Doubts over possibility of cash call from M&S

Sources close to executive chairman Sir Stuart Rose told a newspaper there was "no need" for a major fundraising following an improved trading performance from the business.

Some analysts have said incoming chief executive Marc Bolland – who joins from Bradford-based supermarket Morrisons next month – could use money from a rights issue to start an overhaul of the retailer.

But the cash call would come after a tricky period which has already seen shareholders faced with a dividend cut.

Relations with major investors were soured by Sir Stuart's controversial dual role as executive chairman and chief executive against City best practice. He will retain the role while Mr Bolland beds into the business.

Marks & Spencer, which was unavailable for comment on the story, is due to post another improvement in sales with its latest trading update on Thursday, which covers the 13 weeks to March 27.

The retailer – along with many others – posted its first like-for-like sales growth in more than two years in the quarter to December 26, but is cautious about prospects this year amid growing pressure on consumers.

Sales this time around should benefit from a quirk of M&S's reporting calendar which puts the first day of the the company's post-Christmas sales into the traditionally quieter final quarter of its financial year.

Although January's snow hampered trading, M&S managed to keep most of its stores open, and analysts at Investec currently expect results in May to show profits of pre-tax profits of 625m.

This would be a slight improvement on the 604.4m reported the previous year – but still well below the 1bn seen in the year to March 2008 before the recession punished the high street.