Marks & Spencer recognise £9m Irish impairment charge

MARKS & Spencer, the UK-based retailer with 19 stores across Ireland, has recognised a £9m (€10m) impairment charge in Ireland as a result of testing.

For its Irish stores, Marks & Spencer also said a reduction in sales of 5pc from the threeyear plan in years two and three, to reflect a potential recession, would result in an increase of the impairment charge of £6.5m (€7.2m).

In its results, published earlier this month, the retailer said it tested other changes and key assumptions.

These include a 20 basis point reduction in gross profit margin throughout the plan period, a 50 basis point increase in the discount rate or a 1pc fall in sales combined with a 10 basis point fall in gross profit margin, stating that these would not result in a “significant increase to the impairment charge”.

In a call with analysts, David Wayne Surdeau, the interim chief financial officer of Marks & Spencer, said in its owned business, “the full-year sales decline was driven by Ireland”.

He added new store openings in India had partially offset this.

A spokeswoman for Marks & Spencer declined to comment further.

The London-listed retailer said it would accelerate its latest turnaround programme as it dealt with the fallout from the coronavirus crisis and a 21pc fall in its annual profit.

Marks & Spencer made a pre-tax profit before one-off items of £403m (€448m) in its year to March 28, down from £512m (€569m) in 2018-19.