M&S: Cyber attack to hit profit by £300m

Marks and Spencer (M&S) has said that the cyber attack it has been battling since late April will blow a £300m hole in its earnings this year.

It expects the £300m impact on 2056/2026 profit to be reduced through “management of costs, insurance and other trading actions”.

It has been almost a month since the high street darling first updated markets about a “major cyber incident”, thought to be related to the hacking group Scattered Spider.

Online orders, as well as click and collect payments, have been down for the last three and a half weeks.

This has “heavily impacted” trading profit, the company said. It also incurred costs associated with reduced food availability and waste.

M&S said it expects online disruption to continue throughout June and into July.

M&S raises dividend despite cyber hit

M&S told investors it would raise its yearly dividend by 20 per cent to 3.6p due to a strong yearly performance, despite the impact of the cyber attack.

Profit before tax and adjusting items rose 22.2 per cent to a 15-year high of £875.5m, from £716.4m the year before.

Analysts responded positively to the figures to the news, with Shore Capital analysts saying the company had “blown the doors off, again”.

“These are very high-quality results, and indeed they have been for several years, and we wholly commend Stuart Machin and his leadership team on their delivery,” Shore Capital said.

Analysts noted that M&S had “scope for a strong rebound” when operations “are no longer encumbered by the distraction” of the cyber attack.

Fashion, Home & Beauty sales rose 3.5 per cent to £4.2bn.

Food sales increased 8.7 per cent to £9bn, with like-for-like growth of 8.6 per cent.

This was driven by UK volume growth of 6.7 per cent, with “strong growth” in core categories, M&S said.

Market share was up 0.27 per cent to 3.9 per cent.

The company noted that it took a £28.7m loss from its rocky joint venture with Ocado.