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Last Updated: Tuesday, 7 November 2006, 18:48 GMT
M&S sees half-year profits soar
M&S Marble Arch store in London
M&S has done well on food and clothing sales
The recovery at Marks and Spencer has continued with the firm reporting a 32% rise in half-year profits.

For the six months to 30 September, pre-tax profits were 405.1m ($770m), up from 305.7m a year ago.

The rise follows strong food and clothes sales growth, which has been helped by a well-received marketing campaign featuring Twiggy.

Looking ahead, M&S said it aimed to increase total group space by as much as one-fifth over the next five years.

M&S shares closed 41.5 pence, or 6.32%, higher at 698p on the London market.

'Style and innovation'

The profits are further good news for chief executive Stuart Rose, who took over in 2004 to repel a 9bn takeover bid from Sir Philip Green.

We believe we are well positioned for the all-important Christmas period
Stuart Rose, M&S chief executive

After the results announcement, Mr Rose said: "We had a good first half. We have delivered better product, better service and better store environment.

"We have gained market share in all areas in which we trade."

M&S said its overall like-for-like sales - which strip out the effects of new store openings - were up 6.4%.

Footfall increased "significantly" with 19 million more visits over the half-year, "driven by better values, with style and innovation".

Mr Rose added the company was "well positioned for the all-important Christmas period".

'Big hill'

However, he told BBC Radio 4's Today programme it was too soon to get carried away by the results.

The 1960s model Twiggy
Twiggy has been at the forefront of M&S's new image on clothes

"It is a tough market out there," he said, and pointed out that the company still had to modernise 65% of its stores. "That is a big hill to climb."

He said that while M&S was being asked to open more stores overseas, "we must get our UK business on track first".

Mr Rose added that trading growth during October was in line with the first-half figures.

M&S's total market share for clothing rose by 0.9 percentage points to 10.1%, following strong growth in womenswear, lingerie, menswear, and childrenswear. Like-for-like food sales were up by 4.7%.

Electrical products

M&S also announced it aimed to increase its total group space by up to 20% over the next five years.

Mr Rose indicated the firm was looking to use the new space to "stretch" the brand into new areas, after the success of initiatives such as Hot Food to Go, and Eat Over Delis.

In addition, M&S's trial of electrical products has now been extended into 13 stores, offering LCD TVs, DVDs, and laptops.

"We have been pleased with customer reaction," said Mr Rose.

Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers, said there were a number of positives from the M&S figures.

He said they were: "Continuing strength in clothes and food, the refurbishment programme advancing, the ongoing success of the TV advertising campaign and even the roll-out of its Simply Food brand across BP forecourts."

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