Britain's M&S flags higher shareholder returns

By James Davey

LONDON, July 7 (Reuters) - Marks & Spencer will this year detail plans to increase returns to shareholders in years ahead, its finance chief said on Tuesday, highlighting the British clothing and food retailer's financial strength.

Alison Dolan, M&S's chief financial officer, told the group's annual shareholders' meeting that the retailer had a robust balance sheet with a net funds position and a strong investment-grade credit rating.

"What that will mean is that over the coming years we will be in the position both to invest and to increase what we return to shareholders," she said on Tuesday.

"I would expect that over the course of this current financial year (2026-27) we will be in a position to be clearer about our policy in that regard and the timing of those returns."

M&S ended its 2025/26 financial year with net funds excluding lease liabilities of £338.2 million 452 million). It plans capital expenditure of £650 million to £750 million in 2026/27, with about two-thirds targeting the long-term growth opportunity in food.

In May, M&S forecast a return to profit growth in its current year from a 24% slump caused by a hit from a cyberattack in the year that ended on March 28, 2026, and raised its full-year dividend by 16.7%.

Shares in M&S are up 16% so far this year.

Chairman Archie Norman told investors M&S entered its new financial year in "fighting fit form".

"We'd like to be a business that delivers consistently high single-digit revenue growth and double-digit profit growth," he said.

M&S currently has a 4.1% share of Britain's grocery market, or 4.6% if M&S products sold through Ocado are included. Its long-term ambition is to double food sales.

CEO Stuart Machin noted M&S's fridges struggled to cope with June's heatwave when temperatures hit record levels and said the group was reviewing all its refrigeration.

"There is no doubt we were struggling in those nine days of extreme heat," he told investors.

"Now we're investing in plant equipment for new stores to deal with temperatures of 45 degrees Celsius, assuming every summer's going to get warmer."

($1 = 0.7475 pounds)

(Reporting by James DaveyEditing by Tomasz Janowski)