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M&S to scrap trading update at AGM amid turnaround plan

New chairman Archie Norman reportedly wants to take a broader view of M&S as it undergoes a restructuring

M&S
M&S holds its AGM on Tuesday at the Wembley Stadium in London

Marks and Spencer Group Plc (LON:MKS) has decided to scrap its usual trading update at Tuesday’s annual general meeting.

The AGM will be the first under new chairman, Archie Norman, and he reportedly wants to take a broader view of the struggling business.

Norman started as chairman last September to help lead a turnaround of M&S following sluggish sales in its ailing clothing divisions.

M&S is to close 100 stores by 2022 as part of a plan to move a third of its sales online in response to declining footfall.

The company last updated the market when it reported its full year results in May.

READ: M&S profits plunge on store closure costs but shares bounce higher as results beat forecasts

At the time, it said it would issue its next trading update through the AGM but this is no longer the case.

M&S stock 'in the doldrums', says ShoreCap

Shore Capital analyst Clive Black said it was "relatively unusual" for a company not to provide a trading statement at its AGM but M&S is not required to do so.

He added: “From a trading perspective it is clear that the UK high street has been somewhat volatile and more challenging than not with a cold spring followed by a warm early summer.”

Black said share gains should not be expected given that the clothing business is absorbing the store closure programme. The food business is also currently undergoing a review after a slowdown in sales.

M&S to benefit from warm weather and World Cup

M&S, however, should benefit from warm weather and the World Cup celebrations, Black said.

ShoreCap forecasts pre-tax profit of £544mln in 2019, compared to the current consensus estimate of £547mln. 

“The stock is in the doldrums through the extensive work programmes currently underway albeit yield support through its attractive present dividend stream is a source of downside support,” Black said.

“Supporters of management and strategy are going to have to be patient in our view.”

M&S holds its AGM at the Wembley Stadium in London at 11am.

Quick facts: Marks and Spencer Group PLC

Price: 184.55 GBX

LSE:MKS
Market: LSE
Market Cap: £3.6 billion
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