FTSE 100 close: Marks knocked down by divi blow
Shares in Marks & Spencer slid 8.1%, or 27.5p to to 311.75p after it posted a 40% drop in annual profit and cuts its final dividend by a third.
Big day: The FTSE 100 giant reports today.
Meanwhile, the wider market was in the black, with the FTSE 100 index closing 35.8 points up at 4,482.3.
M&S, Britain's biggest clothing retailer, also said it remains cautious about the trading outlook.
'While the dividend cut was largely expected, the modestly reduced space, gross margin and cost guidance, and the absence of any earnings upgrade, could weigh on the shares in the wake of the recent share price outperformance,' Citi analysts said in a research note.
Seymour Pierce analysts meanwhile say there is potential for M&S to improve its gross profit margins on general merchandise, to grow share in childrenswear and homewares and to improve its performance in womenswear.
'It will, however, be more difficult to improve profitability in the food business as rival food retailers have improved the quality of their ranges and M&S has had to become more competitive,' they add, keeping a 'hold' rating on the stock.
Next joined its rival on the fallers' board with a decline of 32p to 1526p, while B&Q owner Kingfisher dropped 0.2p to 184.2p and Argos and Homebase firm Home Retail Group eased 2.25p to 251.75p.
Staying in clothes retailing, Burberry today reported a 13% fall in underlying profits to £174.6m, despite annual revenues topping more than £1bn for the first time. The increase in sales - driven by foreign tourists attracted to the UK by favourable exchange rates - at the luxury goods firm was offset by margins whittled down by discounted prices.
Restructuring costs of £54.9m and balance sheet write-downs of £129.6m, Burberry posted bottom-line losses of £16.1m, against profits of £195.7m a year earlier.
Shares were 5.5p down to 396.75p in the FTSE 250 Index.
Bank shares rallied after the Financial Times said the UK government had begun sounding out sovereign wealth funds and other investors about selling stakes in its part-nationalised banks.
Royal Bank of Scotland rose 1.8p to 43.1p and Lloyds Banking Group added 2.3p to 100.3p.
Vodafone shares were 5.05p down at 122.4p after it unveiled annual operating profits of £11.8bn today but warned it did not expect to better the figure in the current financial year.
The mobile phone giant said the 16.7% improvement in adjusted operating profits for the year to 31 March reflected 'robust' trading in Africa and India, offsetting a weaker performance in its more mature European markets.
The Newbury-based company said economic uncertainty and the threat of rising unemployment in Europe meant it expected operating profits for the 2009/10 year to be in the range of £11bn and £11.8bn.
Confirmation of the first rights issue in the property sector aimed at funding cut-price acquisitions saw the sector on the front foot today.
Great Portland Estates proposed the fundraising aimed at netting around £166m to invest in cheap London properties in the recession. Great Portland shares jumped 21.5p to 315p in the FTSE 250, while Land Securities gained 30.5p to 519p in the top flight and British Land rose 22.5p to 422p.
First Choice and Thomson holidays firm TUI Travel saw shares fall 4.5p to 253.25p after reporting a £333m half-year loss. TUI said the performance was in line with expectations and said revenues improved 4% to £5.38bn.
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