It is the first year Bolland has not received a bonus since taking over the helm from Sir Stuart Rose in 2010.
Unveiling underlying pre-tax profits down nearly 4 per cent at £623 million, he said: “Staff bonuses will not be reached by the results we have today. Therefore, no bonuses will be paid out to the whole company, including ourselves [the board].”
The latest disappointing trading follows a profit of £665.2m last year – which at the time was the lowest profit since 2009 – and three years into a turnaround programme.
The latest figures are seen as ratcheting up the pressure on Bolland, who last year received a cash and shares bonus worth £829,000 as part of full remuneration of £2.1m. The total boardroom bonus payout last year was £3m.
A discretionary bonus package for rank-and-file staff will also not be paid this time, M&S revealed. The last time shopfloor workers did not get a payout was in the 2008-9 financial year when profits slumped in the recession. Last year, they got £215 each.
The news came as M&S said that responding to rivals’ promotions and markdowns over Christmas squeezed profit margins in the financial year to 29 March, with like-for-like general merchandise revenues – mainly clothing – down 1.4 per cent.
It was a better performance in food, where same floorspace sales climbed
1.7 per cent. Bolland has been under pressure as the retailer’s performance has faltered, despite a £2.3 billion investment drive over the past three years, the hiring of new fashion executives and a celebrity-driven marketing push.
Michael Hewson, chief analyst at CMC Markets, said the company’s malaise – with rival Next overtaking it in earnings earlier this year – “has once again prompted shareholders to ask questions about the pace of the latest turnaround strategy”.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “The wait for a material turnaround at M&S continues. A third consecutive annual decline in profits has been reported, whilst profit guidance for the year ahead is marginally disappointing.
“Homeware sales are still challenged, despite the recovery in the UK housing market, while the group’s push overseas has yet to convince, given the difficulties which other retailers such as Tesco have now run into.”
Bolland admitted that the performance of general merchandise, while improving, was “not yet satisfactory”. As a result of the promotional activity gross profit margins in the division fell 1.10 per cent to 50.7 per cent, although Scots-born chief finance officer Alan Stewart said margins should lift 100 basis points in the current year.
The company’s total sales rose 2.7 per cent to £10.3 billion. There were better performances from the international division, with recoveries in Greece and the Czech Republic helping sales increase 7.3 per cent to £1.1bn and profits rise 2 per cent to £123m.
M&S.com’s sales also jumped 23 per cent. The full-year dividend is held at 17p, via a proposed final payment of 10.8p.