Bulletin: M&S's Joint Venture With Ocado Offers Chance To Strengthen Its Business Model

LONDON (S&P Global Ratings) March 1, 2019--S&P Global Ratings said today that the joint venture between Marks&Spencer PLC (M&S; BBB-/Negative/A-3) and Ocado Group PLC could help M&S enhance its competitive standing in the long term, and will have limited impact on its immediate credit quality. Ocado is the U.K.'s leading online grocer, and M&S has felt the lack of an online channel in its food division in recent years. M&S will fund its initial £562 million cash payment for its share in the joint venture through equity and has cut by 40% its dividend for the financial year to March 31, 2019 (FY2019). The group's prudent financial policy will cushion the impact of the transaction and strengthen M&S's

...LONDON (S&P Global Ratings) March 1, 2019--S&P Global Ratings said today that the joint venture between Marks & Spencer PLC (M&S; ###-/Negative/A-3) and Ocado Group PLC could help M&S enhance its competitive standing in the long term, and will have limited impact on its immediate credit quality. Ocado is the U.K.'s leading online grocer, and M&S has felt the lack of an online channel in its food division in recent years. M&S will fund its initial ú562 million cash payment for its share in the joint venture through equity and has cut by 40% its dividend for the financial year to March 31, 2019 (FY2019). The group's prudent financial policy will cushion the impact of the transaction and strengthen M&S's credit metrics in FY2019-FY2020. We consider that in the long term, this transaction could enhance M&S's competitive standing by broadening its scale and offering more-effective channel diversity and wider customer reach. In addition, M&S could benefit from higher purchasing power with its...

Bulletin