Published 8th Nov 2023, 08:17 BST

The company, which has undergone a significant turnaround plan in recent years including a raft of store closures, said it will hand shareholders a dividend for the first time since the Covid-19 pandemic hit, as a result of the performance.

The chief executive Stuart Machin said the business saw strong sales momentum continue into October, with customers responding well to Christmas products.

However, M&S cautioned that the outlook for consumers remains “uncertain”, flagging the impact of “the highest interest rates in 20 years, deflation, geopolitical events, and erratic weather”.

Marks & Spencer has revealed stronger-than-expected profits for the past half year after it was buoyed by a surge in food sales. (Photo by Charlotte Ball/PA Wire)

It came after the retailer posted a pre-tax profit of £325.6m for the six months to September 30, up 56.2 per cent on the same period last year.

Analysts had predicted it would reveal a profit of around £276m.

Meanwhile, revenues increased by 10.8 per cent to £6.13bn for the period, boosted by a 14.7 per cent rise in food sales.

It said growth in the grocery arm was driven by investment into improving value amid a continued inflationary backdrop.

Meanwhile, its clothing and home division witnessed a 5.7 per cent rise in sales, with particularly strong demand for holiday clothes and denim.

M&S said it also benefited from a cost reduction in its logistics networks as well as improved currency and freight rates.

Mr Machin said: “Our strategy to reshape M&S for growth has delivered strong results in the first half.

“We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price.

“There will be challenges and headwinds in the year ahead, and progress won’t be linear, but we are ambitious for future growth and are driving what is in our control.”

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: "In a difficult trading environment M&S has delivered excellent results, with notable progress in food and clothing and home, and both businesses outperforming the market.

"With momentum having continued into October, the turnaround plan to revitalise the brand and reignite growth is well on track and the group can look forward to the Christmas period with confidence.

"The clothing and home division has been a problem child for M&S for many years.

"The new strategy, launched last year, aims to improve brand perception and designs, reduce discounting and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture. Early signs are this plan is resonating with consumers.”

“However, pressure on the UK consumer could intensify heading into 2024 as the impact of higher interest rates really starts to bite. This, combined with tougher comparatives means M&S is striking a tone of caution looking ahead to the second half. This may disappoint investors.

"Overall, M&S is delivering strongly on the things it can control and seems to be in a much better place now than it was a few years ago. However, it isn't fully in charge of its own destiny and is heavily dependent on consumer confidence, where uncertainties still abound."

Soaring food sales drive Marks & Spencer to bigger-than-expected profit