Marks & Spencer experienced a significant decline in profits, reporting a drop of over 55% in profit before tax for the first half of the year compared to the previous year, largely attributed to a cyber attack that occurred in April. The company’s CEO characterized the incident as an unprecedented challenge, which not only affected online sales but also disrupted in-store operations, leading to empty shelves.
As a result of the cyber attack, Marks & Spencer had to suspend its online ordering system for nearly two months, and the click and collect service was halted for about four months. The company received £100 million in insurance related to the cyber incident, approximately equal to the total costs incurred from the attack.
In its financial update for the six months ending in September, Marks & Spencer reported an adjusted profit before tax of £184 million. The firm indicated that its underlying strengths were enabling it to recover, projecting that full-year profits could align with those of the previous year. An analyst noted that, despite the challenges faced, sales in the main segments of homewares and fashion only fell by around 16%.
Judith MacKenzie, head of Downing Fund Managers, commented on the overall resilience of the business, especially considering they were offline for a large part of the trading period. Notably, food sales saw an increase of 7.8% during this period, which MacKenzie described as impressive given the company’s circumstances at the time.
Source: https://www.bbc.com/news/articles/c93x16zkl9do?at_medium=RSS&at_campaign=rss