MIDAS SHARE TIPS UPDATE: High Street stalwart Marks & Spencer returns to top form
When Steve Rowe became boss of Marks & Spencer in 2016, the share price was almost £4. It fell steadily until 2020, when the pandemic sent it to below 90p. Today, the stock is £2.37.
The rebound follows better than expected half-year figures, released last week. Rowe said he expected underlying profits of about £500million, a tenfold increase on last year and a 20 per cent rise on 2020 figures.
The forecast, coupled with details of a strong performance in food and a marked improvement in clothing and homewear, was interpreted in the City as a clear sign that the M&S tanker is finally changing course.
Looking up: Marks & Spencer clothing sales have improved
Food sales have been bolstered by a focus on popular ranges, such as wine and ready meals, and the joint venture with online supermarket Ocado is bringing home the bacon.
The online business is also making strides, some 13 million shoppers now use the Sparks card and the new M&S app has three million customers.
All this tech provides M&S with reams of valuable data. Using it well should propel future growth.
Midas verdict: In June 2019, when M&S launched a £600million rights issue, Midas recommended that all but the most diehard fans bail out of the stock. At the time, the shares were £2.25. They are now just 12p higher and there have been no dividends since November 2019. But Rowe is trying his utmost to turn M&S into a 21st century multi-channel success story and may be on the cusp of achieving it Shareholders who kept the faith two years ago should hang on in there. And there is even a case for adventurous new investors to pick up a few shares.
Traded on: Main market Ticker: MKS Contact: corporate.marksandspencer.com or Equiniti on 0345 609 0810