Investors were cheered by Marks & Spencers Group PLC’s annual results on Wednesday, with the firm expecting to resume dividend payments at its interim results.

In the year to April 1, the London-based clothing, homewares and food retailer said revenue rose 9.6% to £11.93 billion from £10.89 billion.

Shares in M&S rose 10% to 180.10 pence each in London on Wednesday morning.

It said the performance was driven by Clothing & Homes sales, which rose 12%.

The growth was ‘driven by a more confident approach to buying and a focus on the modern mainstream customer, which is starting to drive better style perceptions’, M&S said.

Meanwhile Food sales rose 8.7%, with UK Food sales getting a boost from the Gist Ltd acquisition. International sales rose 13%, thanks to global demand for clothing, as profit in the division recovered from its Russian exit and EU border-related costs.

‘M&S delivered strong results in 2022/23 despite significant inflationary cost headwinds impacting margins, reflecting the benefits of its programme to reshape for growth,’ the company said.

Pretax profit jumped 21% to £475.7 million from £391.7 million. This was due to a net charge of just £6.3 million in adjusting items, compared to £131.2 million.

‘The reduction was largely a result of a credit of £108.0 million representing the revaluation of the contingent consideration payable for the investment in Ocado Retail Ltd,’ M&S explained.

M&S said it has had a good start to the new financial year, with Food and Clothing & Home sales growing.

‘While the economic outlook for consumer spending is uncertain, cost inflation remains high, and market conditions are expected to become more challenging, the strategy is beginning to deliver improved performance and there remains much within the group’s control,’ M&S said.

It expects modest annual growth in revenue. Cost inflation of around £150 million is expected to be offset by the same amount in savings from its structural cost reduction programme.

The retailer declared no dividends, but said it plans to resume payouts at its interim results. This is in light of its ‘disciplined approach to capital allocation’. It had suspended dividends at the start of the pandemic, in order to protect its balance sheet.

‘Robust liquidity and balance sheet metrics allow for a further bond repurchase exercise of circa £225 million in respect of our medium-term maturities,’ M&S said.

Separately, M&S announced a tender offer for any and all of its £300.0 million 3.000% notes due 2023, as well as £225.0 million in aggregate of its £400.0 million 4.750% notes due 2025, and its £300.0 million 3.750% notes due 2026.

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