Marks and Spencer Group Plc (LON:MKS) has reported a significant increase in its half-year statutory pre-tax profit for 2023, rising to £325.6m from £208.5m year-on-year. The company's earnings per share (EPS) also saw an uptick, climbing to 10p from the previous 8.3p, and adjusted EPS increased to 12p from 7.7p.
The group's sales surged to £6.16bn, marking a 10.8% increase from the previous year. This growth was driven by a 14.7% rise in Food sales, a 5.7% increase in Clothing & Home sales, and a 3% increase in International sales. The company's statutory revenue followed suit, also rising by 10.8% to reach £6.13bn.
Profit before tax and adjusting items reached £360.2m, up from £205.5m the previous year, reflecting the company's strong performance.
Looking ahead to the second half of the fiscal year, Marks and Spencer intends to invest further in its restructuring efforts. However, profit forecasts for this period are expected to lean more towards the first half due to challenging comparatives.
In a move likely to be welcomed by shareholders, Marks and Spencer has reinstated an interim dividend of 1p per share, which is due on January 12, 2024. This follows a period of strong financial performance by the company.
The latest financial results underscore Marks and Spencer's ongoing efforts to reshape its business model and deliver sustainable growth. The company has made significant strides in improving its performance across various segments, with Food, Clothing & Home, and International sales all contributing to the overall increase in group sales.
InvestingPro Insights
Drawing from the real-time data from InvestingPro, Marks and Spencer Group Plc has a P/E Ratio (Adjusted) of 5.37 as of Q3 2023, indicating a relatively low valuation compared to its earnings. The company's PEG Ratio stands at a low 0.09, suggesting it may be undervalued given its earnings growth. Furthermore, the company's revenue has grown by 27.49% over the last twelve months as of Q3 2023, reaching $510.9M USD.
In terms of InvestingPro Tips, MKS has high earnings quality, with free cash flow exceeding net income. The company has also been consistently increasing its earnings per share, which aligns with the reported uptick in the article. However, it's worth noting that MKS's revenue growth has been slowing down recently. This could be a point of concern for investors, despite the positive earnings figures.
For those interested in more insights, InvestingPro offers a total of 12 tips for MKS, providing a comprehensive analysis of the company's financial health and market performance.
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