Bulletin: M&S' Cash Flows Remain Steady As Transformation Plan Hits Profits

LONDON (S&P Global Ratings) May 23, 2019--S&P Global Ratings said today that the terms of the equity rights issue that Marks&Spencer PLC (M&S; BBB-/Negative/A-3) announced yesterday alongside its annual results for the financial year ended March 31, 2019 (FY2019) are largely in line with our forecast and commensurate with the current ratings and outlook. M&S reported weaker earnings in FY2019 than we anticipated, largely driven by the acceleration of its store closure program, lower prices in its food division, and investments in its IT systems, logistics network, and supply chain. As such, reported EBITDA of £916 million was about £90 million lower than our forecast, and the S&P Global Ratings-adjusted EBITDA margin fell to 12.2% from the 12.7%

...May 23, 2019 LONDON (S&P Global Ratings) May 23, 2019--S&P Global Ratings said today that the terms of the equity rights issue that Marks & Spencer PLC (M&S; ###-/Negative/A-3) announced yesterday alongside its annual results for the financial year ended March 31, 2019 (FY2019) are largely in line with our forecast and commensurate with the current ratings and outlook. M&S reported weaker earnings in FY2019 than we anticipated, largely driven by the acceleration of its store closure program, lower prices in its food division, and investments in its IT systems, logistics network, and supply chain. As such, reported EBITDA of ú916 million was about ú90 million lower than our forecast, and the S&P Global Ratings-adjusted EBITDA margin fell to 12.2% from the 12.7% M&S posted in FY2018. At the same time, cash generation was stronger than our previous base case, with reported discretionary cash flow (DCF) of about ú235 million--almost double our previous forecast. This has allowed the group to...

Bulletin