HAVING set a consistent pattern of solid profit growth and steadily increasing returns to shareholders retailing phenomenon Marks & Spencer is discovering the disadvantages of being perceived as a gilt-edged investment. With investors harbouring high growth expectations for the half, year to end September there was disappointment with interim figures this week showing a competent 11.6 per cent improvement in pre-tax profits to £430 million sterling.
The chairman, Sir Richard Greenbury, considers analysts' expectations to be unrealistic. The company, he contends, continues to outperform its rivals in a fiercely competitive retail sector. Anyone looking for 20 per cent growth from M & S was "out of touch" with the present realities of retailing.
Overseas, M & S has high hopes for Australia and expects to get a toehold in this vast market over the next five years. In Germany the first Marks and Spencer has recently opened its doors in Cologne and in Ireland the newly-opened flagship store in Grafton Street has got off to a bright start.
Although analysts are trimming back forecasts of full year profits to just over £1 billion sterling, the Marks name and trading record will retain its cachet despite any wobble in City sentiment. For shareholders dividend rises a solid 10 per cent to 3.3p a share.