1) Excludes £19.0m (last year: £24.1m) of surrender payments included
within repayment of lease liabilities in the consolidated statement of cash
flows relating to leases within the store estate programme.
(2) Adjusting items net cash outflows relate to strategic programme costs
associated with the Store estate, UK logistics, Furniture simplification,
Digital and Technology transformation and income associated with a legal
settlement.
(3) Adjusting items M&S Bank relates to one-off fees paid to M&S Bank
under the new Relationship Agreement which will be recognised as a reduction
to income over the term of the contract. Last half year and last year end,
this related to M&S Bank income recognised in operating profit offset by
charges incurred in relation to the insurance mis-selling provision, which is
a non-cash item.
15 Analysis of net debt
A. Reconciliation of movement in net debt
At Cash flows excluding interest Cash flows relating to interest(1) Changes in fair values Lease additions and remeasurements Exchange and other At
2 April non-cash 30 March
2023 movements 2024
£m £m £m £m £m £m £m
Net debt
Cash and cash equivalents 1,067.9 89.8 (133.2) - - (2.1) 1,022.4
Net cash per statement of cash flows 1,067.9 89.8 (133.2) - - (2.1) 1,022.4
Current other financial assets 13.0 (0.7) - - - - 12.3
Liabilities from financing activities - - -
Medium Term Notes (1,346.4) 395.6 65.7 - - (36.6) (921.7)
Lease liabilities (2,281.6) 243.5 102.0 - (176.0) (99.4) (2,211.5)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note (121.9) 40.0 - - - - (81.9)
9)
Derivatives held to hedge Medium Term Notes (5.2) - - (16.4) - - (21.6)
Liabilities from financing activities (3,755.1) 679.1 167.7 (16.4) (176.0) (136.0) (3,236.7)
Less: Cash flows related to interest and derivative instruments 37.0 - (34.5) 16.4 - 17.3 36.2
Net debt (2,637.2) 768.2 - - (176.0) (120.8) (2,165.8)
At Cash flows excluding interest Cash flows relating to interest(1) Changes in fair values Lease additions and remeasurements Exchange and other At
31 March March non-cash 29 March
2024 movements 2025
£m £m £m £m £m £m £m
Net debt
Cash and cash equivalents 1,022.4 (50.2) (106.5) - - (1.2) 864.5
Net cash per statement of cash flows 1,022.4 (50.2) (106.5) - - (1.2) 864.5
Current other financial assets 12.3 277.2 - - - - 289.5
Liabilities from financing activities -
Medium Term Notes (921.7) 187.8 45.6 - - (28.8) (717.1)
Lease liabilities (2,211.5) 258.6 103.4 - (261.0) (116.9) (2,227.4)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note (81.9) 40.0 0.5 - - 41.4 -
9)
Derivatives held to hedge Medium Term Notes (21.6) - - 11.1 - - (10.5)
Liabilities from financing activities (3,236.7) 486.4 149.5 11.1 (261.0) (104.3) (2,955.0)
Less: Cash flows related to interest and derivative instruments 36.2 - (43.0) (11.1) - 29.3 11.4
Net debt (2,165.8) 713.4 - - (261.0) (76.2) (1,789.6)
(1)Change of presentation from last year to split of cash flows into interest
and excluding interest columns.
B. Reconciliation of net debt to statement of financial position
2025 2024
£m £m
Statement of financial position and related notes
Cash and cash equivalents 864.5 1,022.4
Current other financial assets 289.5 12.3
Medium Term Notes - excluding impact of foreign exchange (738.3) (937.2)
Lease liabilities (2,227.4) (2,211.5)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note - (88.8)
9)
(1,811.7) (2,202.8)
Interest payable included within related borrowing and the Partnership 22.1 37.0
liability to the Marks & Spencer UK Pension Scheme
Net debt (1,789.6) (2,165.8)
16 Related party transactions
A. Joint ventures and associates
Ocado Retail Limited
The following transactions were carried out with Ocado Retail Limited, an
associate of the Group.
Loan to Ocado Retail Limited
2025 2024
£m £m
Opening balance 92.2 30.9
Loans advanced - 60.0
Interest charged 8.5 6.0
Interest repaid - (4.7)
Closing balance 100.7 92.2
The loan matures during 2039/40 and accrues interest at Sterling Overnight
Index Average ("SONIA") plus an applicable margin.
Parent guarantee
Ocado Retail Limited, an associate of the Group, entered into a £30.0m
revolving credit facility on 9 May 2024, of which £nil was drawn at 29 March
2025. The Group, along with Ocado Group plc, jointly guarantee the facility.
Last year, the facility had expired.
Sales and purchases of goods and services
2025 2024
£m £m
Sales of goods and services 62.2 44.9
Purchases of goods and services - 0.1
Included within trade and other receivables is a balance of £7.9m (last year:
£4.1m) owed by Ocado Retail Limited.
Nobody's Child Limited
Nobody's Child Limited became an associate of the Group in November 2021.
During the year, the Group made purchases of goods amounting to £9.7m (last
year: £7.0m)
At 29 March 2025, there was a balance of £nil within trade and other payables
(last year: £0.1m) owed to Nobody's Child Limited, and £3.0m included within
other financial assets (last year: £2.7m) owed from Nobody's Child Limited.
17 Investments in joint ventures and associates
The Group holds a 50% interest in Ocado Retail Limited, a company incorporated
in the UK. The remaining 50% interest is held by Ocado Group Plc. Ocado Retail
Limited is an online grocery retailer, operating through the ocado.com and
ocadozoom.com websites.
At the reporting date, Ocado Retail Limited was considered an associate of the
Group as certain rights were conferred on Ocado Group plc for an initial
period of at least five years from acquisition in August 2019, giving Ocado
Group plc control of the company. Through Board representation and shareholder
voting rights, the Group was considered to have significant influence and
therefore the investment in Ocado Retail Limited was treated as an associate
and the Group applied the equity method of accounting. Subsequent to the year
end, on 6 April 2025, Ocado Group plc gave up those rights to the Group. There
was no change in economic interest of both shareholders in Ocado Retail
Limited, nor any consideration paid by the Group, as a result of this change.
From 6 April 2025, Ocado Retail Limited is consolidated as a subsidiary of the
Group (see note 18).
Previously, Ocado Retail Limited's financial year end aligned with Ocado Group
plc. For the Group's purpose of applying the equity method of accounting,
Ocado Retail Limited had prepared financial information to the nearest
quarter-end date of its financial year end, as to do otherwise would be
impracticable. As part of the above change, Ocado Retail Limited has changed
its year end date to align to the Group meaning that the Group's results for
Ocado Retail Limited are incorporated in these financial statements from 4
March 2024 to 6 April 2025. There were no significant events or transactions
in the period from 29 March 2025 to 6 April 2025.
The carrying amount of the Group's interest in Ocado Retail Limited is
£385.0m (last year: £677.1m). The Group's share of Ocado Retail Limited
losses of £43.6m (last year: loss of £79.9m) includes the Group's share of
underlying losses of £28.7m (last year: share of underlying losses: £37.3m)
and the Group's share of adjusting item charges of £2.0m (last year: £29.7m)
and adjusting item charges of £12.9m (last year: £12.9m) (see note 3).
During the year, following the identification of an impairment indicator
triggered as part of the preparations ahead of the change of control and
consolidation of Ocado Retail Limited, the Group has recognised an investment
impairment charge of £248.5m (last year: £nil). This charge has been
recognised as an adjusting item (see note 3).
Under IAS 36 Impairment of Assets, the recoverable amount was based on a fair
value methodology and was estimated using the latest ORL Board-approved 5-year
cash flow forecast, adjusted for certain management assumptions, and having
regard to historic ORL performance, future achievable growth and the impact of
committed initiatives. The fair value valuation technique relies on inputs not
in the public domain and is categorised as level 3 in the hierarchy (for
further details see 'fair value hierarchy' on page 46 in note 12).
Significant assumptions have been used in calculating the recoverable amount,
which are subject to uncertainty and involve judgement, including the cash
flows used, and the post-tax discount rate of 9.0%. The key assumptions most
likely to have a material impact are revenue, fulfilment and delivery costs
and the discount rate.
Management has performed sensitivity analysis on the key assumptions and using
reasonably possible changes would result in the following impacts:
· A reduction in revenue of 5% in each year, including the terminal
year, while maintaining margin rate, would increase the impairment charge by
£52.0m.
· An increase in fulfilment and delivery costs of 1.0% in each
year, including the terminal year, would increase the impairment charge by
£41.0m.
· A 100-basis point increase in the discount rate would increase
the impairment charge by £80.0m.
In the event that all three were to occur simultaneously, the impairment
charge would increase by £161.0m.
Summarised financial information in respect of Ocado Retail Limited (the
Group's only material associate) is set out below and represents amounts in
the Ocado Retail Limited financial statements prepared in accordance with
IFRS, adjusted by the Group for equity accounting purposes. Summarised
financial information in respect of Ocado Retail Limited (the Group's only
material associate) is set out below and represents amounts in the Ocado
Retail Limited financial statements prepared in accordance with IFRS, adjusted
by the Group for equity accounting purposes.
As at 6 April 2025 As at 3 March 2024
£m £m
Ocado Retail Limited
Current assets 270.6 261.7
Non-current assets 505.6 517.4
Current liabilities (327.5) (272.3)
Non-current liabilities (494.5) (491.2)
Net (liabilities)/assets (45.8) 15.6
4 March 2024 to 6 April 2025 27 February 2023 to 3 March 2024
£m £m
Revenue 3,091.9 2,470.3
Loss for the period (61.4) (133.7)
Total comprehensive loss (61.4) (133.7)
Reconciliation of the above summarised financial information to the carrying
amount of the interest in Ocado Retail Limited recognised in the consolidated
financial statements:
As at 29 March 2025 As at 30 March 2024
£m £m
Ocado Retail Limited
Net (liabilities)/assets (45.8) 15.6
Proportion of the Group's ownership interest (22.9) 7.8
Goodwill 449.1 449.1
Brand 223.1 229.7
Customer relationships 45.9 56.5
Other adjustments to align accounting policies (67.4) (71.7)
Acquisition costs 5.7 5.7
Impairment of investment (248.5) -
Carrying amount of the Group's interest in Ocado Retail Limited 385.0 677.1
In addition, the Group holds immaterial investments in joint ventures and
associates totaling £7.5m (last year: £7.1m). The Group's share of profit
totaled £0.4m (last year: £0.5m loss) and an impairment of £nil (last year:
£3.5m) was recognised.
18 Business combination
On 6 April 2025, in line with expectations, the Group obtained control of
Ocado Retail Limited. There was no change in economic interest of both
shareholders in Ocado Retail Limited, nor any consideration paid by the Group,
as a result of this change. For further details see note 17.
The Group has gained control of an investment previously accounted for as an
associate, which has been accounted for as a business combination using the
acquisition method of accounting, at the 'consolidation date', in accordance
with IFRS 3 Business Combinations and consequently the Ocado Retail Limited
assets acquired, and liabilities assumed, have been recorded by the Group at
fair value.
As at
6 April 2025
£m
Fair value of identifiable net assets (provisional)(1)
Intangible assets: brand 228.7
Intangible assets: customer relationships 55.0
Intangible assets: other 12.9
Property, plant and equipment - owned 234.8
Property, plant and equipment - right-of-use assets(2) 333.0
Inventories 85.7
Trade and other receivables(3) 116.7
Cash and cash equivalents 68.2
Trade and other payables (261.6)
Borrowings and other financial liabilities(2) (422.8)
Provisions (33.8)
Deferred tax liabilities (58.3)
358.5
Goodwill
Fair value of pre-existing interest in Ocado Retail Limited (see notes 3 and 385.0
17)
Fair value of identifiable net assets (358.5)
Non-controlling interest, based on their proportionate share of the acquired 179.3
net assets
Loss on settlement of pre-existing relationship (18.0)
Settlement of pre-existing relationship 106.1
293.9
(1) The fair value of the net assets acquired are provisional because the
consolidation date was close to the reporting date. The fair values will be
finalised within 12 months of the consolidation date.
(2) The Group measured the acquired lease liabilities using the present value
of the remaining lease payments at the date of acquisition. The right-of-use
assets were measured at an amount equal to the lease liabilities and adjusted
to reflect the favourable or unfavourable terms of the lease relative to
market terms.
(3) The fair value of trade and other receivables is considered equivalent to
the gross contractual amount and the Group expects to collect substantially
all of these.
Net cash inflow arising on acquisition relates to cash and cash equivalents
acquired.
The goodwill primarily reflects the value of future new customers. None of the
goodwill is expected to be deductible for tax purposes.
Settlement of pre-existing relationships
At the consolidation date, the Group and Ocado Retail Limited had two
pre-existing relationships: a long-term supply contract under which the Group
supplied Ocado Retail Limited with certain products at agreed contract rates;
and a shareholder loan provided by the Group to Ocado Retail Limited (see note
16).
These pre-existing relationships were effectively settled at the consolidation
date and were accounted for separately from the business combination under
IFRS 3. Any pre-existing balances were eliminated on consolidation, with the
balances derecognised from the Group's balance sheet and excluded from the
fair value of Ocado Retail Limited's net assets acquired.
The long-term supply contract was effectively terminated at the consolidation
date. The Group has attributed £18.0m of the notional consideration to the
settlement of that pre-existing relationship. The fair value of the settlement
has been determined based on an assessment of the difference between current
market rates and the rates previously agreed in the lower cost legacy supply
contract. The charge will be recognised within adjusting items.
19 Contingent assets
Previously, the Group was seeking damages from an independent third party
following their involvement in anti-competitive behaviour that adversely
impacted the Group. The Group expected to receive an amount from the claim
(either in settlement or from the legal proceedings), a position that was
reinforced by recent court judgments in similar claims. During the period, net
income of £20.5m was recognised in settlement of the damages action (see note
3).
20 Subsequent events
On 6 April 2025, Ocado Retail Limited became a subsidiary of the Group. See
notes 1, 17 and 18 for details.
On 22 April 2025, we announced that we had been managing a cyber incident. As
part of our proactive management of the incident, we made the decision to
pause taking orders via our UK & Ireland websites and apps and some
M&S International-operated websites.
In response to the events, we engaged external cyber security experts to
assist with investigating and managing the incident. The Group also engaged
with the relevant authorities, including reporting the incident to the
National Cyber Security Centre and the UK's Information Commissioner's Office
('ICO') as appropriate.
The incident has been treated as a non-adjusting post-balance sheet event and
there has been no impact on the financial results reported for the year ended
29 March 2025.
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.
Principal risks & uncertainties
The Board reviews and monitors the principal risks and uncertainties which
could have a material effect on the Group's results. The updated principal
risks and uncertainties for the FY25 year end are listed below. A fuller
disclosure of the risks, including the associated mitigating activities will
be set out in the Strategic Report of the 2024/25 Annual Report and Accounts.
An uncertain environment The business continues to operate in an uncertain environment, impacted by a
suite of potentially challenging factors which could individually, or in
aggregate, negatively impact our performance. Some of the factors we are
currently monitoring include the geo-political environment, cost pressures,
uncertainty in the financial markets, the impact of increased regulations,
supply chain disruption and changes in consumer behaviour.
Business transformation Ongoing business transformation is dependent on our ability to prioritise
capital spend and resources to accelerate and successfully implement the suite
of ongoing strategic projects. Delays or deferrals of transformation activity
could impact the delivery of our medium and longer term growth ambitions.
While each initiative is individually significant and has it's own set of
inherent risks, the aggregate impact of simultaneously delivering these
challenging projects creates further risks to successful implementation, such
as timeliness of delivery, cost management and the achievement of returns.
Business resilience A major operational or resilience failure at a key business location, such as
one of our distribution centres or sourcing locations, could result in
business interruption. More broadly, an inability to effectively respond to
large, disruptive external events like extreme weather or infrastructure
failures could also impact our performance.
Information security A significant or wide-reaching data breach or cyber incident, as we have
recently experienced, either directly, at a key investment or other third
parties, could result in a loss of information and operational disruption
impacting our customers, colleagues or the business, and a loss of confidence
in M&S. This would adversely impact our reputation, result in legal
exposure and cause business disruption if rapid remediation and reset is not
possible.
Joint Ventures, including Ocado Retail, and franchise The successful long-term performance of any joint venture is inherently
complex due to several factors, including the ownership and/or operational
structure and the need to align different perspectives.
Similarly, the success of our franchise operations is dependent on our ability
to work effectively with both domestic and international partners.
Culture, talent and capability The success of the business is dependent on being able to attract, retain and
develop the right talent, skills and capabilities. To do this we maintain a
clear focus on:
· driving a high performance culture;
· meeting the financial and wellbeing expectations of our colleagues;
· effectively managing labour cost pressures; and
· working collaboratively with our Business Involvement Group and unions.
Any shortfall in executing against these objectives could impact the delivery
of core operational activities and the longer-term strategy, including aspects
of our transformation programme.
Product safety and integrity A failure to prevent and/or effectively respond to a major food or product
safety incident, or to maintain product integrity, could impact customer
confidence in our brand and business performance.
Corporate compliance A failure to consistently deliver against an increasingly demanding set of
legal and regulatory obligations or broader corporate responsibility
commitments could undermine our reputation as a responsible retailer. The
consequences include a loss of trust by customers, investors and other
stakeholders, and/or legal exposure or regulatory sanctions which could
negatively impact our ability to operate and/or cause financial losses and
harm.
Climate change and the environment There is increasing focus and pressure from carbon-conscious stakeholders for
the business to operate in a more environmentally sound and sustainable
manner.
A failure to take appropriate action to reduce the environmental impact of our
business and progress towards our science-based targets, linked to our
directly controlled operations and externally within our supply chain, as well
as effectively managing the consequences of climate-related risks could impact
our brand, future trading performance and other business costs, including
financing.
Glossary and Alternative Performance Measures
The Group tracks a number of alternative performance measures in managing its
business, which are not defined or specified under the requirements of IFRS
because they exclude amounts that are included in, or include amounts that are
excluded from, the most directly comparable measure calculated and presented
in accordance with IFRS, or are calculated using financial measures that are
not calculated in accordance with IFRS.
The Group believes that these alternative performance measures, which are not
considered to be a substitute for or superior to IFRS measures, provide
stakeholders with additional helpful information on the performance of the
business. These alternative performance measures are consistent with how the
business performance is planned and reported within the internal management
reporting to the Board. Some of these alternative performance measures are
also used for the purpose of setting remuneration targets.
These alternative performance measures should be viewed as supplemental to,
but not as a substitute for, measures presented in the consolidated financial
information relating to the Group, which are prepared in accordance with IFRS.
The Group believes that these alternative performance measures are useful
indicators of its performance. However, they may not be comparable with
similarly titled measures reported by other companies due to differences in
the way they are calculated.
Alternative performance measure ("APM") Closest equivalent statutory measure Reconciling items to statutory measure Definition and purpose
Income statement measures
Sales(1) Revenue Consignment sales Sales include the gross value of consignment sales (excluding VAT). Where
third-party branded goods are sold on a consignment basis, only the commission
receivable is included in statutory revenue. This measure has been introduced
given the Group's focus on launching and growing third-party brands and is
consistent with how the business performance is reported and assessed by the
Board and the Executive Committee.
Fashion, Home & Beauty store / Fashion, Home & Beauty online sales(1) None Not applicable The growth in revenues on a year-on-year basis is a good indicator of the
performance of the stores and online channels.
2024/25 2023/24 %
£m
£m
UK & ROI Fashion, Home & Beauty
Store sales(1) 2,806.1 2,777.3 1.0
Consignment sales (16.9) (18.6)
Store revenue 2,789.2 2,758.7 1.1
Online sales(1) 1,429.2 1,314.1 8.8
Consignment sales (80.6) (50.6)
Online revenue 1,348.6 1,263.5 6.7
UK & ROI Fashion, Home & Beauty sales 4,235.3 4,091.4 3.5
Consignment sales (97.5) (69.2)
Total UK & ROI Fashion, Home & Beauty revenue 4,137.8 4,022.2 2.9
(1) UK and ROI Fashion, Home & Beauty store sales exclude revenue from
'shop your way' and Click & Collect, which are included in UK and ROI
Fashion, Home & Beauty online sales.
There is no material difference between sales and revenue for UK and ROI Food
and International.
Like-for-like sales growth(1) Movement in revenue per the income statement Revenue from non-like-for-like stores The period-on-period change in sales (excluding VAT) from stores which have
been trading and where there has been no significant change (greater than 10%)
Revenue from non-retail businesses Consignment sales in footage for at least 52 weeks and online sales. The measure is used widely
in the retail industry as an indicator of sales performance. It excludes the
impact of new stores, closed stores, stores with significant footage change
and non-retail businesses such as supply chain services.
2024/25 2023/24 %
£m
£m
UK & ROI Food
Like-for-like 8,609.1 7,924.1 8.6
Net new space(1) 411.9 374.7
Total UK & ROI Food sales 9,021.0 8,298.8 8.7
UK & ROI Fashion, Home & Beauty
Like-for-like 4,145.7 3,972.1 4.4
Net new space 89.6 119.3
Total UK & ROI Fashion, Home & Beauty sales 4,235.3 4,091.4 3.5
(1) UK and ROI Food net new space includes Gist third party revenue. ( )
M&S.com sales / online sales(1) None Not applicable Total sales through the Group's online platforms. These sales are reported
within the relevant UK and ROI Fashion, Home & Beauty, UK and ROI Food and
International segment results. The growth in sales on a year-on-year basis is
a good indicator of the performance of the online channel and is a measure
used within the Group's incentive plans. Refer to the Remuneration Report for
an explanation of why this measure is used within incentive plans.
Fashion, Home & Beauty Online sales excluding furniture(1) None Not applicable Total online sales for UK & ROI Fashion, Home & Beauty excluding the
furniture categories' sales. This measure has been introduced to enable a
comparable indicator of the performance of the online channel as it excludes
the impact of furniture sales following the Group's withdrawal from its
two-person furniture delivery operation (see note 3).
International online(1) None Not applicable International sales through International online platforms. These sales are
reported within the International segment results. The growth in sales on a
year-on-year basis is a good indicator of the performance of the online
channel. This measure has been introduced given the Group's focus on online
sales.
2024/25 2023/24 %
£m £m
International sales
Stores 566.6 600.5 (5.6)
Online 91.4 118.6 (22.9)
At reported currency 658.0 719.1 (8.5)
Sales growth at constant currency(1) None Not applicable The period-on-period change in sales retranslating the previous year sales at
the average actual periodic exchange rates used in the current financial year.
This measure is presented as a means of eliminating the effects of exchange
rate fluctuations on the period-on-period reported results.
2024/25 2023/24 %
£m £m
International sales
At constant currency 658.0 708.2 (7.1)
Impact of FX retranslation - 10.9
At reported currency 658.0 719.1 (8.5)
Adjusting items None Not applicable Those items which the Group excludes from its adjusted profit metrics in order
to present a further measure of the Group's performance. Each of these items,
costs or incomes, is considered to be significant in nature and/or quantum or
are consistent with items treated as adjusting in prior periods. Excluding
these items from profit metrics provides readers with helpful additional
information on the performance of the business across periods because it is
consistent with how the business performance is planned by, and reported to,
the Board and the Executive Committee.
Adjusted operating profit Operating profit Adjusting items Operating profit before the impact of adjusting items. The Group considers
this to be an important measure of Group performance and is consistent with
Operating profit before adjusting items (See note 3) how the business performance is reported and assessed by the Board and the
Executive Committee.
Adjusted operating margin None Not applicable Adjusted operating profit as a percentage of sales.
Operating margin before adjusting items
Finance income before adjusting items Finance income Adjusting items Finance income before the impact of adjusting items. The Group considers this
to be an important measure of Group performance and is consistent with how the
(See note 3) business performance is reported and assessed by the Board and the Executive
Committee.
Finance costs before adjusting items Finance costs Adjusting items Finance costs before the impact of adjusting items. The Group considers this
to be an important measure of Group performance and is consistent with how the
(See note 3) business performance is reported and assessed by the Board and the Executive
Committee.
Net interest payable on leases Finance income/costs Finance income/costs The net of interest income on subleases and interest payable on lease
liabilities. This measure has been introduced as it allows the Board and
(See note 4) Executive Committee to assess the impact of IFRS 16 Leases.
Net financial interest Finance income/costs Finance income/costs Calculated as net finance costs, excluding interest on leases and adjusting
items. The Group considers this to be an important measure of Group
(See note 4) performance and is consistent with how the business performance is reported
and assessed by the Board and the Executive Committee.
EBIT before adjusting items EBIT(2) Adjusting items Calculated as profit before the impact of adjusting items, net finance costs
and tax as disclosed on the face of the consolidated income statement. This
(See note 3) measure is used in calculating the return on capital employed for the Group.
Ocado Retail Limited Adjusted EBITDA EBIT(2) Not applicable Calculated as Ocado Retail Limited earnings before interest, taxation,
depreciation, amortisation, impairment and adjusting items.
Profit before tax and adjusting items Profit before tax Adjusting items Profit before the impact of adjusting items and tax. The Group considers this
to be an important measure of Group performance and is consistent with how the
(See note 3) business performance is reported and assessed by the Board and the Executive
Committee.
This is a measure used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used within
incentive plans.
Adjusted basic earnings per share Earnings per share Adjusting items Profit after tax attributable to owners of the parent and before the impact of
adjusting items, divided by the weighted average number of ordinary shares in
(See note 3) issue during the financial year.
This is a measure used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used.
Adjusted diluted earnings per share Diluted earnings per share Adjusting items Profit after tax attributable to owners of the parent and before the impact of
adjusting items, divided by the weighted average number of ordinary shares in
(See note 3) issue during the financial year adjusted for the effects of any potentially
dilutive options.
Effective tax rate before adjusting items Effective tax rate Adjusting items and their tax impact Total income tax charge for the Group excluding the tax impact of adjusting
items divided by the profit before tax and adjusting items. This measure is an
(See note 3) indicator of the ongoing tax rate for the Group.
Balance sheet measures
Net debt None Reconciliation of net debt (see note 15) Net debt comprises total borrowings (bank and bonds net of accrued interest
and lease liabilities), the spot foreign exchange component of net derivative
financial instruments that hedge the debt and the Scottish Limited Partnership
liability to the Marks and Spencer UK Pension Scheme less cash, cash
equivalents and unlisted and short-term investments. Net debt does not include
contingent consideration as it is conditional upon future events which are not
yet certain at the balance sheet date.
This measure is a good indication of the strength of the Group's balance sheet
position and is widely used by credit rating agencies.
Net funds/(debt) excluding lease liabilities None Reconciliation of net debt (see note 15) Calculated as net debt less lease liabilities. This measure is a good
indication of the strength of the Group's balance sheet position and is widely
Lease liabilities used by credit rating agencies.
Cash flow measures
Free cash flow from operations Operating profit See Financial Review Calculated as operating profit less adjusting items within operating profit,
depreciation and amortisation before adjusting items, cash lease payments
excluding lease surrenders, working capital, defined benefit scheme pension
funding, capex and disposals, financial interest, taxation, employee-related
share transactions, share of (profit)/loss from associate, adjusting items in
cash flow and loans to associates.
Free cash flow Operating profit See Financial Review Calculated as free cash flow from operations less acquisitions, investments
and divestments. This measure shows the cash generated by the Group during the
year that is available for returning to shareholders and is used within the
Group's incentive plans.
Free cash flow after shareholder returns Operating profit See Financial Review Calculated as free cash flow less dividends paid.
This measure shows the cash retained by the Group in the year.
Other measures
Capital expenditure None Not applicable Calculated as the purchase of property, plant and equipment, investment
property and intangible assets during the year, less proceeds from asset
disposals excluding any assets acquired or disposed of as part of a business
combination or through an investment in an associate.
Adjusted return on capital employed ("ROCE") None Not applicable Calculated as being adjusted operating profit divided by the average of
opening and closing capital employed. The measures used in this calculation
are set out below:
2024/25 2023/24
£m £m
Operating profit 624.3 714.2
Adjusting items included in operating profit (see note 3) 360.2 124.4
Adjusted operating profit 984.5 838.6
Net assets 2,951.4 2,830.1
Add back:
Partnership liability to the Marks & Spencer UK Pension Scheme - 88.8
Deferred tax liabilities 199.4 205.8
Non-current borrowings and other financial liabilities 2,588.7 2,882.8
Retirement benefit deficit 122.7 4.6
Current tax liabilities 1.2 1.5
Derivative financial instruments 34.4 34.4
Less:
Investment property (11.2) (11.6)
Retirement benefit assets - (81.8)
Current tax assets (71.1) (32.9)
Deferred tax assets (13.9) (11.7)
Net operating assets 5,801.6 5,910.0
Add back: Provisions related to adjusting items 141.6 130.6
Capital employed 5,943.2 6,040.6
Average capital employed 5,991.9 5,957.3
ROCE % 16.4% 14.1%
( )
This measure is used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used within
incentive plans.
(1) UK and ROI Fashion, Home & Beauty store sales exclude revenue from
'shop your way' and Click & Collect, which are included in UK and ROI
Fashion, Home & Beauty online sales.
There is no material difference between sales and revenue for UK and ROI Food
and International.
Like-for-like sales growth(1)
Movement in revenue per the income statement
Revenue from non-retail businesses
Revenue from non-like-for-like stores
Consignment sales
The period-on-period change in sales (excluding VAT) from stores which have
been trading and where there has been no significant change (greater than 10%)
in footage for at least 52 weeks and online sales. The measure is used widely
in the retail industry as an indicator of sales performance. It excludes the
impact of new stores, closed stores, stores with significant footage change
and non-retail businesses such as supply chain services.
2024/25 2023/24 %
£m
£m
UK & ROI Food
Like-for-like 8,609.1 7,924.1 8.6
Net new space(1) 411.9 374.7
Total UK & ROI Food sales 9,021.0 8,298.8 8.7
UK & ROI Fashion, Home & Beauty
Like-for-like 4,145.7 3,972.1 4.4
Net new space 89.6 119.3
Total UK & ROI Fashion, Home & Beauty sales 4,235.3 4,091.4 3.5
(1) UK and ROI Food net new space includes Gist third party revenue. ( )
M&S.com sales / online sales(1)
None
Not applicable
Total sales through the Group's online platforms. These sales are reported
within the relevant UK and ROI Fashion, Home & Beauty, UK and ROI Food and
International segment results. The growth in sales on a year-on-year basis is
a good indicator of the performance of the online channel and is a measure
used within the Group's incentive plans. Refer to the Remuneration Report for
an explanation of why this measure is used within incentive plans.
Fashion, Home & Beauty Online sales excluding furniture(1)
None
Not applicable
Total online sales for UK & ROI Fashion, Home & Beauty excluding the
furniture categories' sales. This measure has been introduced to enable a
comparable indicator of the performance of the online channel as it excludes
the impact of furniture sales following the Group's withdrawal from its
two-person furniture delivery operation (see note 3).
International online(1)
None
Not applicable
International sales through International online platforms. These sales are
reported within the International segment results. The growth in sales on a
year-on-year basis is a good indicator of the performance of the online
channel. This measure has been introduced given the Group's focus on online
sales.
2024/25 2023/24 %
£m £m
International sales
Stores 566.6 600.5 (5.6)
Online 91.4 118.6 (22.9)
At reported currency 658.0 719.1 (8.5)
Sales growth at constant currency(1)
None
Not applicable
The period-on-period change in sales retranslating the previous year sales at
the average actual periodic exchange rates used in the current financial year.
This measure is presented as a means of eliminating the effects of exchange
rate fluctuations on the period-on-period reported results.
2024/25 2023/24 %
£m £m
International sales
At constant currency 658.0 708.2 (7.1)
Impact of FX retranslation - 10.9
At reported currency 658.0 719.1 (8.5)
Adjusting items
None
Not applicable
Those items which the Group excludes from its adjusted profit metrics in order
to present a further measure of the Group's performance. Each of these items,
costs or incomes, is considered to be significant in nature and/or quantum or
are consistent with items treated as adjusting in prior periods. Excluding
these items from profit metrics provides readers with helpful additional
information on the performance of the business across periods because it is
consistent with how the business performance is planned by, and reported to,
the Board and the Executive Committee.
Adjusted operating profit
Operating profit before adjusting items
Operating profit
Adjusting items
(See note 3)
Operating profit before the impact of adjusting items. The Group considers
this to be an important measure of Group performance and is consistent with
how the business performance is reported and assessed by the Board and the
Executive Committee.
Adjusted operating margin
Operating margin before adjusting items
None
Not applicable
Adjusted operating profit as a percentage of sales.
Finance income before adjusting items
Finance income
Adjusting items
(See note 3)
Finance income before the impact of adjusting items. The Group considers this
to be an important measure of Group performance and is consistent with how the
business performance is reported and assessed by the Board and the Executive
Committee.
Finance costs before adjusting items
Finance costs
Adjusting items
(See note 3)
Finance costs before the impact of adjusting items. The Group considers this
to be an important measure of Group performance and is consistent with how the
business performance is reported and assessed by the Board and the Executive
Committee.
Net interest payable on leases
Finance income/costs
Finance income/costs
(See note 4)
The net of interest income on subleases and interest payable on lease
liabilities. This measure has been introduced as it allows the Board and
Executive Committee to assess the impact of IFRS 16 Leases.
Net financial interest
Finance income/costs
Finance income/costs
(See note 4)
Calculated as net finance costs, excluding interest on leases and adjusting
items. The Group considers this to be an important measure of Group
performance and is consistent with how the business performance is reported
and assessed by the Board and the Executive Committee.
EBIT before adjusting items
EBIT(2)
Adjusting items
(See note 3)
Calculated as profit before the impact of adjusting items, net finance costs
and tax as disclosed on the face of the consolidated income statement. This
measure is used in calculating the return on capital employed for the Group.
Ocado Retail Limited Adjusted EBITDA
EBIT(2)
Not applicable
Calculated as Ocado Retail Limited earnings before interest, taxation,
depreciation, amortisation, impairment and adjusting items.
Profit before tax and adjusting items
Profit before tax
Adjusting items
(See note 3)
Profit before the impact of adjusting items and tax. The Group considers this
to be an important measure of Group performance and is consistent with how the
business performance is reported and assessed by the Board and the Executive
Committee.
This is a measure used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used within
incentive plans.
Adjusted basic earnings per share
Earnings per share
Adjusting items
(See note 3)
Profit after tax attributable to owners of the parent and before the impact of
adjusting items, divided by the weighted average number of ordinary shares in
issue during the financial year.
This is a measure used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used.
Adjusted diluted earnings per share
Diluted earnings per share
Adjusting items
(See note 3)
Profit after tax attributable to owners of the parent and before the impact of
adjusting items, divided by the weighted average number of ordinary shares in
issue during the financial year adjusted for the effects of any potentially
dilutive options.
Effective tax rate before adjusting items
Effective tax rate
Adjusting items and their tax impact
(See note 3)
Total income tax charge for the Group excluding the tax impact of adjusting
items divided by the profit before tax and adjusting items. This measure is an
indicator of the ongoing tax rate for the Group.
Balance sheet measures
Net debt
None
Reconciliation of net debt (see note 15)
Net debt comprises total borrowings (bank and bonds net of accrued interest
and lease liabilities), the spot foreign exchange component of net derivative
financial instruments that hedge the debt and the Scottish Limited Partnership
liability to the Marks and Spencer UK Pension Scheme less cash, cash
equivalents and unlisted and short-term investments. Net debt does not include
contingent consideration as it is conditional upon future events which are not
yet certain at the balance sheet date.
This measure is a good indication of the strength of the Group's balance sheet
position and is widely used by credit rating agencies.
Net funds/(debt) excluding lease liabilities
None
Reconciliation of net debt (see note 15)
Lease liabilities
Calculated as net debt less lease liabilities. This measure is a good
indication of the strength of the Group's balance sheet position and is widely
used by credit rating agencies.
Cash flow measures
Free cash flow from operations
Operating profit
See Financial Review
Calculated as operating profit less adjusting items within operating profit,
depreciation and amortisation before adjusting items, cash lease payments
excluding lease surrenders, working capital, defined benefit scheme pension
funding, capex and disposals, financial interest, taxation, employee-related
share transactions, share of (profit)/loss from associate, adjusting items in
cash flow and loans to associates.
Free cash flow
Operating profit
See Financial Review
Calculated as free cash flow from operations less acquisitions, investments
and divestments. This measure shows the cash generated by the Group during the
year that is available for returning to shareholders and is used within the
Group's incentive plans.
Free cash flow after shareholder returns
Operating profit
See Financial Review
Calculated as free cash flow less dividends paid.
This measure shows the cash retained by the Group in the year.
Other measures
Capital expenditure
None
Not applicable
Calculated as the purchase of property, plant and equipment, investment
property and intangible assets during the year, less proceeds from asset
disposals excluding any assets acquired or disposed of as part of a business
combination or through an investment in an associate.
Adjusted return on capital employed ("ROCE")
None
Not applicable
Calculated as being adjusted operating profit divided by the average of
opening and closing capital employed. The measures used in this calculation
are set out below:
2024/25 2023/24
£m £m
Operating profit 624.3 714.2
Adjusting items included in operating profit (see note 3) 360.2 124.4
Adjusted operating profit 984.5 838.6
Net assets 2,951.4 2,830.1
Add back:
Partnership liability to the Marks & Spencer UK Pension Scheme - 88.8
Deferred tax liabilities 199.4 205.8
Non-current borrowings and other financial liabilities 2,588.7 2,882.8
Retirement benefit deficit 122.7 4.6
Current tax liabilities 1.2 1.5
Derivative financial instruments 34.4 34.4
Less:
Investment property (11.2) (11.6)
Retirement benefit assets - (81.8)
Current tax assets (71.1) (32.9)
Deferred tax assets (13.9) (11.7)
Net operating assets 5,801.6 5,910.0
Add back: Provisions related to adjusting items 141.6 130.6
Capital employed 5,943.2 6,040.6
Average capital employed 5,991.9 5,957.3
ROCE % 16.4% 14.1%
( )
This measure is used within the Group's incentive plans. Refer to the
Remuneration Report for an explanation of why this measure is used within
incentive plans.
(1) The segments have been restated as the Group no longer includes the
Republic of Ireland within the International segment and instead includes the
Republic of Ireland within the Fashion, Home & Beauty and Food segments.
(2) EBIT is not defined within IFRS but is a widely accepted profit measure
being earnings before interest and tax.
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