Marks & Spencer profits more than halve after cyber-attack
Profits at Marks & Spencer have more than halved after a damaging cyber-attack that is still affecting its struggling clothing and homeware business.The retailer said underlying profits fell to £184.1m in the six months to 27 September, from £413.1m a year before, after it had to halt online orders of clothing and homewares for more than six weeks.Clothing and homeware sales were down 16.
4% in the half-year.The retailer said the division had been “slower” to recover from the hack than its food arm.M&S said in-store fashion sales had been “impacted by reduced availability and fewer visits linked to the absence of click and collect”, but added that warehouse systems were now restored.“Both our website and stores are improving availability, and trading is recovering,” it said.Food sales rose by a slightly better than expected 7.
8% in the half-year and the retailer said it had “largely recovered” from the effects of the attack.Group sales rose 22% to £7.96bn.“We are confident we will be recovered and back on track by the financial year-end [in March],” it said in a statement.M&S said profits had been helped by a quick recovery of £100m in cyber-insurance but hit by £50m on new packaging recycling levy and additional insurance costs.
The retailer is hoping to make £600m in cost savings this year as it battles to keep annual profits steady – £100m more than previously planned.The company recorded almost £102m in one-off costs related to the cyber-incident, such as legal and professional support and recovery costs, in the first half of the year and said it expected a further £34m in the second half – more than analysts had expected.Despite the cost-cutting, M&S opened six stores in the six months to the end of September and plans 12 more by March.Stuart Machin, the chief executive of M&S, said: “In the second half, we expect profit to be at least in line with last year.This should give us a springboard into the new financial year and set M&S up for further growth.
“The retail sector is facing significant headwinds – in the first half, cost increases from new taxes were over £50m – but there is much within our control and accelerating our cost-reduction programme will help to mitigate this,“Our plan to reshape M&S for long-term sustainable growth is unchanged, our ambitions are undimmed, and our determination to knuckle down and deliver is stronger than ever,”Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionLast week, M&S’s rival Next raised hopes that UK consumers were still willing to spend despite pressures on household budgets, as it revealed sales and profit growth “materially above” expectations,M&S said in May it expected an estimated £300m hit to profits this year from the cyber-attack,However, it said it expected to halve that financial impact of the attack to about £150m through insurance, cost reductions and other actions.
The attack on M&S’s IT systems over the Easter weekend forced the retailer to stop orders via its website, through which it sells fashion, homeware and gifts, for more than six weeks.Deliveries of food and fashion into stores and some deliveries to its online food partner, Ocado, were also disrupted.
Starmer was briefed on Mandelson’s Epstein links before appointing him, say civil servants
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Nigel Farage will promise a bonfire of business regulation as he spells out his party’s economic policies in more detail than ever in an attempt to bolster its reputation for fiscal credibility.The Reform leader will give a speech in London putting deregulation at the heart of his economic agenda, while also dropping a commitment made at the last election to deliver £90bn of tax cuts.The message is designed to bolster his party’s reputation for fiscal credibility after experts warned that his promises to cut £350bn from government spending over the next parliament did not add up.Farage will say: “When it comes to Brexit … we have not taken advantage of the opportunities to deregulate and become more competitive. The harsh truth is that regulations and regulators, in many areas, are worse than they were back in 2016
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