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www.marksandspencer.com/annualreport2007 MARKS AND SPENCER GROUP PLC 3
2006/07 was a good
year for M&S with strong
growth across the
business. Our challenge
is to sustain this
performance in the face
of fierce competition and
fast-changing consumer
trends.
Your dividend
18.3 p
Total dividend
6.3p
Half year dividend
12 . 0 p
Final dividend
Chairman’s foreword
Last year, in my first year as your Chairman, we made good progress and
were able to begin to talk realistically about recovery. But we know this is
just the start and no-one underestimates the effort now needed to achieve
sustainable growth in a highly competitive retail sector.
Stuart and his team remain focused on getting the basics right as they look
to expand the business. That means remaining true to our values – quality,
value, service, innovation and trust – and constantly improving product,
service and our stores, whilst controlling costs. This attention to detail lies
behind our much improved results in 2006/07, our higher share price and
a 28.7% increase in earnings per share to 40.4p (last year 31.4p). On the
strength of these results, we propose a record final dividend of 12.0p, up 30.4%.
Our new funding arrangement for the defined benefit pension scheme deficit
uses part of our property portfolio to secure payments over the next 15
years. This has put an already good scheme on a sustainable, safer footing,
balancing the interests of pension scheme members and investors.
Plan A, our ‘eco plan’, illustrates a different kind of sustainability and builds
directly on our strengths as an ethical company. In keeping with Plan A, this
report is produced by carbon neutral printers on 100% recycled paper. At
the Annual General Meeting (AGM), we are proposing that we use our
website as the main way to communicate with shareholders, sending out
reports only to those who tell us they want a paper copy.
Good governance remains a priority. We have a Board with the right blend of
skills to support and challenge the executive team. Martha Lane Fox joined
as a non-executive director on 1 June 2007, bringing considerable business
experience as well as knowledge of the online sector. Jack Keenan is retiring
after the AGM. I would like to thank him for his contribution to M&S during
the past six years. The executive management changes, which Stuart
describes in his review, provide us with an effective structure to take us
onto the next stage of our growth.
Our remuneration policy – set out on page 44 – is closely tied to shareholder
interests. The way we reward our executive team for their leadership is
primarily focused on long-term growth in earnings. We believe in sharing the
benefits of success widely and, once again, have awarded all staff a bonus
to thank them for their hard work.
The prospects for M&S are good. We are well placed to meet the challenges
we face and achieve our goal of long-term growth.
Thank you for your continued support. I look forward to seeing many of you
at our AGM on the 10 July at Earls Court in London.
Lord Burns
Chairman
Executive Team Your Board Financial
Review Governance Financials
Shareholder
Information