Marks and Spencer Group PLC (LSE:MKS) reported stronger first-half profits than expected, after the retailer quickly settled its insurance claim at £100 million for the cyber attack that laid it low in the spring.
The FTSE 100-listed group generated an adjusted pre-tax profit of £184.1 million in the 26 weeks to 27 September, down from £413.1 million last year as the cyber incident led to some empty shelves as systems were taken offline to thwart attackers.
Despite the attack, group sales jumped 22% to £7.97 billion.
Food sales, which increased 7.8% and generated an adjusted operating profit of £89.1 million as margins declined to 2.0% from 5.1%. In current trading, margins were said to now be almost back to normal.
Fashion, Home & Beauty sales declined 16.4%, but still made a profit from that division at £46.1 million despite margins falling to 2.7% from 12%.
The recovery in this arm has been slower, the M&S said, "as systems complexity means it has taken time to smooth the flow of stock".
International sales also fell, down 11.6% with profit at £13.3 million, while Ocado Retail posted a £3.1 million operating loss before adjustments.
The cyber incident led to £101.6 million in related costs.
Reflecting the recovery, the board increased the interim dividend 20% to 1.2p.
“The first half of this year was an extraordinary moment in time for M&S,” said chief executive Stuart Machin. “In the second half, we expect profit to be at least in line with last year.”
In the face of the disruption, he hailed further progress on the “Reshape for Growth” strategy, including a £340 million investment in its food supply chain and opening six new stores in the first half. A further 12 are planned before the end of the financial year.
Machin added: “Our plan to reshape M&S for long-term sustainable growth is unchanged, our ambitions are undimmed, and our determination to knuckle down and deliver is stronger than ever.”