Marks & Spencer Half Yearly Report

[idpickering]

Strategic progress

· New management structure and significant change in organisation and direction under substantially new leadership team

· Reshaping buy and focusing on hero lines in Clothing & Home

· Initial steps to restore value and broaden family appeal in Food

· Closure programme of over 100 full-line stores generating encouraging transfer rates; significant further change required

· Initial steps to drive digital catch up and change in culture; 20.4% of UK C&H sales now online

· Process in place to reengineer end to end supply chain, removing costs, complexity and working capital

· At least £350m of cost savings targeted, to underpin delivery

And later;

Dividend

We have announced an interim dividend of 6.8p. This will be paid on 11 January 2019 to shareholders on the register of members as at close of business on 16 November 2018.

https://www.investegate.co.uk/marks---3 ... 00045550G/

[Arborbridge]

Dividend

We have announced an interim dividend of 6.8p. This will be paid on 11 January 2019 to shareholders on the register of members as at close of business on 16 November 2018.

https://www.investegate.co.uk/marks---3 ... 00045550G/

Fourth hold in a row, then.

I like Marks, I always shop there, I would love to have stayed as a shareholder and sometimes have a pang of regret selling. Too early to say whether my selling MKS was a wise move or not, but it seems like the same ole same ole story of a breakthrough just on the horizon.


Arb.

[Darka]

I sold a few years ago, after continuing disappointing figures, nothing seems to have changed and I'm not sure what they can do to recover.

I wouldn't hold, better options out there.

[idpickering]

I too sold a few years ago. I'm not a fan of niche type retail shares, although MKS can barely be described as such maybe. I only hold Sainsbury's in the overall retail sector.

Ian.

[moorfield]

This one also features regularly in Moneyweek's Top 10 Hated (ie. Shorted) Shares table. As a HYPster, one to avoid I feel, although as a customer I am also a fan and would be sad to see them go / fall into Mike Ashley's mitts.

[Gengulphus]

I'm not a fan of niche type retail shares, although MKS can barely be described as such maybe.

Eh? I can see no way whatsoever to regard M&S as a "niche type retail share" - not even barely. The things it sells are mainly everyday necessities - food and clothing - rather than specialised items that no-one actually needs and the market for which could vanish as a result of a change in fashion. They are an upmarket retailer of such things and their market could decrease as a result of economic pressures on their customers, and that produces some risks that differ from those of other supermarket-type companies - but they're quite different from those faced by niche retailers and I really don't think it at all helpful to regard them as a niche retailer.

By the way, 'different' means just that - no implication of 'less'. With M&S being an upmarket supermarket-type company, there are risks it faces that niche retailers don't. For instance, Aldi and Lidl are competitors with M&S as retailers of everyday necessities (though not particularly close competitors), whereas they're simply not competitors at all with true niche retailers: your local stained-glass shop or whatever need not be concerned about them taking its customers away!

And M&S do of course sell some specialised, non-necessity items - but so do Tesco for instance if you look in the right places in their supermarkets...

Finally, don't take any of the above as saying that I think M&S is an excellent HYP company: I don't! I've held it for a long time (my oldest holding goes back to a single-company PEP I bought in the last couple of years of PEPs, which makes it a bit over 20 years old, though that holding wasn't bought on the yet-to-be-defined HYP criteria) and it's thrown off the dividends pretty reliably. But growth in either capital or dividend terms has been distinctly thin on the ground... Its school report is definitely a mass of "Could do better"s, but it hasn't quite qualified for expulsion as far as I am concerned!

Gengulphus

[Julian]

I'm another only-just holder of M&S. I never had a heavy weighting but sold out about two thirds of my holding a few years ago. All that remains of M&S in my portfolio is a pretty small stake in my ISA.

I am unsurprisingly not impressed by the share performance or dividend growth so why do I continue to hold any? Well, the main reason is that I don't see them heading for a spectacular crash, they might start making forward progress, and in the mean time at least they aren't cutting dividends. They also have a decent property portfolio. Personally I like the stores (as opposed to Tesco where I think the stores I have contact with were and still are terrible) and do shop there and my experiences of their internet click&collect service have all been extremely positive - spectacularly so in one case although maybe with my shareholder hat on I should have been frowning(*). I'll also admit that the shareholder coupons are something that, although never a buying consideration, maybe are that tiny thing that tips the balance in favour of me staying on board and not selling out the final bit of my holding because they probably do bung £50 in my pocket each year in savings which is equivalent to about another £75 of dividends when grossed-up for tax.

- Julian

(*) A few years ago I had a click&collect that wasn't available for pickup until about 2 hours after the promised delivery deadline. I got an email before the deadline warning me that it would not be there in time and then another email a couple of hours later saying it was now available to collect and that because of the delay they were refunding me the entire value of my order via an M&S gift card! I don't think they do that anymore but it was a pretty serious statement of intent that they took the available-to-collect-by commitments displayed at the time of placing an order very, very seriously.

[daveh]

I'm another MKS holder, and HYPTUSS keeps putting it at or near the top of my top up list. At the moment it is in second place behind DC. (Dixons Carphone) but so far I've not had the courage to top it up. I have been tempted to make a small top up of DC. we'll see if it is a sensible move or not.
I've been investing a number of accumulated dividends - realised I could make some smaller investments as one of my brokers sets dealing fees against the qtrly fees so I have a number of 'free' deals every quarter that I may as well as make use of. So far topped up BP and Lloyds with accumulated divis.

[NeilW]

MKS is somewhat less than a third of my increasingly broad "getting stuff to consumers" sector. The other two being Sainsbury's and Royal Mail Group.

Some would say it is an inertia play.

[idpickering]

I'm not a fan of niche type retail shares, although MKS can barely be described as such maybe.

Eh? I can see no way whatsoever to regard M&S as a "niche type retail share" - not even barely. The things it sells are mainly everyday necessities - food and clothing - rather than specialised items that no-one actually needs and the market for which could vanish as a result of a change in fashion. They are an upmarket retailer of such things and their market could decrease as a result of economic pressures on their customers, and that produces some risks that differ from those of other supermarket-type companies - but they're quite different from those faced by niche retailers and I really don't think it at all helpful to regard them as a niche retailer.

By the way, 'different' means just that - no implication of 'less'. With M&S being an upmarket supermarket-type company, there are risks it faces that niche retailers don't. For instance, Aldi and Lidl are competitors with M&S as retailers of everyday necessities (though not particularly close competitors), whereas they're simply not competitors at all with true niche retailers: your local stained-glass shop or whatever need not be concerned about them taking its customers away!

And M&S do of course sell some specialised, non-necessity items - but so do Tesco for instance if you look in the right places in their supermarkets...

Finally, don't take any of the above as saying that I think M&S is an excellent HYP company: I don't! I've held it for a long time (my oldest holding goes back to a single-company PEP I bought in the last couple of years of PEPs, which makes it a bit over 20 years old, though that holding wasn't bought on the yet-to-be-defined HYP criteria) and it's thrown off the dividends pretty reliably. But growth in either capital or dividend terms has been distinctly thin on the ground... Its school report is definitely a mass of "Could do better"s, but it hasn't quite qualified for expulsion as far as I am concerned!

Gengulphus

Thanks for your input. I am entitled to my opinion, and stand by it.

Ian.

[Gengulphus]

Thanks for your input. I am entitled to my opinion, and stand by it.

Of course you are. So am I, and I stand by mine as well - and in addition, I tell others here why I hold the opinion I do so that they can decide for themselves whether they agree with my reasons.

Moderator Message:
DELETED some stuff. It seems to me that you both have a genuine opinion and a lot of respect for each other and each other's opinion. That is sufficient. regards, dspp

Gengulphus

[idpickering]

** DELETED **

To get back to MKS, I don't personally think they're a good HYP share prospect, and would look elsewhere.

Ian.

Moderator Message:
No need to comment on mod actions thank you. dspp

[Dod101]

I do not hold M & S, nor any other retailers for that matter. Still, if you want to see why they are struggling, I have just been to them this afternoon and also Lidl. I have not been to Lidl for a long while.

No doubt that M&S quality in foodstuff is excellent but very expensive. Neither has their offering changed much in a long while. As I would expect, it was fairly quiet on a wet Wednesday afternoon.

Lidl on the other hand was busy and not only that it has a free car park. It is like an Aladdin's cave and you do not know what is coming next. Quite a lot of Continental stuff (? although come Brexit?) which I rather like and a good selection of Christmas stuff is now appearing. Next shop I will go to them first which is what I used to do and then pick up the odd bits I cannot get there elsewhere.

I never go to their clothing area so cannot comment.

Dod

[idpickering]

I do not hold M & S, nor any other retailers for that matter. Still, if you want to see why they are struggling, I have just been to them this afternoon and also Lidl. I have not been to Lidl for a long while.

No doubt that M&S quality in foodstuff is excellent but very expensive. Neither has their offering changed much in a long while. As I would expect, it was fairly quiet on a wet Wednesday afternoon.

Lidl on the other hand was busy and not only that it has a free car park. It is like an Aladdin's cave and you do not know what is coming next. Quite a lot of Continental stuff (? although come Brexit?) which I rather like and a good selection of Christmas stuff is now appearing. Next shop I will go to them first which is what I used to do and then pick up the odd bits I cannot get there elsewhere.

I never go to their clothing area so cannot comment.

Dod

Great post Dod. Up here in Orkney there isn't a MKS, but we do have Tesco and Lidl. To be honest we get most of our shopping at the later. It just demonstrates to me how much other stores such as MKS are pricing themselves out of range for us ordinary folk.

Ian.

[Arborbridge]

I do not hold M & S, nor any other retailers for that matter. Still, if you want to see why they are struggling, I have just been to them this afternoon and also Lidl. I have not been to Lidl for a long while.

No doubt that M&S quality in foodstuff is excellent but very expensive. Neither has their offering changed much in a long while. As I would expect, it was fairly quiet on a wet Wednesday afternoon.

Lidl on the other hand was busy and not only that it has a free car park. It is like an Aladdin's cave and you do not know what is coming next. Quite a lot of Continental stuff (? although come Brexit?) which I rather like and a good selection of Christmas stuff is now appearing. Next shop I will go to them first which is what I used to do and then pick up the odd bits I cannot get there elsewhere.

I never go to their clothing area so cannot comment.

Dod

Why do we British judge everthying by price and not quality. Not aiming at you particularly, Dod or Ian, but it does seem that we are positively proud of buying "things" cheaply without proper consideration of the quality or consequences.
I'd prefer people to be boast of paying over the odds for high quality and for products which allow people to earn a decent living instead of child labour, slave labour, minimal standards of living, zero hour contracts and destruction of the environment. One of the consequences is, of course, poor service in general and don;t we just love moaning about it whenever it happens, forgetting that it is the unhealthy compulsion which causes it.
We live in a horrendous world of exploitation and people positively revel in getting a few quid off the next produce, whatever it may be.
The modern world is one in which standards of product, service and human decency are slowly being racheted down to lowest threshhold possible .


Arb.

[tjh290633]

I guess that we can judge the performance of MKS in the fashion side by reference to Debenhams and others, and on the food side by comparison with Waitrose. Maybe the JLP overall?

From what I have seen, Lidl are on another planet, but maybe I've been to the wrong branches.

I inherited MKS from my mother in 1970. The early years were a time apart. Apart from the return of capital via B-shares in 2002, I trimmed back in 2009 and have been regularly topping up when weakness in the price has propelled them to the top of my top-up rankings. Most recently in January at 304p.

My IRR has been 10.3% over the 48 years, and the peaks in the SP have been c.600 in 1998 and c.700 in 2007.although there were multiple scrip issues up to 1984, so today's price is the equivalent of 1300p then.

I'm not turning my nose up at a yield of 6.2%.

TJH

[daveh]

Why do we British judge everthying by price and not quality. Not aiming at you particularly, Dod or Ian, but it does seem that we are positively proud of buying "things" cheaply without proper consideration of the quality or consequences.
I'd prefer people to be boast of paying over the odds for high quality and for products which allow people to earn a decent living instead of child labour, slave labour, minimal standards of living, zero hour contracts and destruction of the environment. One of the consequences is, of course, poor service in general and don;t we just love moaning about it whenever it happens, forgetting that it is the unhealthy compulsion which causes it.
We live in a horrendous world of exploitation and people positively revel in getting a few quid off the next produce, whatever it may be.
The modern world is one in which standards of product, service and human decency are slowly being racheted down to lowest threshhold possible .


Arb.

I agree we too often buy on price, and I'm probably as guilty as the next person. However, I used to pick up my clothes in Tesco, but have started to get more from MKS (online) as I think the quality is better and I like their non iron 100% cotton double cuff shirts though the range seems sadly depleted when I last looked with not much colour choice.