StockMarketWire.com - Clothing and food retailer Marks & Spencer booked a 17% fall in first-half adjusted profit as sales continued to slide in its clothing and home division.

Pre-tax profit for the six months through September rose 52% to £153.5m, up from £101.3m on-year, thanks to lower one-off restructuring costs.

Revenue, however, fell 2.1% to £4.86bn, underpinning the 17% fall in adjusted profit to £176.5m.

Marks & Spencer declared an interim dividend of 3.9p per share, down 40% on-year.

Clothing and home like-for-like sales fell 5.5%, while food like-for-like sales grew 0.9%.

The company said it had experienced an improved sales performance in clothing and and home in October, following a difficult first half.

For the full year, Marks & Spencer said it expected clothing and and home sales to fall by around 2% following store closures.

Gross margin was seen falling 25-to-75 basis points.

In food, the company said it expected the sales contribution from space to be broadly level.

UK operating costs would fall by between 1% and 2% and expectations for capital expenditure had been reduced to £300m-to-£350m.

'Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer,' chief executive Steve Rowe said.

'For the first time we are beginning to see the potential from the far reaching changes we are making.

'The Food business is outperforming the market.'

'Our deal to create a joint venture with Ocado is complete and plans to transition to the M&S range are on track.'

In clothing and home, meanwhile, Rowe said Marks & Spencer was 'making up for lost time'.

'We are still in the early stages, but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season's contemporary styling and better value product.'

'We have taken decisive action to trade the ranges with improved availability and shorter clearance periods.'

'In some instances dramatic sales uplifts in categories where we have restored value, style and availability illustrate the latent potential and enduring broad appeal of our brand.'

'Our cost reduction and store technology programmes are on track.'



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