M&S CEO Steve Rowe

Marks & Spencer (MKS) is teetering on the brink of expulsion from the FTSE 100 after its shares plunged to a decade-long low following its annual results on Wednesday.

The retail bellwether slumped 9.4% back to 245.8p on Wednesday - wiping off more than £400m from its market cap. It dropped further back on Thursday to set a new 10-year low of 237.5p.

The drop leaves M&S facing the prospect of falling out of the UK’s premier index for listed companies for the first time in its history after announcing a 9.9% drop in full-year pre-tax profits to £523.2m and a 3% slide in annual sales to £10.4bn this week.

The results were largely in line with expectations, but the shares were particularly hit by a 26% cut to the shareholder dividend and the higher than expected discount on its rights issue to fund its joint venture with Ocado.

CEO Steve Rowe insisted the year had provided evidence of “green shoots” of recovery as the retailer remained “deep in the first phase of our transformation programme”.

One of these reasons for optimism was the performance of its food business, which showed “good progress” in arresting its sales slide. Overall sales were down 0.6% with like-for-like sales down 2.3%, but M&S highlighted an improved fourth quarter with like-for-likes moving back to 0.4% growth and volume growth of 1.8%.

M&S pledged to focus on larger, higher-volume food outlets and as such will close some lower-­volume, higher-cost Simply Food stores.

The company will “relocate or rationalise” 25 Simply Food stores by 2024 as part of a wider store closure programme affecting another 85 full-range shops.

During the year, M&S suffered one-off charges of £438.6m on top of the £514.1m in its previous financial year, largely driven by its large-scale store closure programme.

Rowe’s strategy is an effort to convert in-store shoppers into online customers with its 50% acquisition of Ocado’s UK retail arm.

To fund the venture, M&S revealed a one-for-five fully underwritten rights issue at 185p per share to raise £601.3m to fund the joint venture.

“We are judging ourselves as much by the pace of change as by the trading outcomes and trading will accelerate in the year ahead,” Rowe said.

“We remain on track with our transformation and are now well on the road to making M&S special again”.

M&S shares are down around 38% since Rowe took over from Marc Bolland in April 2016.