Marc Bolland

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Marks & Spencer (MKS) CEO Marc Bolland has praised the performance of the retailer’s food business as the high street bellwether posted a 6.1% rise in underlying pre-tax profits to £661.2m – the first rise in the bottom line for four years.

Bolland said it was an “outstanding year” for food in a difficult market as sales climbed 3.4% – and up 0.6% on a like-for-like basis. Despite the competition intensifying through the period, M&S said it outperformed the market by 3.5% pts and had now delivered 22 consecutive quarters of like-for-like growth.

Group sales in the year ended 28 March nudged up 0.4% to £10.3bn, with statutory pre-tax profits rising 3.4% to £600m. M&S also revealed a share buyback programme of £150m for 2015/16.

“We are transforming M&S into a stronger, more agile business – putting the right infrastructure, capabilities and talent in place to drive our strategic priorities,” Bolland said.

However, the growth in the bottom line has come at a big cost for M&S, which has spent £3.2bn on putting in that “right infrastructure” as it upgraded its website, IT systems and distribution network.

And general merchandise sales for the year were also below expectations, falling 2.5% with like-for-like numbers also down 3.1%.

Shares in M&S fell 1.3% on opening to 578p, with the rise in profits already factored into the price earlier in the week.

Morning update

Britvic (BVIC) chief financial officer John Gibney has decided to retire from the drinks company in April next year, leading the Robinsons producer to initiate a recruitment process for his successor. Gibney joined Britvic in 1999, having previously held a number of senior roles across Bass. CEO Simon Litherland said: “John has made an outstanding contribution to the business over a significant length of time, helping to create the Britvic of today. He played a crucial role in the flotation of the business in 2005, has successfully overseen the acquisitions we have made, and helped to create the strong balance sheet we enjoy today. I am delighted that he will continue to play an active role in the business and I look forward to continuing to work together with him to deliver our strategy.”

The news comes as the business reports its first half results, with revenue slipping 3% to £650.3m in the six months to 12 April. However, Britvic managed to improve pre-tax profits by 12.6% to £51m as it kept a tight hold over costs. Shares in the group fell 2.2% to 749p on the back of the news.

“Despite the challenging market conditions we have delivered double-digit earnings growth, continued to improve our margin and further reduced debt,” Litherland added. “Importantly we continued to increase A&P investment behind our brands, our innovation and marketing capability and in our international business unit, to drive future revenue and profit growth.

“We have made significant progress executing our strategy which will continue to create sustainable value for shareholders. Whilst we expect trading conditions to remain challenging, guidance for the current year is unchanged.”

Listed fresh produce group Total Produce has increased its full year adjusted earnings per share target into the upper half of the previously announced range of between 9.20 cent and 10.20 cent. It came as the business said in an update that trading for the first four months had been “satisfactory”. “Total Produce is in a strong financial position and continues to pursue attractive acquisition opportunities to further expand the group,” the company added. Since the year end, Total Produce completed the acquisition of a 50% shareholding in the Gambles Group based in Toronto.

Real Good Food said in a statement to the stock exchange that it had now completed the sale of sugar business Napier Brown to Tereos following approval at an extraordinary general meeting.

Yesterday in the City

Inflation officially falling into negative territory for the first time in 55 years did not perturb the market too much yesterday, with the FTSE 100 rising by 0.4% to 6,995.1pts after the -0.1% deflation figure was confirmed.

Coca-Cola HBC (CCH) was the biggest FTSE 100 riser yesterday after broker Numura upgraded its target price for the Coke’s European bottler. CCH was up 4.3% to 1,480p yesterday, at one point hitting a year-long high of 1,497p. The shares are now up 20% since the start of the year.

Most major consumer goods companies edged up yesterday, though Tesco (TSCO) was flat at 222p and Sainsbury’s (SBRY) fell 0.6% to 264.6p after Asda’s poor first quarter like-for-likes were revealed.

Elsewhere, Greencore (GNC)was up 1.2% to 352.9p after posting first half revenue growth of 3.9% on a like-for-like basis.

Premier Foods (PFD) fell 1.4% to 46.3p despite the supplier posting its fourth successive quarter of improving sales – though overall full-year revenues still fell be 4.5%.

Thorntons’ (THT) share price boost on Monday from its departing CEO proved short-lived down as it fell back 2.7% to 96p yesterday.