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8 hours ago
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Marks & Spencer has said it will take an estimated £300m hit to profits this year from a damaging cyber-attack that has forced it to halt online orders and left it struggling to keep store shelves stocked.
The number was revealed as M&S said pre-tax profits rose by a better-than-expected 22% to £876m in the year to 30 March, shortly before the attack, as sales rose 6% to £13.9bn.
The company said it had more than £400m of net funds in the bank so that it had been “in the best financial health we’ve been in 30 years” before the hackers hit and the expected financial impact would be significantly mitigated by insurance, cost reductions and other actions.
The UK’s biggest clothing retailer, which also sells food and homeware, has been battling to recover for a month since its IT systems were hit over the Easter weekend.
The attack forced M&S to stop orders via its website, through which it sells fashion, homeware and gifts, while deliveries of food and fashion into stores and some deliveries to its online food partner, Ocado, have also been disrupted.
M&S has also admitted that some personal information relating to thousands of customers – including names, addresses, dates of birth and order histories – was taken in the cyber-attack.
Stuart Machin, the chief executive of M&S, thanked customers and staff for their support during the incident, which he said was “a bump in the road”. He said: “We will come out of this in better shape, and continue our plan to reshape M&S.”
Machin said the business was now “focused on recovery, with the aim of exiting this period a much stronger business” and there was no change to its longer-term plans. “If anything, the incident allows us to accelerate the pace of change as we draw a line and move on,” he said.
“We started the new financial year as we finished the last, with sales growth ahead of budget across both businesses,” Machin said. “Over the last few weeks, we have been managing a highly sophisticated and targeted cyber-attack, which has led to a limited period of disruption. We have tackled this head-on with incredible spirit, teamwork and deep sense of responsibility as we prioritised serving our customers.”
The figures showed the cyber incident had interrupted a strong period of trading for M&S. Food sales rose almost 9% to £9bn in the year to 30 March, while fashion and homeware sales were up 3.5% to £4.2bn despite a difficult autumn last year for most clothing businesses.
Machin said in the first few weeks of the new financial year before the cyber-attack, M&S had continued with “sales growth ahead of budget across both businesses”. The company did not give a figure for how much sales had fallen since the attack.
The attack, which has been attributed to the hacking collective Scattered Spider, emerged days before similar cyber-attacks were reported against the Co-op and Harrods.
