British clothing-to-food retailer Marks & Spencer posted mixed annual profits and sagging sales on Wednesday, weighed down by challenging market conditions and an
ongoing overhaul.
Bottom-line profit after taxation jumped by almost a third to £33.5 million (38 million euros, $43 million) in the group's financial year to March 31, M&S said in a statement.
Marks and Spencer is in the process of shutting more than 100 underperforming stores by 2022, in a restructuring launched a year ago.
"We are deep into the first phase of our transformation programme and continue to make good progress," said chief executive Steve Rowe in the earnings release on Wednesday.
"We remain on track with our transformation and are now well on the road to making M&S special again," he added.
The group also announced on Wednesday a £601-million rights issue, or sale of new shares, to fund its new joint venture with online supermarket Ocado to deliver M&S food direct to homes.
M&S, which already sells its clothing online, revealed in February that it will buy 50 percent of Ocado's UK retail business.
The company's branded food products will be sold online by September 2020 following the termination of Ocado's current such deal with UK supermarket group Waitrose.
In early morning deals, M&S shares sank 3.6 percent to 261.40 pence on London's benchmark FTSE 100 index, which was 0.41 percent higher overall.
"The results give proof, if it were needed, that M&S required a significant shot in the arm to give it relevance in the modern day," noted analyst Richard Hunter at online brokerage Interactive Investor.
"Unappealing and older stores have long been a drag on both revenues and indeed the company's image."