M&S shares surge as dividend returns

SHARES in Marks & Spencer soared yesterday as it posted bumper revenues and profits and reinstated its dividend after a four-year break.

In an update that led one analyst to declare that ‘Brits have fallen back in love with M&S’, the company reported a 56pc rise in half-year profits to £325.6m following a 10.8pc rise in sales to £6.1bn.

the High Street favourite also said it would pay an interim dividend of 1p a share, its first since 2019 before Covid struck.

With chief executive Stuart Machin declaring there was ‘lots done, lots to do and lots of opportunity ahead of us’, M&S shares rose 8.4pc, or 19p, to 244.1p.

that was the highest level since January 2022 and took gains for 2023 so far to 98pc – meaning its value has all but doubled this year. the recovery saw it return to the FtSe 100 in September after a four-year absence.

M&S is the second-best performing stock in the blue chip index this year behind Rolls-Royce, whose shares rose another 2.8pc, or 6.4p, yesterday to take gains for 2023 to 149pc. the latest rise in the Rolls share price – to its highest level since February 2020 – was sparked by an upgrade from Morgan Stanley.

Analysts at the US investment bank said the engine maker firm would outperform its peers and set a 275p price target, up from 166p. the renewed faith in M&S and Rolls represents a remarkable turnaround in fortunes for both. Alongside chairman Archie norman, Machin has been building on the work of predecessor Steve Rowe to rid M&S clothes of their dowdy image. Robyn Duffy, a senior analyst at RSM Uk, said ‘Brits have fallen back in love with M&S’.

Meanwhile, Rolls shares have soared since chief executive tufan erginbilgiç took over at the start of this year, declaring the company was a ‘burning platform’ in desperate need of transformation.

Russ Mould, investment director at AJ Bell, said Rolls ‘has come a long way in short period of time’ while ‘M&S is a turnaround story that continues to surprise the sceptics by turning around’.

He added: ‘More earnings upgrades are likely, even if management is sensibly trying to keep a lid on expectations.’