M&S on track to re-enter FTSE 100 as recovery pays off

The results are good news for CEO Stuart Machin. Photo: Oliver Dixon

Marks & Spencer is on track to re-enter the FTSE 100 after shares jumped to a 19-month high as it showed recovery efforts are paying off.

The retailer said it expects profits to pick up this year after earlier forecasting a decline, which sent the stock up 9% on Tuesday.

It said its interim results would be «significant an improvement from previous expectations.”

The jump in its shares puts M&S on a path to a higher blue chip index in the next shuffle after its market capitalization topped £4.3bn.

This comes nearly four years after the company was removed from the FTSE 100 Index for the first time in its history as it tried to maintain profits by closing hundreds of stores.

M&S was a founding member of the FTSE 100. The FTSE 100 Index, established in 1984.

Clive Black, director of research at M&S ​​broker Shore Capital, said: «If the legs keep turning in the right direction, a rally could follow, as well as a return to the FTSE 100.»

M&S will need to be ranked at least the 90th most valuable company on the London Stock Exchange to return to the FTSE 100 in a shuffle next month. M&S shares are up more than 70% since the start of the year.

M&S reported a 6% jump in apparel and housing sales during the first 19 weeks of the fiscal year as discounts were smaller than expected. Like-for-like food sales increased by 11 percent over the same period.

The rising value of M&S shows that investors believe in the plan to revive the company, which is led by chief executive Stuart Machin.

Mr Machin insists on reversing M&S's declining clothing and goods division for home. and make them as strong as food.

In January, Kantar data showed that M&S's share of the clothing market was the highest in nearly eight years.

RBC analysts say that the business has recently benefited from «better supply and execution.»

The numbers have been boosted by M&S selling more third-party brands, including Hobbs and Jaeger, in its stores.

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At the same time, M&S is refurbishing its retail space, renovating older stores, and adding more than 100 stand-alone food halls.

It needs 180 large clothing and home goods stores compared to p. 247.

The food business was supported by the expansion of the M&S assortment, while, according to RBC analysts, «the perception of value for money has also improved.»