Marks and Spencer 2007 Annual Report Download - page 9

Since the summer of 2004, M&S has gone from being
a retailer struggling to hold its own to one that, last
year, was once again setting the pace in a fiercely
competitive market.
We’ve achieved that change by following a simple, but rigorous
plan. It has been about getting three basic elements right –
our products, the service we offer our customers, and the look
and feel of our stores.
This will remain our focus as we continue to drive further
improvements in the core business. At the same time, we have
begun to look at new opportunities for growth.
M&S has always done best when it has stuck closely to its
traditional values – quality, value, service, innovation and trust.
They capture just what our customers look to us for – high
quality, great value products, sourced and made responsibly
and sold through stores which are enjoyable to shop in and
which offer excellent customer service.
We are in no way complacent about the results we have
achieved to date. We know that we still have much to do.
Performance
Our results last year show that we have made real progress.
UK sales rose by 9.7% to £7.98bn (last year £7.27bn). Food
sales grew by 9.7%. General merchandise grew by 9.6% with
clothing up 9.2% and home up 13.1%. Group operating margins
grew to 12.2%, up from 11.0% last year. Group profit before tax
rose by 28.5% to £965.2m (last year £751.4m).
These results were achieved in a challenging economic
environment, where interest rate rises, higher household bills
and personal debt were beginning to dent consumer
confidence.
Competition is fierce, with retailers constantly looking to
improve their offer, while also extending their reach through
aggressive growth of their store portfolios.
Customers are ever more demanding and informed. They want us
to provide great value with no compromise on quality or innovation.
Increasingly, they also want to know that we are doing this
responsibly, addressing key ethical and environmental issues.
Against this backdrop our results were all the more
encouraging. We were one of the few retailers to experience
strong growth in market share during the year.
We saw increases in market share, both by value and volume,
in all categories during the year. Our share of the UK clothing
and footwear market went up from 10.4% to 11.1% and in food
our share ended the year on a new high of 4.3%, up from 4.1%.
On average, we had 15.8 million visitors to our stores each
week and we successfully encouraged shoppers to buy more
each time they visited.
Our TV, newspaper and billboard advertising campaigns are
allowing us to project our brand, one of our most valuable
assets, with much greater impact. The key to good marketing is
www.marksandspencer.com/annualreport2007 MARKS AND SPENCER GROUP PLC 7
CREATING SHAREHOLDER VALUE
Stuart Rose
May
06 Jun 06 Jul 06
Aug
06
Sep
06 Oct 06 Nov 06 Dec 06 Jan 06 Feb 06 Mar 07
Apr
07 May 07
Share price performance
* TSR is the value of £100 invested in M&S shares on 30 March 2002
compared to £100 invested in the FTSE 100 over the same period.
■FTSE100 (£) ■M&S (£)
■Marks & Spencer ■FTSE 100 ■General Retailers
Adjusted earnings per
share (EPS) Total shareholder return (TSR)*
2004/05 2005/06 2006/07 2004/05 2005/06 2006/07
19.2p
31.4p
40.4p
£103.3
£129.6
£164.4
£141.7
£205.1
£98.5
Executive Team Your Board Financial
Review Governance Financials
Shareholder Information