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HIGHLIGHTS
- Marks and Spencer recorded a profit before tax of £187.3 million for the half-year period ended 2 October 2021 compared to a loss of £87.6 million in 2020.
- Halfords Group raised its FY22 full-year profit before tax guidance to £80 million - £90 million, from the previous £75 million.
Two of the UK’s leading retailers, Marks and Spencer Group (LON:MKS) and Halfords Group (LON:HFD), saw their shares surge by around 12% and 15%, respectively, after the retailers upgraded their full-year profits forecast. Retailers in the past had faced issues due to the restrictions levied on the backdrop of the COVID-19 pandemic, supply chain inconsistencies arising as a result of the HGV driver shortage, and staff shortage.
However, with the reopening of the economy and the resurgence of consumer confidence, retailers are expected to register robust revenue growth in the coming months. Let us review in detail the investment prospect in two FTSE listed retail stocks - Marks and Spencer and Halfords, which have upgraded their profit outlook.
Data source: Company release
Marks and Spencer Group Plc (LON: MKS)
Marks and Spencer is an FTSE 250 listed clothing, food and homeware retailer. For the half-year period ended 2 October 2021, Marks and Spencer recorded a profit before tax of £187.3 million compared to a loss of £87.6 million in the same period in the previous year. Its statutory revenue was £5,105.3 million for the period compared to £4,090.9 million in the previous year. The company’s food sales registered a growth of 10.4% year on year.
The group raised its full-year underlying profit before tax guidance from about £350 million to about £500 million, driven by its technology investments and revamp of clothing business.
The shares of Marks and Spencer Group are trading at GBX 217.10, up by 11.75% at 10:58 AM BST on 10 November 2021. The market cap of the company is £3,808.07 million, and the shares of the company returned 93.02% to shareholders in the last one year.
Halfords Group Plc (LON:HFD)
Halfords Group is a leading retailer of cycling and motoring products and services in the UK. Halfords’ revenue for H1 FY22 was £694.8 million compared to £638.9 million in H1 FY21, driven by high demand for e-scooters and e-bikes. It reported a profit before tax of £64.3 million in H1 FY22 compared to £55.4 million in H1 FY21.
Halfords Group raised its FY22 full-year profit before tax guidance to £80 - £90 million, from the previous £75 million, as its supply chain issues have begun to ease.
Halfords’ board declared an interim dividend per share of 3 pence per share to shareholders.
The shares of Halfords Group are trading at GBX 319.60, up by 14.72% at 11:00 AM BST on 10 November 2021. The market cap of the company is £554.74 million, and the shares of the company returned 35.02% to shareholders in the last one year.
