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Last Updated: Tuesday, 6 November 2007, 19:22 GMT
Upbeat M&S eyes overseas growth
M&S store
M&S says the current retail outlook remains uncertain
Marks and Spencer has reported a strong rise in half-year profits and unveiled plans to expand in China and India.

M&S made an adjusted pre-tax profit of 451.8m ($942m) for the six months to 29 September, up 11.5% on last year and better than expectations.

Same-store sales, which exclude new store openings, were up 1.6% in the UK.

The retailer described the results as "good", given the poor summer weather, but it also warned that the short-term UK retail outlook remained "uncertain".

Overseas expansion

M&S said that it was now planning to enter the Chinese market, with its first store expected to open during the next financial year.

The actions we have taken to reposition and revitalise M&S... give us confidence in the long term growth prospects of the business
Stuart Rose, Marks and Spencer chief executive

It also announced that it was planning to expand its presence in India, where it has traded for six years.

"We believe that there is a significant opportunity to grow our international business going forward and are targeting a 15-20% contribution to group revenues within the next five years," it said.

The retailer currently has 257 overseas stores in 36 countries.

'Tough market'

The firm's total sales for the half-year came to 4.2bn, a 6.5% increase on the same period last year.

Overall UK sales advanced 5.9%, while those at stores abroad jumped 13.8%.

UK food sales were up 0.5%, while general merchandising sales grew by 2.3%.

"We had a good first half despite a tough market impacted by unseasonable trading conditions, and at a time when many of our stores were undergoing major refurbishment," said M&S chief executive Stuart Rose.

"Whilst the short-term economic outlook remains uncertain, the actions we have taken to reposition and revitalise M&S over the last three years put us in a good position to continue to outperform and give us confidence in the long-term growth prospects of the business."

Mr Rose added that by Christmas, M&S would have modernised 70% of its retail space.

M&S also announced plans for a 1bn share buyback, which helped to lift its share price.

Its shares closed up 21p, or 3%, at 653p.

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