The company warns of uncertainty following last week’s UK budget. — Bloomberg
LONDON: Marks & Spencer Group Plc (M&S) has reported a strong rise in profit in its first half, while warning of uncertainty following last week’s UK budget.
The clothing and homeware group said profit before tax and adjusting items rose more than 17% to £408mil (US$525mil) in a statement yesterday. The result beats estimates of £360mil, according to a Bloomberg survey of analysts.
Chancellor of the Exchequer Rachel Reeves’ more than £40bil of annual tax increases threatens to put pressure on supermarkets’ already thin margins and trigger a rebound in inflation.
Her budget also lowered the threshold at which businesses start to pay national insurance contributions, a payroll tax, affecting retailers that tend to employ a lot of part-time staff.
“The recent budget’s long-term impact on M&S, our suppliers, and our customers is for now uncertain,” said chief executive officer Stuart Machin.
Cost inflation has stayed elevated during the first half, M&S said, warning that it expects the economic environment to persist. M&S’s performance points to tentative signs of a reversal in weak fashion spending. — Bloomberg
