Marks & Spencer has signalled plans to increase shareholder returns in the coming years as it looks to balance heavier investment with growing confidence in its turnaround.
Chief financial officer Alison Dolan told shareholders at the retailer’s annual meeting that M&S was in a stronger financial position, supported by a robust balance sheet, net funds and an 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,” Dolan said.
She added that the retailer expected to provide more detail on its policy and the timing of future returns during the current financial year.
M&S ended its 2025/26 financial year with net funds excluding lease liabilities of £338.2m. The retailer is planning capital expenditure of £650m to £750m in 2026/27, with around two-thirds of that spend focused on the long-term growth opportunity in food.
The update follows a turbulent year for the FTSE 100 retailer, after a cyberattack weighed heavily on trading and sent annual adjusted pre-tax profit down 23.8 per cent to £671.4m.
However, M&S has forecast a return to profit growth this year and raised its full-year dividend by 16.7 per cent to 4.2p.
Chairman Archie Norman told investors the business had entered the 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 shares have risen 16 per cent so far this year, reflecting investor confidence in its recovery and growth prospects.
It currently holds a 4.1 per cent share of the UK grocery market, rising to 4.6 per cent when M&S products sold through Ocado are included. Its long-term ambition is to double food sales.
Chief executive Stuart Machin also told shareholders that M&S was reviewing its refrigeration estate after stores struggled during June’s heatwave.
“There is no doubt we were struggling in those nine days of extreme heat,” he said.
Machin added that M&S was now investing in plant equipment for new stores that can cope with temperatures of 45C, as the business assumes summers will continue to get warmer.
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