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RESHAPING
Marks and Spencer Group plc
Annual Report and Financial Statements 2025
Marks and Spencer Group plc Annual Report and Financial Statements 2025
OUR VISION
To be the most trusted retailer, doing the right thing for ourcustomers, with quality products at the heart of everythingwedo.
OUR PURPOSE
To bring the magic of M&S, through exceptional quality, value, service and innovation to every customer.
Whenever, wherever and however they want to shop with us.
OUR STRATEGIC PRIORITIES
Create exceptional products Drive profitable sales growth Deliver target operating margins
Build the M&S we need to be
OUR BEHAVIOURS
Close to
customers,
close to
colleagues
We say it,
we do it
We tell as
it is
We always
aim higher
We work
selflessly
Spend wise,
save well
See People and Culture on pages 32 to 35.
See Strategic Progress on pages 12 to 21.
Marks and Spencer Group plc Annual Report and Financial Statements 2025b
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Introduction
2 Highlights of the Year
3 Chairman’s Letter
4 Chief Executive’s Review
6 Our Markets
8 Our Business Model
9 Stakeholder Engagement
Strategic report
12 Strategic Progress
22 Our Key Performance Indicators
23 Financial Review
32 People and Culture
36 ESG Review
38 TCFD
51 Non-Financial and Sustainability
Information Statement
52 Risk Management
54 Principal Risks and Uncertainties
59 Our Approach to Assessing
Long-Term Viability
Governance
60 Chairman’s Governance Overview
62 Our Board
64 Our Governance Framework
66 Board Activities
68 S.172 Statement
71 Board Review
72 Nomination Committee Report
74 ESG Committee Report
76 Audit & Risk Committee Report
84 Remuneration Committee Report
87 Remuneration in Context
89 Summary of Remuneration Policy
91 Remuneration Report
104 Other Disclosures
Optimising our Annual
Report and Accounts
This year, we have made several
changes to optimise our Annual
Report and Accounts for online
viewing in response to evolving
shareholder preferences. In the
last decade, there has been a
60% increase in the number of
shareholders signed up for
e-communications.
For the best experience,
view online at corporate.
marksandspencer.com/
annualreport2025.
Alternative
performance measures
This report provides alternative
performance measures (‘APMs’)
which are notdefined orspecified
under the requirements of
UK-adopted International
Accounting Standards. Webelieve
these APMs provide readers with
important additional information
on our business.
We have included a glossary
onpages 194 to 199 which
provides a comprehensive list
ofAPMs that we use, including
an explanation of how they are
calculated, how we use them
andhow theycan be reconciled
to a statutory measure
whererelevant.
APM
Financial statements
110 Independent Auditor’s Report
122 Consolidated Financial Statements
128 Notes to the Financial Statements
183 Company Financial Statements
186 Notes to the Company Financial
Statements
192 Group Financial Record
194 Glossary and APMs
200 Notice of Annual General
Meeting2025
217 Shareholder Information
219 Index
Marks and Spencer Group plc Annual Report and Financial Statements 2025 1
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
HIGHLIGHTS OF THE YEAR
Financial Strategic
Strong financial and strategic progress in 2024/25 as M&S continues to Reshape for Growth.
Group revenue
£13.8bn
23/24: +6%
Group profit before tax
£511.8m
23/24: -23.9%
Net funds excluding
lease liabilities
£437.8m
23/24: +858%
24/25 511.8
23/24 672.5
22/23 475.7
24/25 437.8
23/24 45.7
22/23 (355.6)
Basic earnings per share
14.6p
23/24: -33.3%
Group profit before tax
andadjusting items
£875.5m
23/24: +22.2%
24/25 13.8
23/24 13.0
22/23 11.9
24/25 875.5
23/24 716.4
22/23 453.3
Adjusted basic
earnings per share
31.9p
23/24: +29.7%
24/25 14.6
23/24 21.9
22/23 18.5
24/25 31.9
23/24 24.6
22/23 16.9
APM
APM
APM
Food: volume growth
6.7%
23/24: +1.5%
Fashion, Home & Beauty: market share
10.5%
23/24: +5%
24/25 10.5%
23/24 10%
22/23 9.6%
New Full Line stores
2
23/24: 6
New Food stores
8
23/24: N/A
24/25 2
23/24 6
22/23 3
24/25 8
23/24 8
22/23 6
App percentage of online orders
54%
23/24: +22.7%
Raised for Young Minds
£2.7m
23/24: +59%
24/25 54%
23/24 44%
24/25 2.7m
23/24 1.7m
24/25 6.7%
23/24
22/23
5.2%
2.1%
Marks and Spencer Group plc Annual Report and Financial Statements 20252
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Use the QR
code to watch
Archie’s video
CHAIRMAN’S LETTER
Dear Shareholder
The business world today rarely moves in
straight lines and just as you think life has
become more predictable, events have a
way of upending the best performing team
and bringing us all back to the ground.
At the time of writing, the business has been pre-occupied
with handling the aftermath of the cyber incident that
affected us after the year end. Although the impact is
significant and will endure for some weeks, or even months,
I am confident that, in the fullness of time, M&S will
recover the formidable momentum in trading performance
we demonstrated in the last year and bounce back better
and stronger.
During the last three weeks the Executive team has been
steadfast in responding to the attack which has been all
absorbing and the Board has been fully informed and
engaged. As a result the 2024-25 results, the main
subject of this report, seem to be very historic. However,
they are important not just because they show a third
year of improvement in overall sales, market share, profit
and cash flow but also because they demonstrate the
momentum and potential in the “reshaping” strategy as it
takes hold.
Our strategy, which was born of the turnaround plans
launched some years ago, is now built around “Reshaping
for Growth”. In a business with growth in profit and no
financial debt it is hard, even for an impatient Chairman,
to argue that we are still in turnaround mode. However, it
is important that the “spirit of the turnaround” remains
with us and that is why Stuart Machin has coined the
phrase “positively dissatisfied”. It is our objective to drive
the pace of change to build the business for growth and
success now and in the next 100 years.
Our confidence in the programme derives from the fact
that there is so much in our two main businesses that still
requires investment and change: legacy systems; a
supply chain in both Food and Fashion, Home & Beauty
which is well below industry leading standards and in
some cases inefficient; an improved online performance
It is important that the
“spirit of the turnaround”
remains with us.
but one which is not best in class in the way we trade,
takeorders or fulfil for customers. All that represents
potential for the future and, because of the strength of
our trading and cash flow, we are now able to increase our
investment rate.
In both main businesses what we have demonstrated is
the power of product. Where we have launched stylish
quality fashion at great value the customer response has
been strong and our Food business is now innovating
great food with increasing focus on health and freshness.
In a retail industry where innovation has slowed, we are
investing heavily in our new formats and the management
team, talent and culture is strengthening all the time.
We operate a highly engaged Board model and I am
grateful to all Board members for their contribution.
Jeremy Townsend, who stepped in as Finance Director
three years ago, is now leaving with our great thanks. He
brought calmness and strength to the finance function
and is succeeded by Alison Dolan who joined us early in
the year.
I am confident that in a year’s time the cyber incident will
prove to have been a bump in the road along the path to
growth, even if it does not feel like that today. However,
coming on top of a very strong trading year it has
stretched the sinews of the management team and we
have seen an extraordinary response from our colleagues
in the Support Centre, in our logistics centres and
particularly in our stores.
I particularly want to recognise the efforts
ofour front-line colleagues; forthethird
yearinarow, M&Shas made arecord
investment–£95m–in store
colleague pay.
Our thanks go to them all and to our
customers,shareholders, suppliers
andpartnersforwhose support
we arevery grateful.
Yours sincerely
Archie Norman
Chairman
Marks and Spencer Group plc Annual Report and Financial Statements 2025 3
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CHIEF EXECUTIVE’S REVIEW
Three years ago, we introduced our
“Reshaping M&S for Growth” plan with the
objective of protecting the magic of M&S
and modernising the rest. Executing that
strategy has delivered a third consecutive
year of growth in sales and market share,
profit and improving return on capital.
Disciplined capital allocation and a much
stronger balance sheet have put M&S on
a robust financial footing, increasing
resilience and creating capacity for future
growth. M&S has net funds of over £400m
and we are in our best financial health for
nearly 30 years.
Our Food business had another strong year as more
customers chose to fill their trolleys with M&S food, more
often. Our continuous investment in quality, value and
innovation is paying off. We’ve outperformed the market
over the past three years and I’m confident we will
continue the momentum and grow a bigger, fresher
Foodbusiness.
In Fashion, Home & Beauty, our authoritative lead in
quality and value perception and much improved style
credentials has broadened appeal and grown market
share. This renewed strength in product gives us the
foundation to drive future growth through transforming
our end-to-end supply chain and accelerating online.
Consistent market outperformance over the past three
years demonstrates the improvements we’ve made and
I’m confident that with focused execution, we can deliver
our plan.
Overall, last year was another year of strong performance,
and there are so many opportunities still ahead of us. As
outlined at last year’s Capital Markets Day, we will continue
our plan to invest in our key growth areas: Store rotation,
supply chain and technology.
We started the new financial year as we finished the
last,with sales growth ahead of budget across both
businesses. Over the last few weeks, we have been
managing a highly sophisticated and targeted cyber-attack
which has led to a limited period of disruption. Wehave
tackled this head on with incredible spirit, teamwork and
deep sense of responsibility as we prioritised serving
ourcustomers.
It has been challenging, but it is a moment in time, and
we are now focused on recovery, with the aim of exiting
this period a much stronger business. There is no change
to ourstrategy and our longer term plans to reshape
M&Sfor growth and if anything, the incident allows us
toaccelerate the pace of change as we draw a line and
move on.
Over the last 140 years, M&S has overcome many
challenges – testament to the longevity of this brand.
This incident is a bump in the road, and we will come out
of this in better shape and continue our plan to reshape
M&S for customers, colleagues and shareholders.
I would like to thank all of our colleagues and supplier
partners for their hard work and dedication and,
importantly thank our customers. They have been
unwavering in their support, and we are incredibly
grateful for their patience and trust in M&S.
Stuart Machin
Chief Executive Officer
Marks and Spencer Group plc Annual Report and Financial Statements 20254
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Disciplined capital allocation and
amuch stronger balance sheet
have put M&S on a robust financial
footing, increasing resilience and
creating capacity forfuturegrowth.
Stuart Machin
Chief Executive Officer
Hear more from Stuart on
our financial and strategic
performance here.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 5
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FOCUS ON VALUE
What’s the trend?
•
Cost-of-living pressures continue to
be front of mind for customers which
means there is a focus on value.
OurCustomer Pulse survey shows
that customers are most worried
about rising energy bills (80%), the
cost of groceries (78%), Council Tax
(76%) and higher water bills (69%).
•
However, customers want to make
sure they are getting the best
quality for the best price. 95% of the
Collective – a community of 43,000
M&S Food customers – told us that
getting ‘good value from the products
Ichoose’ is more important than
‘choosing the cheapest product’.
•
This year, there has been a shift
towards consumers choosing to eat
at home more often. In January,
eating out in pubs and restaurants
fell by 2.1% year-on-year while sales
of food being consumed athome
has increased.
How is M&S responding?
•
M&S is committed to investing in
trusted value and reducing promotions
as part ofour ‘right price first time’
promise tocustomers.
•
In Food, prices were ‘dropped and
locked’ on key shopping list items
such as salmon fillets and fresh
soups and ‘Remarksable Value’ lines
such as potatoes and tinned
tomatoes. This helped to increase
customer value perceptions of M&S
to a 10-year high in an increasingly
promotional market.
•
The popularity of ‘Dine In’ has
increased as more customers have
looked to obtain restaurant quality
meals at home. This year, we
relaunched our Gastropub range,
and introduced the first retail
partnership with Tom Kerridge as
part of the transformation. Sales
grew by 15% with Tom Kerridge lines
delivering 7% of sales growth.
•
In January, we announced a 20%
reduction on over 100 products from
the ‘everyday essentials’ Kidswear
range. We know families want the
confidence that products are good
value but also are made well and
made tolast.
•
For the fourth year in a row, we
protected the price of our market
leading quality school uniform.
Every item is designed to bedurable
and pass the ‘hand-me-down’
quality test, and we also offer an
extended 100-day returns period on
school uniform.
OUR MARKETS
HOW M&S IS
RESPONDING TO
THE CONSUMER
ENVIRONMENT
Marks and Spencer Group plc Annual Report and Financial Statements 20256
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
HEALTH & WELLBEING
What’s the trend?
•
Health and wellbeing is high on the
agenda for customers with mental
health becoming a growing priority
for many families. Research from
Mind reveals that one in five children
and young people experience a
mental health problem eachyear.
•
Healthy diet continues to be
important to many with four out of
five of the Collective saying that
they are ‘trying to maintain a
balanced diet in order to be healthy’.
•
Customers are also more frequently
making choices to address certain
aspects of their health, with trends
from gut health to highprotein
continuing to drive interest.
Overhalf (55%) of the Collective said
they have awareness of eating to
increase brain health.
•
The trend of being increasingly more
active prevails as more people are
aiming to be more physically active
more often. Almost one in four of
the Collective said they have been
active in the past seven days, while
41% of M&S customers said that
fitness is a cornerstone of their
dailylife.
How is M&S responding?
•
We are committed to making it easier
for customers to make healthier
choices in ways that work best for
them and their families. We lead the
grocery market for health perceptions.
•
Our headline partnership with
YoungMinds, the leading mental
health charity for young people,
hascontinued to raise awareness
and much needed funds for those
struggling with their mental health.
Since the launch of the partnership
in October 2023, M&S has raised £4.4m.
•
In January, we launched the M&S
Brain Food range developed in
partnership with the British Nutrition
Foundation. The range includes 13
lines offering six key brain health
supporting nutrients that people
lack in their diets and has proven
popular with customers with 115,000
Brain Food Brain Balls being sold in
January alone.
•
In Fashion, Home & Beauty, we have
welcomed new brands including
Reebok and Puma to ‘The Sports
Editon M&S’ platform this year,
offering customers greater choice
inperformance footwear
andathleisure.
OUR MARKETS CONTINUED
MORE SUSTAINABLE CHOICES
What’s the trend?
•
Making more sustainable choices is
increasingly important to customers.
78% of UK consumers consider
sustainability an important factor
intheir purchasingdecisions.
•
Our quarterly ESG Reputation Tracker
– a survey of 20,000 consumers to
understand their views of ESG trends
and perceptions of retailers in
response to those trends – shows
usthat animal welfare, sustainable
sourcing and reducing waste continue
to be the most important ESG issues
for customers.
•
Customers are increasingly placing
greater value on animal welfare, with
85% of adults expressing trust in UK
farmers. Notably, 74% value animal
welfare in food production, up from
57% in 2023.
•
Reducing food waste is a growing
priority for customers. 84% of UK
consumers say reducing food waste
is important to them, with many
citing rising food prices as a reason
for cutting waste.
How is M&S responding?
•
Our vision is to be the most trusted
retailer, doing the right thing for our
customers, with quality products at
the heart of everything we do. Having
strong sustainability credentials plays
a key role in helping to drive our
quality perceptions and our quarterly
ESG Reputation Tracker shows that
M&S leads the market in terms of ESG
trust with consumers.
•
This year, we donated the equivalent
of 30m meals in surplus food
through
our partnership with Neighbourly,
reaching the milestone of donating
the equivalent of 100m meals over
the last decade. The partnership has
supported 4.7m people across the UK.
•
In August, we launched our online
repair service in partnership with
tailoring and repairs specialists
SOJO. Feedback from customers
who have used our service so far
shows that 82% would not have worn
the item if they had not had it
repaired, and 55% would’ve thrown
the item away or given ittocharity.
•
We go to great lengths to source and
make our products with care. We have
been a partner of Better Cotton since
2009, and all the cotton used in our
clothing is 100% responsibly sourced.
All cotton used in our Spring Summer
25 collection used fully traceable
cotton for the first time.
•
In March, our M&S Select Farm
standards were recognised as
leading the way by ‘The Business
Benchmark on Farm Animal Welfare’.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 7
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Creating value for all stakeholders
CUSTOMERS COLLEAGUES SHAREHOLDERS
SUPPLIERS PARTNERS COMMUNITIES
OUR BUSINESS MODEL
M&S is a leading British retailer, bringing exceptional quality, value,
service and innovation to our 32m customers, whenever, wherever
and however they want to shop with us. Our vision is to be the
most trusted retailer, doing the right thing for our customers,
withquality products at the heart of everything we do.
Exceptional products,
trustedbrand
M&S offers exceptional quality own-brand
products at value customers can trust. Innovation
is at the heart of the design and development of
products, which are sourced with care, through
longstanding trusted supplier partners. In Food,
quality and value perceptions are at their highest
in a decade and we have maintained our leading
position for quality and value in Fashion with style
perceptions continuing to rise.
Closer to customers
32m customers shopped with M&S this year with
96% of the UK population living within 25 minutes
of an M&S store. At the heart of a culture that is
sleeves rolled up is a focus on getting closer to
customers so we can continuously improve our
products and deliver brilliant service. M&S has
been voted the UK’s best brand (source: YouGov)
for the past three years and that is something we
never take for granted.
Closer to colleagues
Our 63,000 colleagues all have a role to play in
reshaping M&S and delivering for our customers.
They bring extraordinary passion for the business
and extensive technical expertise in areas such as
sourcing, design, product development and data &
technology. Read more on how we are driving a high
performance culture on pages 32 to 35.
Omnichannel capability
M&S has 1,053 UK-owned and franchise stores,
connected to our network of digital shopping
channels, including our Fashion, Home & Beauty
website and app, with 34% of sales now through
online channels. M&S also has a 50% investment
inOcado Retail, which has grown faster than
themarket in value and volume for the last
17consecutive four weekly periods. The business
also has a presencein32 international markets.
Strong supplier and partner
relationships
As an own-brand retailer, our strong strategic
partnerships with suppliers are essential to
delivering quality, value, style and innovation
forour customers. Our long-term, differentiated
partnerships support investment in more sustainable
solutions and give specialised capabilities.
WHAT MAKES
US M&S?
Read more about our Strategic Progress on pages 12 to 21.
Read more about our approach to ESG in our corporate.marksandspencer.com/ESGreport2025.
Marks and Spencer Group plc Annual Report and Financial Statements 20258
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
M&S
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Beauty
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STAKEHOLDER ENGAGEMENT
CUSTOMERS
Why they are important to us
If we serve our customers well, we serve our
shareholders well. Our vision is to be the most
trusted retailer, doing the right thing for our
customers, with quality products at the heart
ofeverything we do.
What we heard and how
weresponded
Closer to customers
Getting closer to customers is a core feature of the
transformation of our business. One way we do this is
through regular focus groups; Executive Committee
members run quarterly customer listening groups.
During the year, these have included:
•
Food customer focus groups. Our Food
leadership team took part in small group
discussions with some of our family shoppers
in August. Customers shared their love of our
ready meals and Dine In options for making
their lives easier whilst still offering something
healthy for their children, but also shared that
our Dine In portion sizes aren’t always suitable
for them. We’ve now introduced a family Stir Fry
Dine In, as this was one of the most popular
offers amongst this group.
•
Fashion, Home & Beauty customer focus groups.
Live focus groups for Womenswear and Menswear
were held, where customers shared their
opinions on product and shopping experience
improvements. Wealsoheld ‘Insight Fest’ in
June 2024, afullday dedicated to customers.
Over 200colleagues attended sessions, which
included a variety of nationwide customer
focus groups as well as live interviews with
customers in store about the Summer
collection. In Womenswear, customers told us
they were looking for some more ‘stand out’
occasionwear, which resulted in the launch of
our ‘RSVP’ collection this coming summer.
The Collective
This year, we sent around 200 surveys to ‘The
Collective’, our online community of 43,000 M&S
Food customers. These surveys covered general
customer mindset and specific input on category
changes. The feedback has shaped our future
strategy, including creating targeted marketing
plans, guiding major category transformations in
Frozen and Deli, and influencing other projects
such as the range of turkeys we stock at
Christmas, branding for our Roast and Ritual
coffee, and benefits for our Sparks ‘parent hood’
baby club.
c.93k
hours worked in stores by Support Centre
colleagues over Christmas
COLLEAGUES
Why they are important to us
Retail is a people business. That’s why we’re
driving a high-performance culture that is closer
to colleagues and closer to customers. Every one
of our 63,000 colleagues has a role to play in
transforming M&S.
What we heard and how
weresponded
Simple for stores
We are at the beginning of this programme but it
is a big area of focus. Store leaders told us we
needed to simplify communication, and we have
responded by continuing to utilise tools through
our partnership with WorkJam, a communication
and engagement platform. It has enabled us to
target communication to specific positions in
stores, sending tasks direct to the right
colleagues, saving valuable management time.
It’s also been beneficial for sharing product
engagement. We launched a ‘Let’s Sell’ page
across both Food and Fashion, Home & Beauty to
better share product information with colleagues.
Short videos are used to highlight product
features and benefits, helping colleagues
bringthis to life for customers in store.
Straight to Stuart
Now in its third year, the Straight to Stuart
scheme, which gives colleagues the opportunity
to share ideas direct with the CEO, saw more than
6,500 submitted this year. Around 100 of these
ideas have been progressed to make M&S a better
place to shop for our customers, and a better
place to work for our colleagues. One idea submitted
from a colleague in our Newport store led to the
launch of a range of knickers for people living
with stomas.
Christmas Elfing
As part of building a culture where everyone
issleeves rolled up, closer to customers and
closerto colleagues, Support Centre colleagues
nowspend at least seven days each year
workinginstore. The Support Centre delivered
unprecedented support to stores this year,
completing nearly 12,000 shifts and over 93,000
hours over Christmas – a 95% increase from last
year. Based on last year’s feedback from stores
that support wasn’t available during the busiest
times, we condensed support days to focus on
key trading days, ensuring assistance was
provided when it was most needed.
Read more on colleague engagement in our
People and Culture section on pages 32to 35.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 9
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STAKEHOLDER ENGAGEMENT CONTINUED
SHAREHOLDERS
Why they are important to us
Continuous engagement with both our institutional
and private shareholders builds trust and secures
their investment and support. With our large private
shareholder base, we run a tailored engagement
programme to ensure our decisions reflect
theirviews.
What we heard and how
weresponded
AGM
We are committed to leading on shareholder
engagement and continue to believe a
digitally-enabled meeting is the best way for
directors to interact with the broadest range of
shareholders. Since adopting a digital approach
in 2019, we have seen engagement levels increase
by 200%. Listening to shareholder feedback
helped shape the digital-first, hybrid format of
our 2024 meeting. 40 shareholders attended in
person while 1,806 engaged digitally with positive
feedback received on the viewing experience.
Details about our 2025 AGM can be found in the
Notice of Meeting on pages 200 to 216.
Optimising our Annual Report
In the last decade, the number of shareholders
signed up for e-communications has increased
by60%. In 2023/24 98% of our shareholders
received the report digitally versus 2% who
received a print copy. To optimise our Annual
Report and Accounts for online viewing, this year
we have taken a digital-first approach, including
moving to landscape orientation, integrating
videoand improving navigation.
Engagement with
institutionalfunds
During the year members of our Board
andInvestor Relations team met over 200
institutional funds, engaging with investors who
we estimate represent close to 40% of our issued
share capital. This year, institutions told us
long-term growth remains their top priority,
withrecognition that further investment in
storerotation, supply chain and technology is
required to enable future growth plans. Having
strengthened our balance sheet and continued
toreduce net debt in the first half of the year,
aninterim dividend of 1p per share was paid in
January 2025. The Board is recommending a
finaldividend of 2.6p per share, subject to
shareholder approval at the AGM. Read more
onpage 204.
Capital Markets Event
Our Capital Markets Event (‘CME’), held in
November 2024, gave investors the opportunity
tohear directfrom our leaders in greater depthabout
the progress made so far in our transformation
and our priorities moving forward. A new feature
of this year’s event was a ‘trade fair’ breakout
session, where 16 members of the wider leadership
team were available to answer more detailed
questions on topics ranging from ESG to supply
chain. This year, 70 investors attended in person
with the webcast having now seen over 900 views.
Use the QR
code to watch
the CME.
SUPPLIERS
Why they are important to us
As an own-brand retailer, our suppliers are
essential to making sure we deliver high-quality
products at trusted value for our customers.
These long-term strategic partnerships allow
usto invest in sustainable solutions and drive
greater innovation. Our success is closely tied to
the performance and reliability of our suppliers.
What we heard and how
weresponded
Fashion, Home & Beauty
SupplierSummit
Following the success of our 2023 Supplier
Summit, we invited 20 of our key strategic
partners back to London in October 2024 for a
follow-up summit. In the three months leading
upto the event, we collaborated closely with
suppliers on projects addressing digital
transformation, improving lead times, ethical
purchasing practices, net zero goals and
sustainability, and driving innovation. During the
event, supplier partners presented their solutions
and ideas, reinforcing our partnership and
commitment to long-term success.
International social projects
Enhancing the livelihoods of people and
communities in our supply chain is a key priority
for M&S. Following feedback from our Key Supplier
Summit in October 2024, we updated our ethical
policies and supplier guidelines and provided
internal buyer training. We also implemented
social projects focusing on women, including
financial literacy training in Cambodia and
Vietnam, gender equality programmes in
Bangladesh and Cambodia, strengthening
maternity rights in Bangladesh, and providing
education opportunities to girls in New Delhi.
200
institutional investors
engaged
20
international suppliers attended
ourFH&B SupplierSummit
Food supplier briefings
We held two supplier briefings in June and
September 2024. Suppliers were invited to hear
about M&S’ priorities for the year ahead in June,
with the September briefing focusing on peak
delivery. Trusted value, innovation, availability
and quality were the key themes of discussion.
These priorities guided our collaborative efforts
throughout the year, aiming to achieve mutually
beneficial volume growth.
Marks and Spencer Group plc Annual Report and Financial Statements 202510
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMMUNITIES
Why they are important to us
M&S serves 32m customers, has 63,000 colleagues
and operates in 32 international markets. Therefore,
we need to make sure we have a positive impact
on the communities we serve.
What we heard and how
weresponded
YoungMinds
In October 2023, we launched our new headline
charity partnership with YoungMinds, the UK’s
leading mental health charity for young people.
Since the launch, M&S has raised £4.4m, enabling
YoungMinds to support young people and the
adults in their lives. With M&S donations,
YoungMinds has improved the performance of its
Helpline services, increasing its phone call answer
rate and visits to the parents and carers section of
the website. More information on our partnership
can be found on our website.
Go to corporate.marksandspencer.com/
media/marksandspencer-youngminds.
Leading lingerie campaigns for
charity
M&S teamed up with Olympic champion Sir Chris
Hoy and Prostate Cancer UK to encourage more
men to check their risk of prostate cancer. As the UK
market leader in men’s underwear, M&S leveraged
the support of its customers and colleagues to
spark a nationwide conversation, prompting over
180,000 men to complete the online risk checker.
With £4 donated per pack of men’s Autograph
underwear, a total of £155,000 was raised for
Prostate Cancer UK during the campaign.
Additionally, during the year our Lingerie team
used insights from Breast Cancer Now (‘BCN’) in
its designs. BCN’s biannual insight report shared
scientific advancements and experiences from
individuals directly affected, helping to shape our
product design for the post-surgery range and
bra fit service.
£4.4m
raised for YoungMinds
PARTNERS
Why they are important to us
The ambition for International is to build a global
omnichannel business, which brings the magic of
M&S to customers around the world. Our franchise
and joint venture partners play a critical role in our
strategy, bringing invaluable market expertise.
What we heard and how
weresponded
Partner selling events
Our selling events for Womenswear, Menswear,
Lingerie and Kidswear, held three times a year
atour merchandising labs in White City and
Stratford, have consistently seen great
engagement. These in-person events have
facilitated numerous face-to-face discussions,
where senior leaders present business strategies
and upcoming seasonal campaigns. This year, our
first in-person Food event received excellent
feedback from partners. As a result, we have
made these twice a year, and with product
tastings and hearing more about what sets M&S
apart, partners are being bolder in buying a wider
selection of foods and buying into innovation.
International exchange programme
In February 2025, we hosted five franchise partner
colleagues at our Support Centre in London.
Thegoal was to provide our partners with
valuable insights from the UK business and give
the International team the opportunity to gain
local knowledge about key markets. During their
visit, our franchise partners shared their
perspectives, helping us to identify areas for
improvement. They also had the opportunity to
connect with customers and colleagues in UK
stores, fostering closer relationships and
enhancing collaboration.
Global strategic partner meeting
In March 2025, we hosted our first partner meeting
with our strategic franchise, wholesale and
marketplace partners. Held in Dubai, this enabled
all attending to see the M&S stores in Dubai. The
meeting was to lay out our International Reset for
Growth – with the CEO andleadership team
sharing insights on our transformation journey,
and opportunities forourInternational business.
Food convenience partner
conference
Our biannual Food Convenience Partner
Conference helps underpin our convenience
franchise partner strategy. To align with our new
retail operations programme, ‘One Best Way’,
which is delivering availability and productivity
benefits in Company-owned stores, partners were
invited to retail immersion events to support their
in-store strategy. Our conference helped deliver
trade plans, clarifying sale priorities and providing
focus areas for partnership stores. This year’s
support and guidance helped deliver over £100m
additional sales year on year, further creating an
opportunity to drive down cost for partners.
STAKEHOLDER ENGAGEMENT CONTINUED
S.172 Statement
The directors confirm that, during the year,
they have acted in good faith in a way that
best promotes the success of M&S for the
benefit of shareholders as a whole. In doing
so, they have had regard for the interests of
all M&S stakeholders, while preserving M&S’
reputation and ensuring our long-term
sustainability. Read our complete S.172
Statement on pages 68 to 70.
5
franchise partner colleagues hosted
atour London Support Centre
M&S Archive
M&S Archive, based in Leeds where our business
began, shares our unique heritage with a wide
range of customers and communities, and this
year responded to more customer enquiries
andprovided free online access to more archive
resources than ever before. Through ongoing
engagement with schools and focused teacher
consultation, the Archive met the need for
workshops to support children and young people
with special educational needs and disabilities
(SEND) by creating a new suite of learning
workshops. Pilot sessions earned glowing
feedback from students and teachers alike,
sothese specially designed sessions are now
available to more SEND groups.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 11
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS
Over the last three years, consistent execution has delivered
growth in sales, market share, margins, and return on
capital. As a result, the business has reduced net debt
byc.£900m and reinstated a dividend for shareholders.
M&S is in its best financial health for nearly 30 years.
This strong balance sheet enables us to continue to
invest to Reshape M&S, with capital expenditure of
c.£600m-£650m planned for the current year, net of
disposals. We have generated strong returns from our
store investments and are increasing the pace of store
rotation. The acquisition of Gist and changes to the
Fashion, Home & Beauty supply chain provide the
foundations to modernise the network and create
capacity for growth. Last year we started a multi-year
plan to upgrade our technology foundations and
increase digital capability. We are accelerating this plan,
making use of the recent disruption to reach our target
state more quickly.
Our strategy remains the same – to protect the magic
ofM&S, while modernising the rest.
Creating exceptional products
We aim to be the most trusted retailer, with quality products
at the heart of everything we do. M&S Food is broadening
its appeal by delivering a consistent drumbeat of innovation
and quality upgrades, while continuing to invest in
trusted value. We continue to progress towards being a
‘shopping list retailer’, focused on families, with the soul
of a fresh market.
Fashion, Home & Beauty’s commercial model of buying
more deeply into core lines, elevating quality, and increasing
style is resonating, attracting new customers. Market
share of both volume and value has increased in both
businesses, although opportunities remain for future
growth in underpenetrated categories and in Home & Beauty.
Driving profitable sales growth
Store rotation and renewal aims to create 420 bigger,
fresher Food stores and a more productive group of 180
Full Line stores, with half of the estate expected to be in
the renewal format by 2027/28. Returns on new and
renewed stores have been above our hurdle rates overall,
trading ahead of plan for three consecutive years. The
pace of new openings is being increased, securing sales
growth for the long term.
Online growth ambitions aim to increase the M&S.com
share of Fashion, Home & Beauty sales from 34% to 50%
inthe medium term. Online sales growth accelerated in
RESHAPING
FOR
GROWTH
At the October 2022 Capital Markets
Day, we set out the strategy of
reshaping M&S to deliver faster growth
and higher returns. Our objectives
included growing market share in both
UK businesses by 1% by 2027/28 and
targeting operating margins of over 4%
inFood and 10% in Fashion, Home &
Beauty, supported by structural cost
reductions of over £500m, disciplined
capital allocation and investment
within an envelope of £500-£600m
perannum.
Our strategic priorities
Create
exceptional
products
Drive
profitable
salesgrowth
Deliver
target
operating
margins
Build the M&S we need to be
2024/25 as marketing was rebalanced towards our social
channels and top tier partner brands were launched
online. Improvements to the website also supported
increased customer frequency. Our focus now turns to
improving the online offer,and experience, transforming
Fashion, Home & Beauty into a fully omnichannel
business with best-in-class delivery and returns.
International has store presence in 29 countries through a
series of strategic partnerships, which offer the potential
forglobal growth in the medium term. Recent trading
challenges, particularly in India, are being addressed under
new leadership. The International reset focuses oncapital
light growth, using the infrastructure of our franchise
partners in established markets, working withleading online
marketplaces, and identifying opportunities in wholesale.
This year, investmentin trusted value is planned and new
commercial arrangements will be established to
drivevolume.
Ocado Retail’s combination of M&S product and broad
choice supported by automated fulfilment, offers the
potential for a profitable route to market for online grocery
in the medium term. In 2024/25 active customer growth
and sales accelerated as Ocado Retail invested in value
and improved delivery service. However, the drop through
to profitability was disappointing. The near-term focus
includes improving the customer shopping experience and
optimising existing fulfilment centres todeliver increased
profitability and cash flow, before considering
investment in additional capacity. From 2025/26, the
results of Ocado Retail will be consolidated into M&S
Group reporting as technical control of the 50/50 joint
venture passes to M&S.
Delivering target operating
margins
Over the past three years the combination of driving
profitable sales growth through volume and structural
cost reductions across stores, the support centre and the
supply chain has enabled M&S to improve profitability
and has delivered operating margins of 5.4% in Food and
11.2% in Fashion, Home & Beauty, ahead of our targets.
This in turn has allowed the businesses to reinvest in
quality and value, further driving volume growth.
Structural cost reductions of c.£300m have been made
over the past three years, with £120m being delivered
in2024/25. More than half of last year’s savings were
generated in stores, through investment in technology
andimprovement in store processes.
Marks and Spencer Group plc Annual Report and Financial Statements 202512
STRATEGIC REPORTSTRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Food supply chain volumes have increased more than 11%
over the past three years putting pressure on operations.
This is being addressed through in-store processes, the
completion of forecasting, ordering and allocation
systems and partnering with strategic suppliers. The
acquisition of Gist has also delivered improved logistics
service and a contribution of more than £60m to profit
which provides the foundations for a long-term investment
to modernise the network and create efficient capacity
for growth. This year will see the first steps with
construction of a new depot near Bristol.
Fashion, Home & Beauty’s supply chain transformation
programme is still in its early stages, having taken initial
steps to consolidate the supply base and deliver cost
savings from investment in new warehouse capacity.
Under John Lyttle’s leadership, there will be increased
focus on restructuring the end-to-end operation, which
includes the adoption of a new merchandise and range
management system, increased automation in the
logistics network to support more profitable online
growth, and improving the resilience and flexibility of
thesupply base.
Continued simplification of store operations and the
support centre plus investments in automation and
efficiency provide scope for further cost savings.
Building the M&S we need
tobe
Reshaping M&S is underpinned by three programmes
which aim to create a high-performance customer-centric
culture, enable better decisions and service through
strong digital and technology foundations and deliver
value to shareholders through investment in growth,
combined with disciplined capital allocation.
We are creating a highly talented team who are close
tocustomers and front-line colleagues, taking accountability
for delivery and continuous improvement. This includes
identifying high-potential colleagues for leadership
development taking on bigger or broader roles in the
future. However there remains more to do to simplify
processes and reduce tasks for stores, to enable better
customer service.
In 2023, a strategic review of digital and technology was
initiated, which identified that although there had been
significant investment in digital applications and data
development, work was required to improve the tech
stack, reduce reliance on outsourcing and to integrate
better into the business areas. In early 2024, Rachel
Higham was recruited to lead Digital & Technology as a
member of the Executive Committee. At the Capital
Markets Day, we outlined the need for investment in
upgrading technology infrastructure which has over time
increased running costs and made processes complex
and inefficient.
In the light of the recent cyber incident, we are using the
disruption to bring forward investment, rephasing the
original programme, accelerating plans to upgrade
infrastructure and network connectivity, store and
colleague technology, and supply chain systems. This will
reduce the inter-dependency of systems and improve
operational resilience. Our overall aim remains the same,
to improve technology foundations, simplify infrastructure
and applications, to increase resilience further, and lower
technology run costs.
Strong balance sheet
andgrowing dividend
Our disciplined capital allocation and investment
framework prioritises investment in growth, alongside
free cash flow. Over the past three years the generation
of free cash flow, reduction in gross and net debt and
delivery of improved return on capital has in turn led to
an upgraded credit rating from both S&P and Moody’s.
A strong balance sheet enables additional investment
and we are increasing capital expenditure net of
disposals to c.£600m-£650m in 2025/26, of which
£200m-£250m will be invested in further improving
technology infrastructure, planned store maintenance
and upgrades to the logistics fleet and network. Growth
and cost-out investment is expected to be £400m-£450m,
which includes increased new store openings and supply
chain capacity. Investment will also be made in the new
Fashion, Home & Beauty planning platform which connects
all activities from buying to replenishment to deliver
ourcustomers an improved and personalised
shoppingexperience.
The improved performance and balance sheet give us
confidence in the prospects for medium-term growth,
and we are announcing an increase in the dividend of 20%.
This results in a proposed final dividend of 2.6 pence and a
full year dividend of 3.6 pence for 2024/25. We expect the
interim dividend for 2025/26 to be one third of the prior
year total. A strong balance sheet, cash flow performance,
and dividend cover allow for growth of returns to
shareholders in the medium term.
Update on cyber incident
As set out in the Company’s announcements on 22 and
26 April and 13 May 2025, M&S has been the subject of a
sophisticated cyber incident. We reacted swiftly to contain
the threat, working alongside external cyber security
experts to protect our data and systems. This included
mobilising our established Business Continuity and incident
management plans which are underpinned by an
experienced crisis and incident management team. Since
the incident, protecting our customers and the business
has been our main priority and at the same time we have
been progressively restoring our networks and systems
including the rebuilding of certain applications and file
systems where they were not recoverable. This work
isongoing.
In addition to restoring networks and systems, we are
accelerating the Digital & Technology transformation
plans, set out in our Capital Markets Day of November
2024 to reinforce our cyber defences and provide greater
resilience in the event of a subsequent attack.
Our estimate of the impact of the incident is very much
ongoing, however, based on our latest assessment
oftheexpected financial consequences, our current
expectation is an impact on Group profit of around
£300m for 2025/26, which will be reduced through
management of costs, insurance and other
tradingactions.
As previously announced, we have engaged a number
ofspecialist organisations to help us respond to the
incident and to assist with system restoration, as well
aswith wider network security. We expect to recognise
sizeable costs relating to the incident presented separately
as an adjusting item within with 28 March 2026 results.
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 13
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
SUSTAINS VOLUME
GROWTH WITH
CONSISTENT
INVESTMENT IN
QUALITY, VALUE
ANDINNOVATION
Food sales increased 8.7%, with like-for-like growth of
8.6%, driven by UK volume growth of 6.7%, with strong
growth in core categories. Market share was up 27bps
to3.9% for the 52 weeks to 23 March 2025. Adjusted
operating profit margin increased to 5.4% from 4.7%
dueto sustained volume growth, and with cost reduction
initiatives largely offsetting operating cost inflation.
Strategic KPIs:
Food
Market share increased to
3.9%
23/24: 3.7%
Perception for value
6
23/24: 2
Perception for quality
71
23/24: 69
Food
Marks and Spencer Group plc Annual Report and Financial Statements 202514
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Building a shopping list retailer
•
Prices were ‘dropped and locked’ on key shopping
list items such as salmon fillets and fresh soups and
Remarksable Value lines such as potatoes and tinned
tomatoes. This helped to increase customer perception
of M&S value for money to a ten year high, in an
increasingly promotional market.
•
Product quality was upgraded on over 1,000 lines such
as Indian meals, Gastro and Pizza as partners invested
in improved capabilities, widening the M&S quality
premium to peers. Sales of ‘Dine-In’ meals also grew, as
customers increasingly see M&S as a an alternative to
eating out.
•
More than 1,400 new lines were launched, creating a
consistent drumbeat of innovation during the year,
driving increased customer interest and frequency.
‘Viral’ product hits have included pistachio crème,
lemon hot cross buns and in-store bakery cookies.
•
As a result, larger basket shops grew 13% as customers
chose M&S for more of their everyday shopping.
New stores generating returns ahead
ofhurdle rates
•
During 2024/25 six Food stores and two Foodhalls in
Full Line stores opened. These averaged c.15,000 sq ft,
enabling more customers to shop the full range. In a
strong year, Food sales outperformed target by c.20%.
•
Nine new renewal stores and one extension traded
ahead of target, with renewal stores including
Chancery Lane and Fosse Park. Food sales in
Chancery Lane were up c.35% on previous levels.
•
A further nine Food stores and two extensions are
planned for 2025/26, including Fulham, Putney
andClapham.
Developing a trading model which
sustains growth
UK Food volumes have grown 11% over the past
threeyears, putting pressure on operations. This is
beingaddressed through a series of changes to create
amore modern, cost-effective flow of product.
•
Long-term supplier agreements are being
implemented across partner sites, with the aim to
increase this in 2025/26. This protects the ‘magic’ of M&S
Food enabling investment in upgrading capacity, while
generating savings which can be re-invested in quality
and value.
•
The roll out of the new forecasting and ordering system
was completed. This helps to better match supply to
variable demand, although there is further opportunity
for improvement.
•
The ‘One Best Way’ retail operations programme is
helping to improve productivity, reducing stock file
errors and making the new forecasting system
moreeffective.
•
Capacity constraints mean that many stores do not
receive their deliveries from the most efficient site.
Tosupport growth, work is underway on a new
multi-temperature depot in Bristol and to identify
asite foranew national distribution centre.
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 15
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
BECOMING A
DESTINATION FOR
QUALITY, VALUE
ANDSTYLE
Fashion, Home & Beauty sales increased 3.5%, with LFL
sales up 4.4%. Sales grew 4.7%, adjusted for theexit of
furniture in 2024. Market share was up 57 bps to 10.5% for
the 52 weeks to 30 March 2025. Adjusted operating profit
margin was above target at 11.2% compared with 10.7% last
year, as investments in digital and technology were partly
offset by improved sourcing and cost savings.
Strategic KPIs:
Fashion, Home
& Beauty
Market share increased to
10.5%
23/24: 10.0%
Perception for style
34%
23/24: 29%
Perception for value
45%
23/24: 43%
Fashion, Home & Beauty
Marks and Spencer Group plc Annual Report and Financial Statements 202516
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Increased style driving broader appeal
•
Perceptions of quality and value increased further and
remain market leading. M&S is now ranked second for
style compared with sixth in 2022.
•
Women’s and men’s grew in categories such as jeans,
knitwear and tops with strong seasonal campaigns and
collaborations helping to drive style perceptions.
•
Autograph sales grew 47% as customers invested in
higher quality, versatile products at the top end of the
range. Men’s Autograph sales of c.£200m compare with
just £50m three years ago.
•
In a declining kidswear market, there was growth in
baby and market share growth in kids casual. A ‘first
price, right price’ approach is being implemented,
removing promotions and offering competitive prices
on everyday essentials.
•
Home saw good growth in collaborations such as Kelly
Hoppen, and beauty grew own brand fragrance sales.
Both offer significant potential for long-term growth
and are being refocused under new leadership.
Early improvements to online but
further improvement required
•
Online sales, adjusted for the exit of furniture represented
34% of sales. Growth was driven by active customer
growth of 9% to 10.2m, as marketing was refocused
towards brand and social channels.
•
Improvements to the offer included upgraded imagery,
navigation and availability in smaller sizes.
•
Partner brand fashion sales online increased 42%.
Recent top tier brand additions have included Hush,
Tommy Hilfiger and Calvin Klein. The overall brands
business exceeded £200m sales for the first time
in2024/25.
•
There remains a lot more to do to create a market-leading
online business. Further work is needed in planning,
ranging, in-store selling, delivery and fulfilment to
drive online towards an ambition of 50% ofFashion,
Home & Beauty sales in the medium term.
New Full Line stores generating returns
ahead of hurdle rates
•
During 2024/25 two new Full Line stores at Dundee and
Washington Galleries opened with their Fashion, Home
& Beauty sales trading 15% ahead of plan. Fosse Park
was extended during the year, with Fashion, Home &
Beauty trading up 20% versus last year.
•
The Battersea Fashion only trial store opened in
December 2024, generating strong customer and
partner interest and will provide inspiration for future
renewal stores, including The Pantheon on Oxford Street.
•
Two Full Line flagships are planned for 2025/26. They
are the relocation of Bath and the opening of Bristol
Cabot Circus.
STRATEGIC PROGRESS CONTINUED
Increasing focus on operational
efficiency
As product appeal increases in Fashion, Home & Beauty,
the business remains constrained by its legacy supply
chain and outdated processes with the programme to
modernise the supply chain in its very early stages.
JohnLyttle will increase the focus on execution in 2025/26.
•
Creating long-term sourcing partnerships. This will
enable investment in capacity and capability for future
growth and help capitalise on emerging opportunities
to find new sources of supply.
•
Implementing a new planning platform to link all
buying activities from budgeting to replenishment,
removing duplicative manual activities.
•
Investing in efficient storage and automation in the
logistics network. This will increase capacity to serve
online orders, improve service and reduce costs.
•
A focus on better in-store processes, identifying and
removing unnecessary tasks to mitigate the impact of
increased costs in a flat market for store sales.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 17
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
RESETTING AND
REFOCUSING FOR
GROWTH
The ambition for International is to build a global
omnichannel business, which brings the magic of M&S
tocustomers around the world. Utilising the expertise
and infrastructure of strategic franchise partners in
established markets, working with leading marketplaces
to drive online growth, and securing new opportunities
inwholesale.
International
Marks and Spencer Group plc Annual Report and Financial Statements 202518
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Sales were down 7.1% at constant currency, although
performance started to improve in the second half.
Owned sales were down 8.0% driven by weak trading in
India. Franchise sales were down 5.2% driven by partner
de-stocking in Fashion, Home & Beauty, although this
waspartly offset by growth in Food.
Operating profit before adjusting items was slightly
downversus last year at £46.3m (margin 7.0%) from
£47.8m (2023/24: 6.6%), with an improved result in
thesecond half.
Future growth potential through
investment in value and expanded
partnerships
•
The joint venture in India is being reset under new
leadership, shifting to a full price trading approach
andstarting to reduce costs.
•
Initial investment in trusted value in owned markets has
generated encouraging results. In the coming months,
this will be expanded into franchise markets, alongside
updated commercial terms and operating principles.
•
We aim to grow the marketplace business in Europe
using partners established fulfilment capabilities to
improve customer service.
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 19
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC PROGRESS CONTINUED
DELIVERS STRONG
VOLUME GROWTH,
LOSSES REDUCED
INTHE YEAR
During 2024/25 M&S accounted for its share of results in
the joint venture as an associate interest. From 2025/26
Ocado Retail Limited will be consolidated in the results of
M&S in accordance with the joint venture agreement and
will align with the year-end accounting period of M&S.
These results therefore cover the 57 weeks to 6 April 2025
and include an M&S Group share of adjusted loss of £28.7m.
Ocado Retail
Marks and Spencer Group plc Annual Report and Financial Statements 202520
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
To aid future comparability, all commentary below
relates to the 12-month period ended 30 March 2025.
•
Revenue increased 15.5% to £2.8bn, with orders up 15.2%,
supported by growth in active customers and increased
frequency. Average selling price was broadly level, as
Ocado Retail invested in value through ‘Big Price Drops’
and the Ocado Price Promise.
•
M&S sales volumes increased 20.2% and were 30.3%
oftotal Ocado volumes (2023/24: 29.0%). M&S sales
participation was c.50% in fresh categories such as
produce and poultry.
•
The overall result continued to be constrained by
highservice delivery costs and continuing lease and
technology fees for the old Hatfield site. There remains
substantial opportunity for improved customer
fulfilment centre (CFC) productivity.
In the year ahead, there will be increased focus on
improving delivery efficiency and maximising capacity
utilisation of the existing network, which is critical to
improving productivity and profitability before investing in
new capacity. This includes migration to the Ocado Smart
Platform (OSP) solution across e-commerce, last-mile,
supply chain, customer hub and trading systems.
STRATEGIC PROGRESS CONTINUED
STRATEGIC PROGRESS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 21
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
OUR KEY PERFORMANCE INDICATORSOUR KEY PERFORMANCE INDICATORS
Group revenue
£13.8bn
23/24: +6.0%
Group statutory revenue was
£13.8bn, an increase of 6% vs
2023/24. This was driven by Food
sales up 8.7% and Fashion, Home &
Beauty sales up 3.5%.
24/25 13.8
23/24 13.0
22/23 11.9
21/22 10.9
Adjusted return on capital
employed (adjusted ROCE)
16.4%
23/24: +16.3%
Adjusted return on capital
employed increased to 16.4%, up
16.3% vs 2023/24.
Group profit before tax
andadjusting items
£875.5m
23/24: +22.2%
Group profit before tax and
adjusting items was £875.5m,
up22.2% vs 2023/24.
Group profit before tax
£511.8m
23/24: -23.9%
Group profit before tax was
£511.8m, down 23.9% on 2023/24.
Adjusted basic earnings
per share (EPS)
31.9p
23/24: +29.7%
Basic earnings per share
14.6p
23/24: -33.3%
Dividend per share declared in
respect of the year
3.6p
23/24: +20%
Free cash flow from
operations
£443.3m
23/24: +1.3%
443.3
437.8
181.9
APM APM
APM APM
Adjusted basic earnings per share
was 31.9p due to higher adjusted
profit year on year.
Basic earnings per share was 14.6p. The improved performance and
balance sheet results in a proposed
final dividend of 2.6p and a full
year dividend of 3.6p for 2024/25.
The business generated free cash
flow from operations of £443.3m,
ayear-on-year increase of £5.5m.
24/25 24/25 24/2516.4 875.5 511.8
23/24 23/24 23/2414.1 716.4 672.5
22/23 22/23 22/2310.6 453.3 475.7
21/22 21/22 21/2212.2 509.7 391.7
24/25 31.9
23/24 24.6
22/23 16.9
21/22 16.2
24/25 24/25 24/2514.6 3.6
23/24 23/24 23/2421.9 3.0
22/23 22/23 22/2318.5 0.0
21/22 21/22 21/2210.7 0.0 745.2
Marks and Spencer Group plc Annual Report and Financial Statements 202522
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW
FINANCIAL REVIEW
Delivery of sustained and
consistent free cash flow
provided balance sheet
capacity,combined with
furtherimprovement to return
on capital employed from our
key strategic investments.
Jeremy Townsend
Chief Financial Officer
52 weeks ended
29 Mar 25
£m
30 Mar 24
Restated
£m
1
Change vs
23/24
%
Group statutory revenue 13,816.8 13,040.1 6.0
Group sales 13,914.3 13,109.3 6.1
Food 9,021.0 8,298.8 8.7
Fashion, Home & Beauty 4,235.3 4,091.4 3.5
International 658.0 719.1 (8.5)
Group operating profit before adjusting items 984.5 838.6 17.4
Food 484.1 388.4 24.6
Fashion, Home & Beauty 475.3 437.5 8.6
International 46.3 47.8 (3.1)
Share of result in Ocado Retail Limited
2
(28.7) (37.3) 23.1
M&S Financial Services / Other 7.5 2.2 n/a
Net interest payable on lease liabilities (110.2) (110.5) 0.3
Net financial interest 1.2 (11.7) n/a
Profit before tax and adjusting items 875.5 716.4 22.2
Adjusting items (363.7) (43.9) n/a
Profit before tax 511.8 672.5 (23.9)
Profit after tax 291.9 425.2 (31.3)
Adjusted basic earnings per share 31.9p 24.6p 29.7
Basic earnings per share 14.6p 21.9p (33.3)
Dividend per share 3.6p 3.0p 20.0
Net debt (1,789.6) (2,165.8) n/a
Net funds excluding lease liabilities 437.8 45.7 n/a
Group capex and disposals (458.6) (423.2) 8.4
Free cash flow from operations 443.3 437. 8 n/a
Adjusted return on capital employed 16.4% 14.1% 2.3pts
1 Results of Republic of Ireland (ROI) have been reclassified from the International segment to be reported within
FoodandFashion, Home & Beauty.
2 Share of result in Ocado Retail Limited relates to the 57 weeks to 6th of April 2025.
There are a number of non-GAAP measures and alternative profit measures (APMs) discussed within this announcement,
and a glossary and reconciliation to statutory measures is provided at the end of this report. Adjusted results are consistent
with how business performance is measured internally and presented to aid comparability of performance. Refer to the
adjusting items table on page 27 for further details.
Use the QR
code to watch
Jeremy’s video.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 23
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Group results
Group sales were £13,914.3m. This was an increase of 6.1% versus 2023/24, driven by Food
sales up 8.7% and Fashion, Home & Beauty sales up 3.5%. Statutory revenue in the period
was £13,816.8m, an increase of 6.0% versus 2023/24.
The Group generated profit before tax and adjusting items of £875.5m compared with
£716.4m in the prior year. The results of Republic of Ireland (ROI) have been reclassified
from the International segment to be reported within Food and Fashion, Home & Beauty
and the prior year restated.
Adjusting items were a net charge of £363.7m, compared with £43.9m in the prior year.
The net charge in the period primarily consists of an impairment charge of £248.5m
recognised in relation to the value of the investment in Ocado Retail, costs relating to
the UK store rotation plans, and the M&S Financial Services transformation, partially
offset by a credit relating to a legal settlement.
As a result, the Group generated a statutory profit before tax of £511.8m, compared with
£672.5m in the prior year.
Adjusted basic EPS was 31.9p, up 29.7% on 2023/24 reflecting higher adjusted profit in the
period. Basic EPS was 14.6p, down 33.3% on 2023/24, reflecting reduced profit in the period.
A final dividend of 2.6p per share has been declared, payable on 4 July 2025.
For full details the Group’s related policy and adjusting items, read more in notes 1 and 5
in the financial statements.
Food – UK and ROI
Food sales increased 8.7%, with like-for-like sales up 8.6%, driven by volume growth in
core categories, continued quality upgrades, and weekly innovation. Sales growth in Q1
and Q4 was adversely impacted by the absence of Easter during 2024/25.
Change vs 23/24 % Q1 Q2 Q3 Q4 FY
Food 5.6 10.6 8.7 10.0 8.7
Food like-for-like sales 4.7 10.3 8.9 10.6 8.6
M&S Food has an online grocery presence with Ocado Retail. Ocado Retail’s sales to
customers are reported by Ocado Group and are not included within these numbers.
52 weeks ended 29 Mar 25 30 Mar 24
Change vs
2023/24
%
UK Transactions, m (average/week) 10.5 9.7 8.2
UK Basket value inc VAT (£) 16.2 15.9 1.9
Sales growth was driven by volume growth as the number of transactions and frequency
of shop increased. UK basket value was up, with the number of larger basket shops up 13%.
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
Change vs
2023/24
%
Sales 9,021.0 8,298.8 8.7
Operating profit before adjusting items 484.1 388.4
24.6
Adjusted operating margin 5.4% 4.7%
69 bps
Operating profit before adjusting items was £484.1m compared with £388.4m in
2023/24, with an adjusted operating margin of 5.4% versus 4.7% last year.
Gross margin decreased 0.1% pts as investment in value and quality was largely offset
by cost reductions from sourcing programmes.
Operating costs increased 5.4%, which was lower than sales growth of 8.7%, resulting in
operational cost leverage of 0.8% pts.
Operating cost increases in the year related to:
•
Retail investment in colleague pay and in store services, partly offset by structural
cost savings
•
Supply chain investment in colleague pay and costs associated to additional volumes
offset by structural cost savings and efficiencies
•
Increased investment in core infrastructure in digital and technology
•
Central costs were broadly level on the year
Operating profit margin before adjusting items %
2023/24 4.7
Gross margin (0.1)
Retail costs 0.5
Logistics —
Digital & Technology (0.1)
Central costs 0.4
2024/25 5.4
Marks and Spencer Group plc Annual Report and Financial Statements 202524
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Fashion, Home & Beauty – UK and ROI
UK and ROI Fashion, Home & Beauty sales increased 3.5%, with like-for-like sales up
4.4%. Strong Q2 and Q4 sales were driven by seasonal campaign performance,
supported by investment in improved customer experience online.
Change vs 23/24 % Q1 Q2 Q3 Q4 FY
Fashion, Home & Beauty
sales
1
1.3 8.1 1.0 4.7 3.5
Fashion, Home & Beauty
like-for-like sales 1.4
9.3 1.9 5.9 4.4
Fashion, Home & Beauty
online sales 5.8
16.5 6.1 7.3 8.8
Fashion, Home & Beauty
store sales (0.7)
4.2 (1.5) 3.4 1.0
Fashion, Home & Beauty
statutory revenue 953.7 1,029.8 1,274.8 879.5 4,137.8
1 ‘Sales’ are statutory revenue plus the gross value of consignment sales ex. VAT.
To enable greater insight into these movements, further detail is provided on the
performance of each channel in the UK.
Online
52 weeks ended 29 Mar 25 30 Mar 24
Change vs
2023/24
%
Active customers (m)
1
10.2 9.4 8.5
Frequency
2
3.8 3.5 8.6
Transactions (m) 38.5 33.2 16.0
Average Basket value (£)
3
60.7 60.9 (0.3)
Returns Rate (%)
4
33.8 31.3 2.5% pts
1 Active customers is the count of unique customers who transacted online in the last 52 weeks.
2 Frequency is the count of purchasing transactions divided by customers.
3 Prior year average basket value has been restated to reflect alternative source data as a result of cookie
compliance tracking.
4 Returns rate represents returns on dispatch sales.
Online sales were driven by customer growth and increased frequency as we invested in
upgrading the website experience and increased brand and social marketing. This was
partly offset by increased returns reflecting continued growth in trend-led products
and partner brands.
Stores
52 weeks ended 29 Mar 25 30 Mar 24
Change vs
2023/24
%
Transactions, m (average/week) 1.8 1.8 —
Average basket value inc. VAT pre returns (£) 39.5 39.2 0.8
Fashion, Home & Beauty store sales increased in a declining market, with good growth in
retail parks and shopping centres, supported by three new stores opened in 2024/25:
Dundee, Washington Galleries and Battersea.
Total Fashion, Home & Beauty
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
Change vs
2023/24
%
Sales 4,235.3 4,091.4 3.5
Operating profit before adjusting items 475.3 437.5
8.6
Adjusted operating margin 11.2% 10.7% 53 bps
Operating profit before adjusting items was £475.3m compared with £437.5m in 2023/24,
with an adjusted operating margin of 11.2% compared with 10.7% last year.
Gross margin increased 1.2% pts, driven by better buying and currency-related gains,
which more than offset supplier labour cost headwinds.
Operating costs increased 5.1%, which was higher than sales growth of 3.5%, resulting in
operating cost deleverage of 0.7% pts.
Operating cost increases in the year related to:
•
Logistics costs associated with growth in online orders
•
Investment in core infrastructure in digital and technology
•
Increased central costs in marketing, website improvements and transformation
Conversely, retail costs decreased in the year as investment in colleague pay was offset
by cost savings.
Operating profit margin before adjusting items %
2023/24 10.7
Gross margin 1.2
Retail costs 0.8
Logistics (0.2)
Digital & Technology (0.6)
Central costs (0.7)
2024/25 11.2
Marks and Spencer Group plc Annual Report and Financial Statements 2025 25
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Total Fashion, Home & Beauty continued
Within these results, store margin increased 1.3% pts to 13.1% while online margin declined
0.8% pts to 7.5%, reflecting the investment in online and customer experience.
International
International sales decreased by 8.5% (7.1% at constant currency). This was driven by
lower Fashion, Home & Beauty shipments following actions taken to reduce stock levels
by franchise partners and ongoing challenging trading conditions in owned stores in India.
Adjusted operating profit declined due to the reduction in sales, partially offset by
improved cost control in owned markets in H2.
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
Change vs
2023/24
%
Change vs
2023/24 CC
%
International
Sales 658.0 719.1 (8.5) (7.1)
Operating profit before adjusting items 46.3 47.8 (3.1) (2.0)
Adjusted operating margin 7.0% 6.6% 39 bps 37 bps
Ocado Retail Limited
The Group holds a 50% interest in Ocado Retail Limited (Ocado Retail). The remaining
50% interest is held by Ocado Group Plc (Ocado Group). Results for Ocado Retail are
currently reported by Ocado Group and are not consolidated in this release.
From 2025/26 Ocado Retail Limited will be consolidated in the results of M&S in
accordance with the joint venture agreement and align with the year-end accounting
period of M&S. These results therefore relate to the 57 weeks to 6 April 2025 and include
an M&S Group share of adjusted loss of £28.7m.
There will be no change in the economic interest of both shareholders in Ocado Retail
Limited, or any consideration paid by the Group, as a result of the change.
Revenue increased by £621.6m in the 57 weeks to 6 April 2025. This was driven by active
customer growth and higher frequency, whilst average selling price remained broadly level.
57 weeks
ended
6 Apr 25
£m
53 weeks
ended
3 Mar 24
£m
Change vs
2023/24
£m
Revenue 3,091.9 2,470.3 621.6
Adjusted EBITDA 62.0 26.8 35.2
Adjusting items
1
(20.8) (61.1) 40.3
Depreciation and amortisation (65.6) (61.2) (4.4)
Operating loss (24.4) (95.5) 71.1
Net interest charge (37.0) (30.3) (6.7)
Taxation — (7.9) 7.9
Loss after tax (61.4) (133.7) 72.3
M&S 50% share of loss after tax (30.7) (67.0) 36.3
Reported in M&S Group adjusted profit before tax (28.7) (37.3) 8.6
Reported in M&S Group adjusting items (2.0) (29.7) 27.7
1 Adjusting items are defined within the Ocado Group Plc Annual Report and Accounts 2024.
Adjusted EBITDA increase was driven by revenue growth ahead of operational costs,
partly offset by lower gross margin.
Adjusting items primarily relate to Ocado Retail’s transition to the OSP platform. There
is a £4.0m charge relating to the ceasing of operations at Hatfield which is reported as
an adjusting item in M&S Group’s share of Ocado Retail results.
Net interest charge increased, partly reflecting a higher interest expense on loans from
shareholders, of which the M&S share is reported in the Group’s finance income (£8.5m
in 2024/25, £6.0m in 2023/24).
Last year there was a tax charge of £7.9m, driven by the write-off of a deferred tax asset.
Overall Ocado Retail reported a loss after tax of £61.4m. M&S group share was a loss of
£30.7m, which is reported in M&S Group profit before tax.
M&S Financial Services
M&S Financial Services generated a profit before adjusting items of £7.0m (H1: £8.2m),
this full year performance compares with £2.2m in 2023/24. Profit reduced in the second
half reflecting the one-off costs as we transfer our Travel Money business from HSBC
toEurochange.
Details of the M&S Bank transformation and insurance mis-selling provisions can be
found in adjusting items.
Marks and Spencer Group plc Annual Report and Financial Statements 202526
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Net finance cost
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
Change vs
2023/24
£m
Interest payable (45.9) (53.3) 7.4
Interest income 54.9 52.3 2.6
Net interest receivable/(payable) 9.0 (1.0) 10.0
Unwind of discount on Scottish Limited Partnership
liability (1.4) (4.1)
2.7
Unwind of discount on provisions (6.4) (6.6) 0.2
Net financial interest 1.2 (11.7) 12.9
Net interest payable on lease liabilities (110.2) (110.5) 0.3
Net finance cost before adjusting items (109.0) (122.2) 13.2
Adjusting items included in net finance cost (3.5) 80.5 (84.0)
Net finance cost (112.5) (41.7) (70.8)
Net finance cost before adjusting items decreased £13.2m to £109.0m. This was driven
by reduced interest payable as a result of the repurchase of medium-term notes and
increased interest income on cash and current financial assets.
Adjusting items within net finance costs decreased primarily due to last year’s
remeasurement of Ocado Retail Limited contingent consideration and reduced net
pension finance income.
Group profit before tax and adjusting items
Group profit before tax and adjusting items was £875.5m, up 22.2% on 2023/24.
Theprofit increase was primarily due to growth in the Food and Fashion, Home & Beauty
businesses with reduced share of group losses in Ocado Retail.
Group profit before tax
Group profit before tax was £511.8m, down 23.9% on 2023/24. This includes a net charge
for adjusting items of £363.7m (2023/24: charge of £43.9m).
Adjusting items
The Group makes certain adjustments to statutory profit measures in order to derive
alternative performance measures (APMs) that provide stakeholders with additional
helpful information and aid comparability of the performance of the business. For
further detail on these (charges)/gains and the Group’s policy for adjusting items, please
see notes 1 and 5 in the financial statements. These (charges)/gains are reported as
adjusting items on the basis that they are significant in quantum in current or future
years and aid comparability from one period to the next.
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
Change vs
2023/24
£m
Included in share of result of associate – Ocado
Retail Limited (14.9) (42.6) 27.7
Amortisation and fair value adjustments arising as
part of the investment in Ocado Retail Limited (12.9) (12.9) —
Ocado Retail Limited – UK network capacity review (2.0) (29.7) 27.7
Included in operating profit (345.3) (81.8) (263.5)
Strategic programmes – Store estate (84.4) (93.0) 8.6
Strategic programmes – International reset (20.6) — (20.6)
Strategic programmes – Digital & Technology
transformation (10.2) — (10.2)
Strategic programmes – Organisation — (3.5) 3.5
Strategic programmes – UK Logistics — 5.3 (5.3)
Strategic programmes – Furniture simplification 11.1 (18.3) 29.4
Store impairments, impairment reversals and other
property charges 2.3 35.1 (32.8)
Impairment of investment in Ocado Retail Limited (248.5) — (248.5)
M&S Bank transformation and insurance mis-selling
provisions (15.5) ( 7.0) (8.5)
Acquisition of Gist Limited — (0.4) 0.4
Legal Settlement 20.5 — 20.5
Included in net finance income/(costs) (3.5) 80.5 (84.0)
Pension net finance income 4.1 24.0 (19.9)
Remeasurement of Ocado Retail Limited
contingent consideration — 64.7 (64.7)
Net finance costs incurred in relation to Gist
Limited deferred and contingent consideration (7.6) (8.2) 0.6
Adjustments to profit before tax (363.7) (43.9) (319.8)
Adjusting items recognised were a net charge of £363.7m. These include:
A non-cash charge of £12.9m with respect to the amortisation of intangible assets
acquired on the purchase of our share in Ocado Retail.
A charge of £2.0m included within the share of result in associate. This reflects the
group share of costs relating to the ceasing of operations at Ocado Retail’s Hatfield CFC
and wider network review.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 27
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Adjusting items continued
A charge of £84.4m in relation to store estate rotation plans. This reflects the revised
view of store exit routes, assumptions, estimated closure costs, charges relating to the
impairment of buildings, fixtures and fittings, and accelerated depreciation.
A charge of £20.6m in relation to one-off charges related to contractual obligations due
to the closure of European distribution centres, and the write off of certain assets no
longer required.
As part of the strategic programme to reset our Digital & Technology operating model,
a charge of £10.2m was incurred in the period, primarily relating to consultancy costs
and related structural changes.
A net credit of £11.1m has been recognised associated with the exit of the two-person
furniture delivery operation. The credit mainly reflects the settlement of the contractual
obligations with suppliers and the profit on disposal of a distribution centre.
A non-cash net credit of £2.3m in relation to store impairment reversals, driven by
revised future cash flow projections in relation to the carrying value of stores.
Ahead of the expected consolidation of Ocado Retail Limited in 2025/26, and in
accordance with the relevant accounting standards, the Group performed a valuation
exercise of Ocado Retail in the second half of the year, which triggered a full impairment
test of the Group’s existing investment. This resulted in an impairment charge of
£248.5m, which has been recognised in relation to the value of the investment.
A charge of £15.5m in relation to M&S Bank transformation and insurance mis-selling
provisions, predominately relating to the settlement of the deficit which had been
recognised by M&S Bank. Total programme costs to date are £20.5m and under the
terms of the new agreement, material charges are expected over the next six years.
The Group received a net credit of £20.5m as part of a legal settlement in relation to damages
received from an independent third party following its involvement in anti-competitive
behaviour that adversely impacted the Group.
For further details on adjusting items see note 5 in the financial statements.
Taxation
The effective tax rate on profit before tax and adjusting items was 26.7% (2023/24:
33.2%). This was higher than the UK statutory tax rate, primarily due to the impact of
non-deductible Ocado JV Losses.
The effective tax rate on statutory profit before tax was 43.0% (2023/24: 36.8%). This is
higher than the effective tax rate on profit before adjusting items due to the impact of
non-taxable adjusting items such as impairments.
Earnings per share
Basic earnings per share was 14.6p (2023/24: 21.9p), due to lower profit in the year and an
increase in the effective tax rate. Adjusted basic earnings per share was 31.9p (2023/24:
24.6p) due to higher adjusted profit and a reduced effective tax rate on profit before
adjusting items.
The weighted average number of ordinary shares in issue during the period was 2,021.9m
(2023/24: 1,973.2m), with the weighted average number of diluted ordinary shares
2,110.7m (2023/24: 2,075.9m).
Cash flow
29 Mar 25
£m
30 Mar 24
Restated
£m
1
Change vs
2023/24
£m
Operating profit 624.3 714.2 (89.9)
Adjusting items within operating profit 360.2
124.4 235.8
Operating profit before adjusting items 984.5
838.6 145.9
Depreciation, amortisation, impairments and
disposals 542.6
526.3 16.3
Cash lease payments (343.0)
(321.4) (21.6)
Working capital (38.6)
77.2 (115.8)
Non-cash pension expense 5.6
5.3 0.3
Defined benefit scheme pension funding (0.4)
(0.4) —
Capex and disposals (458.6)
(423.2) (35.4)
Financial interest (2.6)
(31.2) 28.6
Taxation (208.3)
(191.2) (17.1)
Employee-related share transactions (13.1)
22.2 (35.3)
Share of result from Associate 28.7
37.3 (8.6)
Loans to Associates — (62.0) 62.0
Share of results in other joint ventures (0.5)
0.3 (0.8)
Adjusting items in cash flow (53.0)
(40.0) (13.0)
Free cash flow from operations 443.3
437.8 5.5
Marks and Spencer Group plc Annual Report and Financial Statements 202528
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
29 Mar 25
£m
30 Mar 24
Restated
£m
1
Change vs
2023/24
£m
Lease Surrender Payments (19.0) (24.1) 5.1
Transactions with non-controlling interest (2.6)
— (2.6)
Acquisitions, investments, and divestments (11.9)
(2.6) (9.3)
Free cash flow 409.8 411.1
(1.3)
Dividends paid (60.5) (19.6) (40.9)
Free cash flow after shareholder returns 349.3
391.5 (42.2)
Opening net funds excluding lease liabilities 45.7 (355.6)
401.3
Free cash flow after shareholder returns 349.3 391.5 (42.2)
Exchange and other non-cash movements
excluding leases 42.8 9.8
33.0
Closing net funds excluding lease liabilities 437.8 45.7 392.1
Opening net debt (2,165.8) (2,637.2) 471.4
Free cash flow after shareholder returns 349.3 391.5 (42.2)
Decrease in lease obligations 258.6 243.5
15.1
New lease commitments and remeasurements (261.0) (176.0) (85.0)
Exchange and other non-cash movements 29.3 12.4 16.9
Closing net debt (1,789.6) (2,165.8) 376.2
1 Lease Surrender Payments have been reclassified in 2024/25 as an adjustment to Free Cash Flow.
The business generated free cash flow from operations of £443.3m, a year-on-year
increase of £5.5m.
Growth in operating profit before adjusting items was offset by a planned working
capital outflow and increased capex net of disposals.
The working capital outflow was partly driven by a change of payment terms in Fashion,
Home & Beauty from 90 to 75 days at the end of the prior year. Increased Food inventory
was offset by growth in payables, partly due to Easter timing.
The reduction in financial interest paid was driven by the repurchase of medium-term
notes. Taxation increased due to higher profit before adjusting items in the year. Loans
to associates reflect reduced funding requirements for Ocado Retail Limited.
Adjusting items in cash flow include a £25.0m fee relating to a change in arrangements
between M&S and HSBC UK for financial services, £20.6m relates to the store estate
strategy, £6.4m relates to Furniture simplification, and £4.9m relates to Fashion, Home &
Beauty network improvements. These were partly offset by £22.0m received relating to
a legal settlement.
Dividends paid reflect the final dividend paid for 2023/24 and the interim dividend
for2024/25.
The Group generated free cash flow after shareholder returns, resulting in a further
increase in net funds excluding lease liabilities and a reduction in net debt.
Movement in Exchange and other non-cash movements excluding leases relates
tothechange in recognition of the Scottish Limited Partnership liability.
Capital expenditure
52 weeks ended
29 Mar 25
£m
30 Mar 24
Restated
£m
1
Change vs
2023/24
£m
Store renewal 118.8 51.5 67.3
New stores 125.8
77.4 48.4
Property maintenance 114.0
99.1 14.9
Supply chain 95.3
69.3 26.0
Digital & Technology 104.7
80.8 23.9
International 7.4
12.4 (5.0)
ROI 11.1 5.6 5.5
Financial services 1.1 — 1.1
Capital expenditure before property disposals 578.2
396.1 182.1
Property disposals (48.3)
(6.1) (42.2)
Capital expenditure 529.9
390.0 139.9
Movement in capital accruals and other items (71.3)
33.2 (104.5)
Capex and disposals as per cash flow 458.6
423.2 35.4
1 International has been restated as no longer includes ROI.
Cash flow continued
Marks and Spencer Group plc Annual Report and Financial Statements 2025 29
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Capital expenditure continued
Group capital expenditure before property disposals increased £182.1m to £578.2m due
to increased investment in store renewal and new stores, supply chain and digital & technology.
Store renewal investment was driven by flagship renewals opened in the year at Cribbs
Causeway, Gemini and Tamworth. Spend on new stores was driven by the opening of two
Full Line stores at Dundee, Washington Galleries and the extension of Fosse Park which
launched in October.
Supply chain expenditure reflects investment in expanding Fashion, Home & Beauty
fulfilment capabilities, as well as replacement of vehicles and handling equipment.
Digital and technology includes technology replacement, network upgrades, and
continued investment in website and app development.
Net debt
Group net debt decreased £376.2m since last year driven by the generation of free cash
flow and the change in recognition of the Scottish Limited Partnership liability (see note
12 in the financial statements).
The composition of Group net debt is as follows:
52 weeks ended
29 Mar 25
£m
30 Mar 24
£m
1
Change vs
2023/24
£m
Cash and cash equivalents
1
864.5 1,022.4 (157.9)
Current financial assets and other
1
290.4 26.9 263.5
Medium-Term Notes (717.1) (921.7) 204.6
Partnership liability — (81.9)
81.9
Net funds excluding lease liabilities 437.8 45.7 392.1
Lease liabilities (2,227.4) (2,211.5) (15.9)
Group net debt (1,789.6) (2,165.8) 376.2
1 Cash and cash equivalents represents cash held on deposit for under 90 days. Current financial assets
includes funds on deposit for longer than 90 days.
The Medium-Term Notes include four bonds, with maturities out to 2037, and the
associated accrued interest. During the period part of 2025 and 2026 bonds were
repurchased totalling £190.3m. The USD 300m 2037 bond is valued by reference to the
embedded exchange rate in the associated cross currency swaps. The full breakdown of
maturities is as follows:
Bond and maturity date
Value
£m
Jun 2025, GBP 105.5
May 2026, GBP 109.4
Jul 2027, GBP 250.0
Dec 2037, USD 252.9
Unamortised bond costs and effects of fair value hedges (1.7)
Total principal value 716.1
Interest and FX revaluation 1.0
Total carrying value 717.1
Lease Liabilities
29 Mar 25
£m
30 Mar 24
Restated
£m
1
Change vs
2023/24
£m
Average lease
length
to break
2
Full Line stores (841.7) (860.1) 18.4 c. 16 years
Food stores (701.4) (682.2)
(19.2) c. 10 years
Offices, warehouses, ROI and other (518.5) (514.9)
(3.6)
International (165.8) (154.3) (11.5)
Total lease liability (2,227.4) (2,211.5) (15.9)
1 Restated owing to ROI moving out of international.
2 Liability-weighted average lease length to break.
New lease commitments and remeasurements in the period were £261.0m, largely
relating to UK lease additions including new stores and UK property liability
remeasurements, which was more than offset by capital lease repayments.
Full Line store lease liabilities include £149.3m relating to stores identified as part of the
store estate strategic programme. The average lease lengths on full line stores is
skewed by nine particularly long leases. Excluding these nine leases, the average term
to break of leases outside the programme is c.14 years. Food store lease liabilities include
£49.5m relating to stores identified as part of the store estate strategic programme.
Marks and Spencer Group plc Annual Report and Financial Statements 202530
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
FINANCIAL REVIEW CONTINUED
Pension
At 29 March 2025, the IAS 19 net retirement benefit deficit was £122.7m (2023/24: £77.2m
surplus). There has been a decrease of £199.9m since prior year largely driven by changes
to member mortality experience and the change in recognition of the Scottish
LimitedPartnership.
The most recent actuarial valuation of the UK DB Pension Scheme was carried out as at
31 March 2024 and showed a funding surplus of £288m. This is a reduction compared to
the previous position at 31 March 2021 (funding surplus of £687m), primarily due to net
investment experience.
The IAS 19 net retirement deficit differs from the actuarial valuation primarily due to the
difference in discount rate applied.
The Company and Trustee have confirmed, in line with the current funding arrangement,
that no further contributions will be required to fund past service because of this
valuation, other than those contractually committed under the existing Marks and
Spencer Scottish Limited Partnership arrangements.
Marks and Spencer Scottish Limited Partnership
Marks and Spencer plc is a general partner of the Marks and Spencer Scottish Limited
Partnership, with the UK DB Pension Scheme, which is a limited partner.
The Partnership holds £1.3bn (2023/24: £1.3bn) of properties at book value which have
been leased back to Marks and Spencer plc.
In February 2025 the Group and the UK DB Pension Scheme Trustee agreed to a change
to the Partners’ entitlements to distributions from the partnership. The first limited
partnership interest and second limited Partnership interest were replaced by a third
limited partnership interest.
The new third partnership interest (also held by the UK DB Pension Scheme), entitles
thePension Scheme to receive £45.0m in June 2025 and June 2026, and £55.0m in
June2027 and June 2028. From June 2029 to June 2035 the Pension Scheme is entitled
to receive either £55.0m or £nil, depending on the funding level of the Pension Scheme
asat the latest reporting date. Under certain circumstances these amounts may be
retained in the Partnership, with the distribution determined by the future funding
position of the pension scheme.
Liquidity
At 29 March 2025, the Group had liquidity of £1,739.5m (last year: £1,897.4m), comprising
cash and cash equivalents of £864.5m, an undrawn committed syndicated bank revolving
credit facility (RCF) of £850.0m (set to mature in June 2027), and undrawn uncommitted
facilities amounting to £25.0m.
The Group continues to maintain a robust balance sheet providing it with sufficient
access to liquidity, through a combination of cash and committed facilities, to meet its
needs in the short and medium-term.
Dividend
With the Group generating a further improvement in operating performance, balance
sheet and credit metrics, a final dividend of 2.6p per share has been declared. This will
be payable on 4 July 2025 to shareholders on the register of members as at close of
business on 30 May 2025.
Statement of financial position
Net assets were £2,951.4m at the period end. The profit made in the period and the reduction
in borrowings resulted in an overall increase in net assets of 4.3% since prior year.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 31
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PEOPLE AND CULTURE
A high-performance culture is critical to
thenext phase of our transformation
andevery one of our 63,000 colleagues
has a role to play in delivering it.
The aim is to create a culture that is closer to customers
and closer to colleagues and constantly raising the bar.
While we have made progress this year, there’s still so
much more to do to build the culture we need to reshape
M&S for growth.
Creating a high-performing M&S
Rewarding our front-line colleagues
Our vision is to be the most trusted retailer, and to do
that, we also need to be the most trusted employer. For
the third year in a row, M&S has made a record investment
– £95m – in UK retail pay. Customer Assistant’s pay increased
to £12.60 per hour (and £13.85 in London), in line with the
Real Living Wage, effective from 1 April 2025. Since 2022,
we have invested more than £285m in our retail pay, with
standard hourly rates increasing by over 26%, more than
double the rate of inflation. For the third year, we also
awarded our front-line colleagues an M&S e-gift card in
recognition of their contribution during our peak period
over Christmas. We also provide a wide range of benefits
which, when combined with the new hourly pay rate,
could be worth up to £15.40 an hour. These benefits
include an uncapped industry leading 20% colleague
discount, pension contributions up to 12% of salary and
26 weeks maternity/adoption leave at full pay.
We get out there
and ask questions,
curious andkeen
to get close to
customers, close
to colleagues.
We say it, we do it.
We’re bold with
ourdecisions,
andambitious for
growth. We’re hands
on, sleeves rolled
up, and we get the
job done.
We tell it as it is.
We’re honest and
straight talking.
We’re informal and
conversational.
Nodramas.
We disrupt
and innovate.
We’re tough on
performance, learn
from others to get
better every day,
and we always
aimhigher.
We work selflessly.
We put M&S first to
make the right calls
for our customers
and shareholders,
so we all win together.
We’re financially
disciplined. We
make the right
choices with our
money to spend
wise, save well.
Our behaviours
Marks and Spencer Group plc Annual Report and Financial Statements 202532
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Robust goal setting
Putting better processes in place so every colleague
hasclear and measurable goals – which are essential to
driving a high-performance culture – has been a priority
over the past three years. This year, we set shared objectives
across M&S which focus on customers, stores,business
transformation and growth. To ensure performance is
more regularly reviewed, we have introduced quarterly
check-ins across the business. This more regular drumbeat
also provides clearer touchpoints to support development
and ensures underperformance is addressed sooner.
Inthe September 2024 Pulse survey, 86% of colleagues
agreed ‘I’m clear about what is expected of me in my role’,
and 79% agreed ‘In my team, we always aim higher’.
Upskilling leaders and line managers
Line managers have a critical role to play in driving the
next phase of our transformation. Investing in our line
managers has been a clear focus this year and we have
taken steps to reset what it means to be a line manager at
M&S. To drive accountability, consistency and raise the bar
on performance, we introduced a specific objective for
every line manager on driving the quality, engagement
and performance of their team. We also launched
Raise the Bar, an intervention to set a benchmark for all
6,000+ line managers across M&S, so there is clarity on
expectations around giving actionable feedback and
proactive management of poor performance. There is
much more todo in this space butwe are beginning to
build astronger foundation.
Embedding our behaviours
Following the introduction of our behaviours in 2023/24,
the focus this year has been on hardwiring them across the
business, including through recruitment and performance
management, and making them part of how we communicate
through our brand guidelines. Through the Pulse survey,
we are now measuring our progress against the behaviours
across the business, with leaders required to build action
plans to address areas of concern.
PEOPLE AND CULTURE CONTINUED
Closer to colleagues and
closer to customers
Getting even closer to customers
At the heart of a culture that’s sleeves rolled up and
hands on is our Closer to Customers programme which
brings Store Support Centre colleagues closer to the
front line. Now in its third year, the programme has been
expanded so that every colleague joining the business
starts their career with M&S in stores. Every newly hired
leader now spends their first four weeks working in store,
while new starters to our Support Centre spend three
days in their first week with the business in store. Feedback
has been incredibly positive with new joiners developing
an accelerated understanding of the challenges and
opportunities facing the business and the role they can
play in driving change.
All colleagues spend seven days per year working in stores.
In 2024/25, more than 4,000 Support Centre colleagues
spent over 200,000 hours working
in stores, breaking down
barriers and driving better collaboration. Following
feedback from stores, we encouraged Support Centre
colleagues to align Closer to Customer days to critical
trading periods. Support Centre colleagues spent over
93,000 hours supporting 596 stores over Christmas,
helping to serve, sell and fill while getting closer to our
customers and colleagues.
Simplifying processes for stores
For a long time, our stores have been overburdened with
reports and tasks, taking up time that should be spent
serving our customers. This year, there has been
considerable focus on reducing complexity for our
stores. One example of this is simplifying store KPIs
from24 to six clearer, more actionable measures.
We also introduced Live from the Floor calls between
Store Support Centre colleagues and our stores. Each
week, Store Managers and Regional Managers give their
feedback directly to the Support Centre colleagues
responsible for addressing their issues to drive better
communication and quicker outcomes.
Engaging colleagues through BIG
At the heart of colleague engagement is our elected
M&Scolleague representative network, BIG. This year,
BIGhas played an instrumental role in defining our retail
pay strategy and supporting efforts to ‘Raise the Bar’ on
performance as part of the wider cultural reset across the
business. This year, the National BIG leadership team met
with over 600 store BIG teams, hearing first-hand from
our colleagues and strengthening the network across
thebusiness.
To keep leadership informed on how colleagues are
feeling, the National BIG Chair meets with Stuart and the
National BIG reps from across stores, Castle Donington
and Support Centres every six weeks, and the Board and
the Executive Committee every quarter. Stuart also now
meets directly with Support Centre BIG reps twice a year,
to give the opportunity for Support Centre colleague
views to be shared directly with the CEO.
Evolving ‘The Pulse’ engagement survey
The Pulse colleague engagement survey gives every
colleague the opportunity to tell us how they feel and
helps us to better track our progress towards building a
high-performance culture. Following itslaunch in January
2024, focus this year has been on evolving the survey to
better measure colleague perceptions around our behaviours
and transformation. The March 2025 survey saw a net
promoter score (NPS) of 76% – a 12% year-on-year increase
– in response to the statement ‘I would recommend M&S as
a great place to work’ with a participation rate of almost
80%, up from 60% in September 2024. Focus is now on
maintaining this momentum. Leaders are asked to review
Pulse results and share action plans with teams within
three weeks of the results being published, ensuring we
are continuously facing into the areas ofopportunity and
addressing issues quickly.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 33
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PEOPLE AND CULTURE CONTINUED
Closer to colleagues and
closer to customers continued
Encouraging two-way communication
Through our Straight to Stuart suggestion scheme, every
colleague at M&S has the opportunity to put forward their
ideas to improve the business and drive positive change.
Since launching in May 2022, colleagues have submitted
over 20,000 ideas, with many of these implemented to
make M&S a better place to shop for our customers and a
better place to work for our colleagues. This year, more
than 6,500 ideas were submitted. One idea that received a
‘yes’ was the suggestion of M&S being the first retailer to
offer a dedicated range of knickers for people living with
stomas. Created in partnership with Colostomy UK, the
range launched in August and has sold 21,000 units.
Thenews was shared on our colleague channels and
wasour most engaged with post of the year.
We hosted a Straight to Stuart LIVE event this year,
focused on improving our security and asset protection
measures, hosted by Stuart Machin, Sacha Berendji,
Operations Director, and Jayne Wall, Director of Central
Operations, at our Security Operations Centre in
Northampton. Colleagues submitted over 120 ideas for
how we can make improvements with around 1,000
colleagues viewing the event live.
To give colleagues the opportunity to ask their questions
directly of the leadership team, we host townhalls three
times a year to align with the announcement of our financial
results. This year, colleagues submitted over 100 questions,
with every question asked receiving an answer – either
during the session or as a follow-up. All Executive Committee
(ExCo) members also have as one of their objectives taking
part in at least four colleague and customer listening
groups, with sessions this year including one taking place in
Ireland and another in our Paddington Store Support Centre.
Raising the bar on talent
Improving hiring practices
To make sure we hire the best talent to support the future
growth of M&S, there has been a focus this year on improving
hiring practices. A new foundational module was launched
to set the standard for hiring managers with more than
1,300 managers in our Support Centre now trained on the
new approach. This training will form the foundation for
continuous improvement in the year ahead with plans for
the roll-out of better assessment tools and technology
to further enhance hiring processes.
Investing in future leaders
To build a strong pipeline of future leaders, we have a clear
rhythm of reviewing talent from across the business. The
Fast Track programme, launched in September 2023, was
established to support the highest potential colleagues
and accelerate their progress through the business. An
initial 43 colleagues were identified to join the programme
which focuses on supporting development and preparing
colleagues for the next stage of their career. 65% have now
progressed into a bigger or broader role. In January 2025,
afurther 41 colleagues joined the programme, and further
development is a priority for the year ahead as we continue
to invest in nurturing talent in our stores, distribution
centres and Support Centres.
To fuel the future talent pipeline, we continued to run
ourleadership development programmes BUILD and
EVOLVE. 320 high-potential colleagues completed an
M&S Future Leaders programme this year, with 30%
fromethnic minorities and 72% being women.
A place where everyone can be
themselves and be their best
Improving diversity in recruitment
The retail industry is an engine of social mobility and
M&Sis committed to helping young people furthest from
work into employment. This year, we celebrated 20 years
of our employability programme Marks & Start, managed
in partnership with The King’s Trust, and supported a
further 603 young people through the programme with
88% of young people who completed their placements
leading to paid employment opportunities. The programme
brings diverse talent and thinking into M&S with 30% of
participants this year from ethnic minorities and 29%
having a declared disability.
Developing talent from minority
backgrounds
We are committed to creating a more diverse, equitable
and inclusive M&S. Last year, we launched EMERGE, a
trialdevelopment programme aimed at encouraging
greater representation of ethnic minorities on our
futureleader programmes. 37 colleagues completed the
programme this year, with 14 of those on the programme
being Team Managers in our stores. Since launching,
wehave seen an increase in representation of ethnic
minorities on our future leader programmes. However,
there have been a number of learnings since the launch
which are being taken forward to improve the programme
from next year.
Marks and Spencer Group plc Annual Report and Financial Statements 202534
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PEOPLE AND CULTURE CONTINUED
Driving inclusion through engagement
With over 11,000 members from across the business, our
colleague inclusion networks have an important role to
play in helping us to drive a more inclusive workplace for
all colleagues.
Improvements to the governance of the networks, increased
sponsorship from senior leaders and investment in
network chairs have supported their growth this year.
This year, key achievements of the networks include
signing the Miscarriage Association’s pregnancy loss
pledge as part of our commitment to being a leading
employer for women in retail, improving learning
resources on key topics including menopause, neurodiversity,
unconscious bias, allyship and racial inequality, and
working with the Careers Transition Partnership and the
Ministry of Defence to promote career opportunities at
M&S to Armed Forces personnel.
We have received external recognition for our progress
this year, including as a top performer in the FTSE Women
Leaders Review and as a top faith-friendly FTSE 100
workplace according to the 2025 UK REDI Monitor.
Colleague representation measurements
Total employees Gender balance of senior leaders**
Colleague engagement (The Pulse survey)
76%
23/24: 64%
NPS score March 2025 – percentage of those who agree
or strongly agree with the statement ‘I would recommend
M&S as a great place to work’ with a participation rate
of almost 80%, up from 60% in September 2024.
2024/25
Female 43,411
Male 20,082
2024/25
Female 56%
Male 44%
2023/24
Female 50%
Male 50%
Senior managers* from ethnic minorities
4.9%
2023/24: 4.3%
* Senior managers are measured using our internal reward levels,
being those who have the biggest influence and responsibility in
driving and delivering the Group’s strategy.
Read more in our Nomination Committee Report on pages
72to 73.
** Senior leaders are the ‘senior management’ of the Company
andincludes ExCo and ExCo direct reports, but excludes Board
members. The gender breakdown of the Board is 60% female
and40% male.
Read more on ExCo and Board director gender data on page61.
Gender pay gap
12.2%
23/24: 12.6%
Figure provided is mean pay gap. We are committed to
driving equal opportunities. Our focus is on continuing
to make M&S a great place to work for women and while
we are ahead of the national average, we know there is
more to do in this space.
Read more in our Remuneration Report onpage 88.
Looking ahead
The year ahead will be focused on driving a talent
strategy that will help further fuel future growth, further
accelerating change to streamline processes for our
stores so they can focus on serving our customers, and
simplifying organisational structures in our Support
Centres to drive a high-performing workforce. There will
also be greater emphasis on holding leaders to account
for driving culture change, through performance objectives
and progress reviews in Business Boards and working
more closely with BIG to make sure the voice of colleagues
is represented in decision-making.
2023/24
Female 44,822
Male 21,026
Marks and Spencer Group plc Annual Report and Financial Statements 2025 35
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ESG REVIEW
At M&S, we’vealways built trust by doing theright
thingfor our colleagues, customers, andthe
communitieswe serve.
This commitment has been at the heart of our business for
over140years and continues to be just as important today.
Ouractionsare guided by our vision to be the most trusted
retailer,doing the right thing for our customers, with exceptional
quality products at the heart of everything we do.
Underpinning this vision is our ESG strategy which we call
PlanA.Not only does it help guide us in our approach to being
responsible, it also means our customers can trust us to do
theright thing.
There is a clear governance framework in place to support
deliveryof our strategy. The Executive Committee (ExCo), led by
the CEO, is accountable for setting and delivering the strategy,
with individual directors accountable for delivery within their
areas, and the Corporate Affairs Director accountable for overall
delivery of the programme. The ESG Committee provides a
strategic oversight role in challenging strategy and supporting
delivery plans. The ESG Business Forum, a cross-functional group
of seniorleaders and subject matter experts across M&S, plays a
keyrole in tracking ESG progress against targets, supporting the
accountability and decision-making functions of the ExCo and
ESG Committee.
More broadly, effective and robust governance underpins how we
do business. We expect every colleague to play their part through
living our behaviour to ‘act selflessly’ – always acting in the best
long-term interests of M&S and respecting their colleagues and
our customers so we can win together – and by doing the right
thing through compliance with our policies and standards.
Read more about our approach to ESG in our ESG Report
corporate.marksandspencer.com/ESGreport2025.
Our strategic priorities are
supported and enhanced by
our ESG strategy.
PLAN A.
BECAUSE
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Marks and Spencer Group plc Annual Report and Financial Statements 202536
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ESG progress overview
Environment
Issue Metric Target
Assessment
of progress
Net zero
Total location-based Scope 1 and
Scope 2 GHG emissions.*
Reduce absolute Scope 1
and 2 GHG emissions 55%
by 2029/30 from a 2016/17
base year.
Total Scope 3 GHG emissions. Energy and Industry – reduce
absolute Scope 3 GHG
emissions 42% by 2029/30
from a 2022/23 base year.
FLAG – reduce absolute
Scope 3 FLAG GHG
emissions 30.3% by
2029/30 from a 2022/23
base year.
Responsible
sourcing
RSPO Certified Sustainable Palm Oil
with Segregated status (% of all palm oil).
100% by 2025/26.
Soy sourced from verified
deforestation and conversion-free
(vDCF) supply chains (% of total direct
and indirect soy).
100% by 2025/26.
Cotton used in Fashion, Home & Beauty
products from more responsible
sources (% of all cotton used).
100% by 2025/26.
Polyester used in Fashion, Home &
Beauty products from verified recycled
sources (% of all polyester used).**
100% by 2025/26.
Waste and
circularity
Number of individual pieces of plastic
(units) that have been removed from
the M&S own-brand packaging portfolio.
Remove 1bn units by the
end of 2027/28 from
2016/17.
Food waste.* 50% reduction by 2029/30
(vs 2016/17 baseyear).
Food not sold that was fit for human
consumption which was redistributed
to charities, community organisations
or colleagues.
100% by 2025/26.
Operational waste to landfill. Maintain 0%.
Read more on our SBTi targets on page 50.
Social
Issue Metric Target
Assessment
of progress
Animal
welfare
Ranking among retailers, with highest number
of species within M&S Food product range
adhering to RSPCA Assured certification.
Maintain #1 position.
People
Senior leaders who are female. 50% by 2025/26.
Community
Funds raised for YoungMinds. £5m by 2026/27
from 2023/24.
* Limited assurance provided by Deloitte.
** This data is subject to a discrete assurance process linked to our financing
and is scheduled to be published in autumn 2025; see page 163.
X
Target missed Behind On track or achieved
ESG highlights of the year
£4.4m
raised for YoungMinds
since the beginning of the
partnership in 2023
148.1m
pieces of plastic removed
from our packaging
portfolio this year
33%
reduction in Scope 1 and
Scope 2 emissions vs
2016/17 baseline
101.1m
meals donated through
our partnership with
Neighbourly since 2015
100%
of cotton used in clothing
products from more
responsible sources
69%
of the Remarksable range
designated as ‘Eat Well’
ESG REVIEW CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 37
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
TCFD
This section outlines how M&S has complied with the requirements of UKLR 6.6.6R (8)
by including climate-related financial disclosures consistent with the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations and recommended
disclosures. Our disclosure also complies with the requirements of the Companies
Act 2006 as amended by the Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022.
TCFD disclosures index
TCFD pillars TCFD recommendation
Consistency
status Reference
Governance A) Describe the board’s oversight of climate-related risks
and opportunities.
Read more on
page 39-40.
B) Describe management’s role in assessing and managing
climate-related risks and opportunities.
Read more on
page 39-40.
Strategy A) Describe the climate-related risks and opportunities the
organisation has identified over the near, medium, and long term.
Read more on
pages 41-46.
B) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
Read more on
page 42-46.
C) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a
2°C or lower scenario.
Read more on
pages 46-48.
Risk
management
A) Describe the organisation’s processes for identifying and
assessing climate-related risks.
Read more on
page 41.
B) Describe the organisation’s processes for managing
climate-related risks.
Read more on
pages 52-53 in
Risk Management.
C) Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management.
Read more on
page 41.
Metrics and
targets
A) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process.
Read more on
page 48.
B) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas emissions and the related risks.
Read more on
pages 48-49.
C) Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
Read more on
page 50.
Read more in our
ESG Report.
Consistent Partially consistent
Last year, M&S highlighted the focus areas for the 2024/25
year; progress against these is outlined below.
2024/25 action Progress update
Re-submit our
targets to the
Science Based Target
Initiative (SBTi)
Following updated guidance
from the SBTi for businesses
with FLAG emissions (stemming
from Forestry, Land or
Agriculture), we have updated
our Scope 3 targets this year.
The Scope 3 base year has also
been updated to reflect better
data. These updated targets are
used throughout this
disclosure.
Work towards plan
for transition in line
with TPT
1
guidance
An internal transition plan has
been drafted in line with the
TPT guidance. Key elements of
this plan are included within
this TCFD Report, particularly
in Strategy B.
1 Transition Plan Taskforce: https://transitiontaskforce.net/
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
TCFD CONTINUED
Governance
Board’s oversight of climate-related risks
and opportunities (TCFD governance A)
The Board holds ultimate accountability for risk
management and our ESG framework. This encompasses
the climate-related risks and opportunities that affect
our operations including physical and transitional
climate risks. The Audit & Risk Committee is tasked with
overseeing these risks, conducting biannual reviews of
principal risks, including those associated with climate
change and environmental stewardship.
Key elements of our risk management and ESG
framework include:
•
The Board establishes the risk appetite for essential
business areas, incorporating ESG considerations.
•
The Audit & Risk Committee receives biannual updates
from the leadership team responsible for ESG
oversight, including performance metrics that align
with our risk appetite.
•
The ESG Committee plays a crucial role in managing
ESG matters. This Committee convenes at least
quarterly and is responsible for:
–
Ensuring alignment between the Company’s ESG
purpose, business strategy and customer proposition.
–
Assessing the effectiveness of our ESG strategy and
governance, including climate-related issues.
–
Monitoring progress against established targets
through quarterly ESG reports.
–
Overseeing risk mitigation activities related to
climate risks.
–
Supporting the overall risk management framework
by reviewing ESG-related risks and providing
recommendations to the Audit & Risk Committee.
All members of the ESG and Audit & Risk Committees are
Non-Executive Directors, ensuring an independent
perspective on our climate-related governance.
For a detailed overview of our risk management
processes and governance please see pages 52 to 53.
Moreinformation about the Audit & Risk Committee’s
responsibilities can be found in the governance
structureon page 40.
Management’s role in assessing and
managing climate-related risks and
opportunities (TCFD governance B)
As detailed in our risk management process (see pages
52-53), climate risks, including emerging areas, are
integrated into each business and functional risk review.
Business units assess the capital expenditure needed for
projects that address near term climate-related risks
during the annual budgeting process.
•
Executive Committee (ExCo) members are responsible
for reviewing and confirming risks in their areas, as well
as evaluating the Group’s principal risks and uncertainties
at the half year and year end. This ensures that significant
risks are effectively monitored and managed
throughout the year.
•
The Executive Risk Committee, comprising a subset
ofExCo members, has also been established to
support with oversight of ongoing risk and control,
identify potential emerging issues and monitor overall
adherence to expected standards.
•
The ESG Business Forum, chaired by the Corporate
Affairs Director, includes business leaders accountable
for ESG issues. The Forum manages climate-related
risks and opportunities, driving progress against our
ESG targets. Key updates on ESG trends, including
climate change, are shared with the Forum by the
Corporate Affairs team. The Forum meets quarterly,
with summaries shared with both the ExCo and the
ESGCommittee (see governance structure on page 40
for details).
Marks and Spencer Group plc Annual Report and Financial Statements 2025 39
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
TCFD CONTINUED
Governance structure
BOARD
Ultimate accountability for both risk management and ESG framework, including those risks and opportunities related to climate change.
Approves the Company’s ESG strategy, including the business-wide target to become net zero.
BOARD COMMITTEES
AUDIT & RISK COMMITTEE
•
Responsible for ensuring the effectiveness
of the risk management process.
•
Receives updates from business leadership
on how the Company’s principal risks and
uncertainties are being appropriately
addressed.
•
Twice a year, reviews the principal risks, of
which climate change and the environment
isone.
•
Receives periodic updates on business
performance against ESG objectives, as well
as compliance and responsibility metrics.
ESG COMMITTEE
•
Responsible for ensuring the Company’s ESG
strategy aligns with the business strategy
and customer proposition.
•
Responsible for ensuring the ESG strategy
and associated governance is fit for purpose,
and that plans are in place and reported on.
•
Responsible for ensuring related policies are
regularly reviewed and updated and remain
compliant with any relevant national and
international regulations.
•
Oversight of all ESG reporting and metrics.
•
Monitors the Company’s annual and overall
performance against previously set KPIs.
•
Approves the ESG strategy and KPIs, aswell
as all ESG disclosures.
•
Advises the Audit & Risk Committee on
ESG-related risks and opportunities,
including climate-related issues.
EXECUTIVE COMMITTEE
•
The Committee manages, monitors and provides the executive input underlying M&S’ ESG
strategic and operational decisions. It ensures strong executive alignment on business
priorities, investments and actions.
•
The CEO and ExCo are responsible for overseeing the development of business-wide ESG
strategic goals and accountable for delivery of the ESG programme (including the roadmap
towards net zero).
•
ExCo members are individually responsible for setting the ESG strategy in their respective
areasto achieve business-wide strategic goals and putting in place mechanisms to deliver
theirstrategy. This supports the management of the climate-related risks and opportunities
impacting their areas.
•
ExCo members are individually responsible for reviewing and confirming
risks in their own areas as part of our risk management process, including climate risks.
•
The Corporate Affairs Director, a member of the ExCo, is responsible for the coordination,
reporting and aggregation of the business-wide ESG programme, as well as horizon scanning
and issues management. They are also accountable for governance and overall delivery of
theESG strategy.
MANAGEMENT FORUMS
EXECUTIVE RISK COMMITTEE
•
Supports the ExCo in the management
ofrisks.
•
Supports the Audit & Risk Committee in its
role of overseeing business compliance with
the Group Risk Policy and associated
corporate governance requirements.
•
Responsible as a governance forum for
overseeing the activities of the relevant
ExCo members and senior leadership
accountable for maintaining an effective risk
management, control and assurance
framework across the business.
ESG BUSINESS FORUM
•
Responsible for driving progress against the
targets of the Company’s ESG programme,
which mitigate our climate risks.
•
Meets quarterly to review progress and agree
the right metrics and targets on a forward-
looking basis.
•
Updates the ExCo and ESG Committee on a
quarterly basis on progress against targets
and emerging risks.
•
Accountable for managing climate-related
risks and opportunities. Includes
representatives from Group Finance and
Group Risk to ensure ESG considerations
arereviewed and considered within risk
management and financial planning.
BUSINESS AND FUNCTIONAL LEADERSHIP
•
Responsible for managing risks within their areas, including those relating to climate, and
implementing appropriate mitigation activities.
•
Responsible for monitoring emerging risks.
•
Responsible for monitoring and reporting on key ESG-related indicators.
•
Responsible for ensuring climate-related opportunities are realised as part of their ESG strategy
in their respective areas.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
TCFD CONTINUED
Risk management
M&S’ process for identifying, assessing
and managing climate risk, andhow
this is integrated intooverall risk
management (TCFDriskmanagement
A, B and C)
The identification, assessment, and management of
climate-related risks are integrated into our overall
Group risk management process. Climate risks are
evaluated using consistent criteria applied across all
risks. A detailed description of our risk management
framework can be found on pages 52 to 53.
In this process, each accountable business and function
assesses the potential consequences of climate risks,
referencing the TCFD Guidance Tables A1.1 and A1.2.
Specifically, they:
•
Analyse the impact of current and emerging
climate-related issues on their strategies, both in
thenear-term and long-term.
•
Leverage stakeholder insights to gauge the size and
scope of climate risks in alignment with our Group risk
assessment criteria.
•
Prioritise risks based on materiality and time horizon.
•
Evaluate the effectiveness of existing mitigating controls.
•
Designate a risk owner for each identified risk.
•
Engage relevant leadership teams for further insight
and accountability.
The output of this is then reported onto a central system
tocollate each business function’s core risks, mitigating
controls and actions, which includes climate risks. The detail
on specific climate risks is in Table 1 which can be found on
pages 42 to 44.
At the Group level, the ESG Business Forum provides
oversight by consolidating insights on various risks and
promoting transparency regarding progress against
ourpriorities.
Before our half year risk review, the Forum conducted
adedicated session focused on ESG risks. Following
eachmeeting, the ExCo receives updates to ensure
informed decision-making and alignment with our
strategic objectives.
At the Board level, governance of this process is overseen
by the ESG and Audit & Risk Committees. Climate change
and the environment remain a principal risk for the
business, as detailed on page 58.
Strategy
Identified climate-related risks and
opportunities (TCFDstrategy A)
We continue to monitor our climate-related risks and
opportunities. We consider both physical and transition
risks and opportunities and how we manage these
overthe near, medium and long term. The following
definitions of these time horizons were used for the
purposes of identifying and managing climate risks
andopportunities. They were informed by the Paris
Agreement, which influences global policy responses,
the UNFCC data on physical risks and our own Company’s
science-based targets.
Time horizons
Near <3 years Aligned to our risk management
and financial planning processes.
Medium 3-10 years Captures transition risks and
opportunities, linked to both our
near term science-based targets
and the emerging risks included
in our risk management disclosure.
Long 10+ years Captures physical risks and
opportunities over the long-term.
Linked to our long term net zero
goals and the emerging risks
included in our risk management
disclosure.
The business determines the severity of a risk by
considering two factors: the likelihood of the risk
materialising in a given timeframe and the potential
impact(s) such as financial, reputational, operational or
regulatory. A combination of these two factors provides
an overall risk severity score of either ‘minor’, ‘moderate’,
‘major’ or ‘critical’ which helps us to determine the
materiality of a risk.
Processes used to determine which risks and
opportunities could have a material financial
impact on the organisation
As part of the risk management process, we biannually
review climate risks and opportunities over the near,
medium and long term to consider any key changes and
additions, and ensure relevance.
Group risk assessment criteria
Almost certain 4
Likely 3
Possible 2
Unlikely 1
1 22 3 4
Minor Moderate Major Critical
A summary of climate-related risks and opportunities in
line with TCFD Guidance Table A1.1 and A1.2 can be found
inTable 1. Given the relevancy to the organisation,
M&Ssplits risks by sector, aligned to the P&L, rather
thangeography.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 41
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Strategy continued
Impact of climate-related risks and opportunities on our
businesses,strategy,andfinancialplanning(TCFDstrategy B)
In addition to summarising the risks and opportunities identified in Strategy A), Table 1 outlines thebusiness response. Relevant targets and
metrics are mapped to the impact areas to highlight howresilience is built into the business strategy.
Table 1: Business-wide risk and opportunity summary
Risk/opportunity Sector
Time
horizon Potential financial impact on the business Business response
2
Priority
areas Targets
1
Current and new
environmental
complianceincluding
legislation and tax
Transition risk:
Policy and legislation
Group wide/
Agriculture/
Food/Fashion,
Home &
Beauty/
Property/Fleet
N
M
L
Q
Increase in operating costs to manage
environmental compliance such as
carbon tax.
Summary of relevant quantitative
scenario analysis which looked at the
impact across different sectors (Food,
Fashion, Home & Beauty and Property)
can befound in Strategy C).
Increase in capital expenditure required
to address emissions areas in M&S
owned assets such as refrigeration,
energy consumption and diesel fleet.
Capital expenditure on LED lighting,
store controls upgrades, voltage
optimisation, fridge doors, electric
vehicles and other areas are included
within the Group’s budget and three
year plan which have been used to
support impairment reviews found in
page 159 of the financial statements.
Group
•
Working towards the 2029/30 science-based targets,
which guides the business setting process for relevant
ESG targets as part of the business transformation.
Supply chain
•
Built net zero as a consideration into the sourcing
strategy for Food and Fashion, Home & Beauty.
•
Identified the suppliers with the greatest impact on
emissions in the supply chain as a key focus for
engagement and measured impact through Higg Index
and Manufacture 2030.
Our operations
•
Capital investment through proactive asset replacement
which is integrated into the three-year financial plan to
phase out our F-gas refrigeration systems. New store
specifications include being 100% electric, with full LED
lighting in Foodhalls.
•
55% reduction in
absolute Scope 1 and 2
emissions by 2029/30
from 2016/17 base year.
•
Updated Scope 3
target based on SBTi
guidance – see page 50
for specific targets.
2
Ability to keep pace
withcustomer trends
andbehaviours as we see
an increase in consumer
preferences towards
moresustainable
productchoices
Transition risk:
Market and reputation
Opportunity:
Products and services
Food/Fashion,
Home & Beauty
N
M
N
Revenue opportunity from climate
conscious customers who want to
choose low-carbon products.
Revenue loss if we don’t keep pace with
customer trends and develop suitable
low-carbon product offerings.
Whilst we have considered quantifying
this risk, we’re not disclosing a financial
impact as there’s no clear methodology
orsetof assumptions that would lead to
a meaningful financialquantification.
Our products
•
Quarterly review of shoppers’ sustainability
preferences and perceptions through our Brand
Reputation Tracker.
•
Ongoing investment in innovation and new product and
proposition development to ensure we develop suitable
low-carbon products to maximise customer
preferences.
•
In Food, we continue to maintain at least 50% of food
sales from fruit and vegetables, vegetarian and vegan
products.
•
In Fashion, Home & Beauty, we continue to focus on
alternative raw materials and explore circular solutions
for customers; however, this has been identified as a
medium-term opportunity and therefore not currently
built in revenue.
•
100% of cotton used in
Fashion, Home & Beauty
(FH&B) products from
more sustainable
sources by 2025/26 (%
of all cotton used).
•
100% of polyester used
in FH&B products from
more sustainable
sources by 2025/26 (%
of all polyester used).
•
100% of MMCF used in
FH&B products from
more sustainable
sources by 2025/26 (%
of all MMCF used).
2 More information on specific programmes can be found in our ESG Report.
Q
Quantified
I
Immaterial
N
No meaningful quantification
N
Near term (<3 years)
M
Medium term (3-10 years)
L
Long term (>10 years)
TCFD CONTINUED
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
TCFD CONTINUED
Risk/opportunity Sector
Time
horizon Potential financial impact on the business Business response
2
Priority
areas Targets
3
Availability of low
carbon technological
solutions and
infrastructure to
support low carbon
activities for example
lowand zero carbon
fleetoptions
Transition risk:
Technology
Group wide/
Property/Fleet
M
Q
Increase in capital and operational
expenditure required to source the
necessary low-carbon technology and
infrastructure to achieve our net zero
goals.
Potential impact of £30-40m if not
mitigated.
Group
•
Developing the roadmap to achieve science aligned
2029/30 target, and focusing on proactively managing
the need for new low-carbon technological solutions
and infrastructure to support our journey to net zero.
Our operations
•
Trialling a new Air Source Heat Pump in store to achieve
full heat decarbonisation.
•
Running c. 80 bio-compressed natural gas (bio-CNG)
vehicles and 5 battery electric HGVs as part of our
Foodand Fashion, Home & Beauty fleet.
•
Updated Scope 3
target based on SBTi
guidance – see page 50
for specific targets.
•
55% reduction in
absolute Scope 1 and 2
emissions by 2029/30
from 2016/17 base year.
4
Energy efficiency
andresilience in our
operations and
supplychain
Transition risk: Market
Opportunity: Resource
efficiency and energy source
Group wide/
Property/
Food/Fashion,
Home & Beauty
M
Q
Increased cost in our supply chain
caused by rising energy costs if energy
efficiency or greener solutions are put
in place.
Potential impact of £nil–£10m if
notmitigated.
Reduction in operational costs if energy
consumption is effectively managed.
Opportunity to reduce reliance of grid
electricity by facilitating on-site
renewable energy generation.
Supply chain
•
Working with suppliers to reduce energy consumption
and move to renewable energy. Examples include our
participation in the Carbon Leadership Programme and
our six key asks from Food suppliers.
Our operations
•
Continuing to integrate energy efficiency measures
such as doors on fridges and trial solutions such as Jet
Seal. This is an airflow management system designed to
reduce cold air escape from fridge cases, to lower
energy consumption.
•
Updated Scope 3
target based on SBTi
guidance – see page 50
for specific targets.
•
55% reduction in
absolute Scope 1 and 2
emissions by 2029/30
from 2016/17 base year.
5
Failure to meet our
publicclimate change
commitments
Transition risk: Reputation
Group wide
M
L
N
Reputational impact of failure to meet
our net zero targets leads to lower sales
and makes it harder to attract and retain
customers and colleagues.
Whilst we have considered quantifying
this risk, we’re not disclosing a financial
impact as there’s no clear methodology
orsetof assumptions that would lead to
a meaningful financialquantification.
Group
•
Net zero goal has been incorporated into the strategic
pillars of our business transformation with a set of clear
metrics for accountable business owners.
•
Quarterly updates on our climate targets at our ESG
Business Forum, which then feeds into updates to the
ExCo and ESG Committee. See page 40 for more
information on our governance structure.
•
Continue supporting innovation with suppliers and
partners on reducing emissions through the Plan A
Accelerator Fund.
•
Updated Scope 3
target based on SBTi
guidance – see page 50
for specific targets.
•
55% reduction in
absolute Scope 1 and 2
emissions by 2029/30
from 2016/17 base year.
2 More information on specific programmes can be found in our ESG Report.
Zero deforestation
Sustainable sourcing
Low-impact farming
Suppliers and business partners
on net zero journey
High-quality products
Circular economy
Reduce food waste
Reduce and recycle packaging
Zero emissions property
Zero emissions transport
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Strategy continued
Table 1: Business-wide risk and opportunity summary continued
Risk/opportunity Sector
Time
horizon Potential financial impact on the business Business response
2
Priority
areas Targets
6
Reliance on third parties,
local Government and
broader infrastructure
to achieve our mitigation
actions
Transition risk: Market
Opportunity: Policy
Group wide
M
L
N
Increase capital and operational
expenditure required to meet our net
zero goals, e.g. increased cost in
renewable energy procurement if grid
decarbonisation is not delivered.
Whilst we have considered quantifying
this risk, we are not disclosing a financial
impact as there is no clear methodology
orsetof assumptions that would lead to
a meaningful financialquantification.
Group
•
Collaborate closely with the industry to ensure we are
working towards the same goals such as the Business
Retail Consortium (BRC) and (Institute of Grocery
Distribution (IGD).
•
Proactively engage with Government to ensure that
broader policy and infrastructure will support the retail
industry on decarbonisation.
7
Failure to meet the
requirements of our
franchise partners based
on the impact of climate
change on our supply
chain
Transition risk: Reputation
Physical risk: Acute and chronic
International
M
N
Reputational impact due to failure to
meet the requirements of our partners.
Loss of revenue from not being able to
provide necessary stock to partners.
Whilst we have considered quantifying
this risk, we are not disclosing a financial
impact as there is no clear methodology
orsetof assumptions that would lead to
a meaningful financialquantification.
Our operations
•
Apply learnings from both the invasion in Ukraine and
the Red Sea disruption as to how the business is able to
adapt the supply chain to ensure we are able to meet
partner requirements, irrespective of the cause of the
disruption.
•
Updated Scope 3
target based on SBTi
guidance -see page 50
for specific targets.
•
55% reduction in
absolute Scope 1 and 2
emissions by 2029/30
from 2016/17 base year.
8
Volatility in the supply
of raw materials caused
by the impact of climate
change
Physical risk: Acute and chronic
Agriculture/
Food/Fashion,
Home & Beauty
N
M
L
I
Increase in sourcing costs based on
supply chain disruption caused by
increased likelihood of extreme weather.
Summary of relevant quantitative
scenario analysis can be found in
Strategy C.
Loss of revenue if we are not able to
source specific products due to the
impact of physical climate risks.
Our products
•
Starting to track financial impact of climate change
onfresh produce to identify hotspots and the impact
on business.
•
Strengthened our focus on supporting producers as
they transition to net zero. Putting a greater emphasis
on resilience in our standards and partnerships, such
asFairtrade.
•
Increased focus on regenerative agriculture, through
our Farming with Nature programme and work with
Better Cotton.
•
Maintain 100%
Fairtrade certified tea
and coffee (% of all
M&S tea and coffee
products).
•
100% of cotton used in
FH&B products from
more sustainable
sources by 25/26 (% of
all cotton used).
9
Managing infrastructure
and operations (both
owned and supply chain)
in extreme weather
Physical risk: Acute
Group wide/
Property/Fleet
N
M
L
I
Loss of revenue from increased
likelihood of extreme weather events
(e.g., flooding or extreme temperatures)
leading to closures of shops, distribution
centres and key transport hubs.
Summary of relevant quantitative
scenario analysis can be found in
Strategy C.
Our operations
•
To support with the management of extreme weather
events in stores, distribution centres and key transport
hubs such as Chittagong port, Bangladesh, we have
robust business continuity procedures in place.
2 More information on specific programmes can be found in our ESG Report.
TCFD CONTINUED
Q
Quantified
I
Immaterial
N
No meaningful quantification
N
Near term (<3 years)
M
Medium term (3-10 years)
L
Long term (>10 years)
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TCFD CONTINUED
How climate-related issues serve as an input
toour financial planningprocess
We continue to utilise the financial model for the business’
carbon reduction initiatives that was developed in 2023/24.
By doing so, spend associated with certain projects linked
to climate-related risks and opportunities is incorporated
into the 2025/26 budget and three-year financial planning
process, both approved by the Board. We have done so by
including the capital expenditure required to manage the
impact of our climate-related risks in our operations and
the profit impact from climate-linked products and
services, for example, capital investment in the store
estate to improve energy efficiency. This financial planning
process forms the cash flow projections within our going
concern and impairment assessments (see page 159 for
more details).
Transition planning
This year, we have updated Scope 3 science-based targets
in line with new guidance from the SBTi for businesses
with FLAG emissions.
FLAG emissions refer to emissions related to Forests,
Land, and Agriculture, while non-FLAG emissions (also
called Energy and Industry emissions) encompass all
other fossil-based emissions from a company. We are
required to break down the Scope 3 target: a FLAG target
for land-based emissions and a non-FLAG target for
emissions from Energy and Industry sectors. Scope 1 and
2 targets remain the same.
Over the past few years we have sought to improve the
accuracy and specificity of our Scope 3 emissions through
better representation of our business model, industry
specific data and increasing supplier level data. Therefore,
in addition to updating targets in line with the FLAG
guidance, we have also taken the opportunity to update
the base year from 2016/17 to 2022/23 for these targets to
reflect this change. We acknowledge that our new Scope
3 base year number has evolved from previously reported
figures, primarily due to a transition in our reporting
methodology moving from category level to product
specific data in our Food business, and an expansion in
the scope of our goods not for resale inventory.
Due to these changes, we will no longer be reporting
against the 2025/26 1.9m tonne reduction target.
Thenext reporting milestone for the business’ total
Group emissions will be against the updated near term
2029/30 targets.
Importantly, these updated targets do not change the
overall ambition to transition to net zero by 2040 across
our value chain, an ambition still underpinned by the
business’ Net Zero Transition Roadmap. The 2034/35
and2039/40 long-term emissions reduction targets are
aligned to climate science and the SBTi net-zero standard,
and to achieve net zero any residual emissions will have
to be permanently neutralised. Once the emission
reductions outlined have been achieved, carbon
removals will be used to neutralise these residual
emissions. By focusing first on reducing emissions and
then on removals, we’re taking a comprehensive
approach to reaching net zero.
More information on our performance against our Net Zero
Transition Roadmap can be found in our ESG Report.
NET ZERO
TRANSITION
ROADMAP
2016/17 2022/23 2029/30 2034/35 2039/40
Base year Long termNear term
Scope 1 and 2
Net zero
(90% reduction)
537k
tCO
2
e
55%
reduction
Scope 3
Energy and
infrastructure
FLAG
3.3m
tCO
2
e
3.4m
tCO
2
e
Net zero
(90% reduction)
Net zero
(72% reduction)
42%
reduction
30.3%
reduction
tCO
2
e
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TCFD CONTINUED
The resilience of our strategy, taking
into consideration different climate-
related scenarios (TCFD strategy C)
Quantitative scenario analysis
Quantitative scenario analysis is a valuable tool to
helpunderstand the potential impact of risks and
opportunities identified by the business. As there
havebeen no significant changes to both the business
and climate risks and opportunities, we have updated
scenario analysis on four areas of the business previously
analysed: Property, Fleet, Protein and Cotton.
These areas were selected following a materiality
assessment which considered the potential climate-related
impact and the impact on financial performance to M&S,
whilst ensuring fair and balanced reporting across the
accountable businesses. The analysis looked at the impact
of two plausible future states. We chose to use a low-carbon
transition scenario (average global temperature increases
of 1.5˚C due to climate change by 2100) and a physical
climate impact scenario (average global temperature
increases of 4˚C due to climate change by 2100). These
scenarios were chosen to show the impact of both a high
level of transition risk (1.5˚C pathway), assuming the
implementation of a carbon tax, and physical risk (4˚C
pathway), assuming low levels of Government intervention
leading to more frequent and impactful weather events.
Consistent with previous years, the results of the scenario
analysis are included in Table 2. The financial impact
criteria has been aligned to the Group risk assessment
criteria as follows:
Financial impact
Minor <1% on sale and PBT
Moderate
1-3% impact on sales
1-5% impact on PBT
Major
3-5% impact on sales
5-10% impact on PBT
Critical
>5% impact on sales
>10% impact on PBT
10 IMMEDIATE PRIORITY AREAS FOR TRANSFORMATION
Our primary focus is on decarbonisation and in 2021 we identified 10 priority areas to enable our Net Zero Transition Roadmap.
These continue to be our focus and, to help drive the change we have three enablers that support their delivery.
PRIORITY AREAS
Responsible sourcing Sustainable manufacturing Waste and circularity Operational efficiencies
Enablers: Innovation, Technology, Engagement
Zero emissions property
•
Deliver a more efficient store estate,
to reduce our Scope 1 and 2 emissions
(target 55% reduction by 2029/30
from2016/17).
Reduce food waste
•
100% of edible food surplus to be
redistributedby 2025/26.
•
Food waste reduced by 50% by 2029/30.
Suppliers and business partners
on net zero journey
•
Look beyond our own operations to
spark change and support decarbonisation
across our full value chain.
Zero deforestation
•
No deforestation commitment by
2025across primarily deforestation
linkedcommodities.
Sustainable sourcing
•
100% verified recycled polyester
by 2025/26.
High-quality products
•
Crafting durable, high-quality
clothingthat customers can feel proud
of, while analysing the environmental
footprints of our products to identify
opportunities for decarbonisation, all
without compromising on quality.
Zero emissions transport
•
Move to low-carbon logistics with
reduced dependency on diesel and
increased use of new technologies and
cleaner fuels.
•
Contribute to cross industry action
through collaboration.
Low-impact farming
•
Support our farmers to enable them to
growlower-carbon responsible food,
usefewerpesticides, enhance their soil,
protect natural resources and drive innovation.
•
Key initiatives being our Farming with Nature
programme and our work with Better Cotton.
Circular economy
•
Promoting reusing, repurposing, and
recycling through our‘Another Life’
initiative.
Reduce and recycle packaging
•
100% of packaging to be
recyclable by 2025/26.
•
Remove 1bn units of plastic
packaging by 2027/28.
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TCFD CONTINUED
Table 2: Quantitative scenario analysis summary
Area Scope
Risk/opportunity category
(as identified in Table 1) Risk modelled
Impact of climate risk on
our organisation’s financial
performance in 2030, assuming
no mitigation actions
Quantification
of impact Targets in place to manage these risks
Property
UK property
estate
(including
Gist
properties)
Current and new
environmental
compliance including
legislation and tax.
Carbon tax on Scope 1
and 2 emissions
Potential operating
profit impact of £20m
to£30m
C
55% reduction in absolute Scope 1 and 2
emissions by 2030 from 2016/17 base year.
Managing
infrastructure and
operations (both owned
and supply chain) in
extreme weather.
Flood risk Immaterial
D
N/A
Fleet
UK fleet
(including
Gist)
Current and new
environmental
compliance including
legislation and tax.
Carbon tax on Scope 1
and 2 emissions
Potential operating
profit impact of £15m
to£25m
C
55% reduction in absolute Scope 1 and 2
emissions by 2030 from 2016/17 base year.
Protein
UK and
Ireland
sourced
beef, lamb,
pork, chicken
and turkey
products
Current and new
environmental
compliance including
legislation and tax.
Carbon tax on
agricultural emissions
(to the farm gate)
Potential operating
profit impact of £35m
to£50m
B
C
Updated Scope 3 target based on SBTi FLAG
guidance – see page 50 for specific targets.
Volatility in the supply
of raw materials caused
by the impact of
climate change.
Extreme weather events
and chronic climate
change impact on
agricultural production
Immaterial
D
N/A
Cotton
Globally
sourced raw
material
used in our
clothing
Current and new
environmental
compliance including
legislation and tax.
Carbon tax on
agricultural (seed to
farm gate) and
manufacturing (all
steps in cotton
production) emissions
Potential operating
profit impact of £45m
to£60m
B
Updated Scope 3 target based on SBTi FLAG
guidance – see page 50 for specific targets.
100% of cotton used in Fashion, Home & Beauty
(FH&B) products from more sustainable
sources by 2025/26 (% of all cotton used).
Volatility in the supply
ofraw materials caused
by the impact of
climate change.
Extreme weather events
and chronic climate
change impact on
agricultural production
Immaterial
D
N/A
Key to quantification of impact:
A
Critical
B
Major
C
Moderate
D
Minor
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TCFD CONTINUED
Strategy continued
The resilience of our strategy, taking
into consideration different climate-
related scenarios (TCFD strategy C)
continued
Business resilience
The scenario analysis identified that the transition risk
associated with the introduction of a carbon tax in 2030
remains a material risk, with a potential operating profit
impact across Property, Fleet, Protein and Cotton of between
£115m and £165m assuming no mitigation. This risk highlights
the need for continued effort to work towards our 2029/30
emissions reduction targets, with a focus on emissions in our
value chain, which make up 95% of totalemissions.
Through the work to identify emission reduction initiatives
across the business and the projected cost, we have an
understanding of the financial impact of meeting the
emissions reduction targets and have accounted for this in the
three-year plan. Moreover, even if there were to be significant
issues that meant we were unable to deliver on the mitigations,
given the health of the balance sheet, we would be able to
absorb the impact of the carbon tax calculated in Table 2.
To support the requirement for greater collaboration,
research and development, the ‘Plan A Accelerator Fund’
provided funding to 10 projects in 2024/25, that have the
potential to reduce emissions in our supply chain. These
actions will play a role in strengthening the resilience of the
organisation’s strategy to the climate-related risks and
opportunities identified in the near term. More information
on the projects can be found in our ESG Report.
While the physical risks identified in the scenario analysis
are quantified as immaterial, we are aware fresh produce
supply is especially vulnerable to unpredictable weather
patterns and extreme weather events. In the Food business
work has continued to identify root causation, vulnerable
hotspots and the impact on the business when we have to
use contingency sourcing, to ensure we can identify if
physical climate risk is an emerging material risk. This year,
we have implemented a system update to better capture
this data so that moving forward we can review trends in
financial reporting.
Metrics and targets
Metrics used to assess climate-related
risks and opportunities (TCFD metrics
and targets A)
Within the 10 priority areas that enable our Net Zero
Transition Roadmap, highlighted on page 46, are related
targets and metrics. More details on performance against
these targets can be found in our ESG Report. All related
ESG metrics and targets linked to our climate-related
risks and opportunities are also highlighted in our Strategy
section in Table 1. While we consider other climate-related
metrics and targets, our focus remains on our GHG
emissions metrics, which feed into the near and long-term
emissions reduction targets that are aligned to the UN
ambition to limit global warming to 1.5˚C.
An internal price of carbon per tonne has been
calculated, based on in-flight emissions reduction
initiatives. This gives an indication of the potential cost
offuture emissions reduction initiatives to achieve the
targets. Looking ahead, a mechanic for embedding a
carbon price into investment appraisal across the
business will be explored.
The Remuneration Committee’s view remains the same
regarding the inclusion of ESG-related measures in the
Performance Share Plan (PSP). As ESG and climate
commitments are embedded in our business operations,
they are already reflected in the achievement of our
existing bank of PSP strategic measures, so the Committee
agreed that inclusion of a separate ESG measure would
not further our Plan A ambition. This will remain under
consideration in future years.
Scope 1, 2 and 3 greenhouse gas
emissions (TCFD metrics and targets B)
Scope 1 and 2
Scope 1 and 2 carbon emissions, reported in line with the
Greenhouse Gas (GHG) Protocol, result mainly from
operating our logistics fleet and powering stores, offices
and warehouses. The table on page 49 outlines the
2024/25 Scope 1 and 2 emissions, reported in line with the
Streamlined Energy and Carbon Reporting requirements.
Across the business, we capture the data and calculate
these emissions on technology platform Sphera, and this
data has limited assurance by Deloitte. This year, we are
reporting no change in our Scope 1 and 2 emissions.
Moreinformation can be found in our ESG Report.
Scope 3
This year, we updated the business’ carbon inventory as
part of the resubmission of our science-based targets to
the SBTi. The improved inventory continues to evolve
with a greater amount of supplier-specific data within the
most material Scope 3 category, Purchased goods and
services. We have also moved to a different data reporting
methodology for our Food footprint, focusing on product
carbon footprints.
We have continued collaborations with the following industry
partners to measure our product footprint and access more
supplier data so we can have a better understanding of the
emissions hotspots:
•
Higg Index – a suite of tools that provides a standard
measurement of supply chain sustainability across
Fashion and Home.
•
Manufacture 2030 – a cross-industry platform for
Tier1Food supplier partners, to share site-specific
environmental data with grocery retail partners. This
helps to reduce the reporting burden and prioritise
where action should be taken to reduce emissions.
•
Mondra – a data insights platform for calculating
product carbon footprinting that uses M&S recipe
information and secondary emissions data.
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TCFD CONTINUED
Data from Mondra has fed into Food 2023/24 Scope 3
emissions. With Fashion, Home & Beauty, we have worked
with third party, South Pole, to update the inventory for
2023/24, utilising data from the Higg Index.
The chart to the right discloses the updated 2023/24
Scope 3 emissions data, which has been calculated in line
with the GHG Protocol. To report more accurate Scope 3
emissions and be able to bring in supplier-specific data,
we continue to report a year in arrears.
This year, we are reporting an increase in Scope 3
emissions of 0.4m tCO
2
e, compared to our Scope 3
2022/23 base year. This increase has come from volume
growth in our Food business and an expansion in the
scope of our goods not for resale inventory. Through
ourprocess of SBTi revalidation, we have accounted
forgrowth in our plans to achieve our targets and are
confident in the programmes we have in place.
Moreinformation can be found on page 50
(TCFDMetricsand Targets C).
More detail on this can be found in our ESG Report.
Streamlined Energy and
Carbon Reporting
Energy consumption
(GWh)
2024/25 202 3/ 24 ^ % change
UK Operations 1,362 1,382 -1%
International Operations 78 78 0%
Group 1,440 1,460 -1%
^ Performance for last year has been re-stated to reflect data
accuracy improvements.
Energy efficiency initiatives
•
Removed natural gas from our standardised specification
replacing it with fully electric heating and have
implemented this in four stores.
•
Continued to introduce fridge doors which can provide
an energy saving of up to 30%. These are now in place in
59 stores.
•
Transitioning the logistics fleet to lower-emission
alternatives. This year a further 85 lower-emission
vehicles have been introduced – a combination of
compressed natural gas (bio-CNG) and battery
electricvehicles.
•
Optimised the efficiency of the Fashion, Home &
Beauty logistics fleet by increasing the number of
double deck trailers operating in the network by a
further 44, introducing aerodynamic air deflectors to
new bio-CNG vehicles and moving containers inbound
from port to distribution centres via rail.
Greenhouse gas emissions
(000 tonnes CO
2
e)
2024/25 202 3/ 24 ^ % change
Scope 1 emissions 210 206 2%
of which UK 207 203 2%
Scope 2 emissions
(location based) 151 155 -3%
of which UK 116 120 -4%
Total location-based
Scope 1 and 2 emissions 361 362 0%
of which UK 322 323 0%
GHG intensity per 1,000
sq ft of sales floor 19 18 4%
Scope 2 emissions
(market based) 175 234 -25%
Total market-based
Scope 1 and 2 emissions 385 440 -12%
of which UK 351 407 -14%
^ Performance for last year has been re-stated to reflect data
accuracy and methodology improvements.
SCOPE 3 EMISSIONS
2023/24 (tCO
2
e)
Purchased goods & services
– FLAG (Category 1) 51%
Purchased goods & services
– E&I (Category 1) 39%
Capital goods (Category 2) 2%
Fuel and energy related
activities (Category 3) 2%
Upstream transportation and
distribution (Category 4) 3%
Other categories 3%
7.1m
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TCFD CONTINUED
Targets used to manage
climate-related risks and opportunities
(TCFD metrics and targets C)
In 2022, the SBTi approved the business’ near term
science-based targets. However, since then the data and
regulatory landscape has significantly evolved, including
updated guidance for emissions linked to Forest, Land
and Agriculture (FLAG). It has therefore been necessary
for us to review and update these targets in accordance
with the new guidance.
The Scope 3 emissions reduction targets are now updated
to consider FLAG guidance, as well as an updated base
year. This means we now have Scope 3 targets separated
out to cover our FLAG and Energy and Industry (E&I)
related GHG emissions. Scope 1 and 2 targets
remainunchanged.
These near and long-term science-based emissions
reduction targets have been approved with the SBTi.
TheSBTi has verified our net zero science-based target
by 2040.
Overall net zero target
•
M&S commits to reach net zero greenhouse gas
emissions across the value chain by FY2040.
Near-term targets
•
Energy & Industry: M&S commits to reduce absolute
Scope 1 and 2 GHG emissions 55% by FY2030 from a
FY2017 base year.* M&S also commits to reduce
absolute Scope 3 GHG emissions 42% by FY2030
from a FY2023 base year.*
•
FLAG: M&S commits to reduce absolute Scope 3
FLAG GHG emissions 30.3% by FY2030 from a
FY2023 base year.**
•
M&S commits to no deforestation across its primary
deforestation-linked commodities, with a target
date of December 31, 2025.
Long-term targets
•
Energy & Industry: M&S commits to reduce absolute
Scope 1 and 2 GHG emissions 90% by FY2035 from a
FY2017 base year.* M&S also commits to reduce
absolute Scope 3 GHG emissions 90% by FY2040
from a FY2023 base year.*
•
FLAG: M&S commits to reduce absolute Scope 3
FLAG GHG emissions 72% by FY2040 from a FY2023
base year.**
Emissions reduction pathway (mtCO
2
e)
We have line of sight to 86% reduction. Our priority areas as outlined on page 46 inform our emissions reduction pathway to our 2029/30 target.
Given the change of our base year to 2022/23, we have
streamlined our near term targets, focusing on the
approved near term targets (2029/30). As part of the
revalidation process, we have updated the glidepath to
meet these near term targets and have identified 86% of
the reductions required. We will continue to identify work
required to meet the gap.
Our ESG Report outlines all of the targets used to manage
our ESG performance, including those relevant to managing
the business’ climate-related risks and opportunities.
* The target boundary includes land-related emissions and removals
from bioenergy feedstocks.
** The target includes FLAG emissions and removals.
Scope 1 & 2
Base Year –
2016/17
Scope 3
Base Year –
2022/23
Business growth Business as usual
2029/30
Identified
reductions – Food
Identified
reductions–
Fashion, Home
&Beauty
Identified
reductions–
Operations
2029/30 footprint
including identified
reductions
Gap between
2029/30
footprint and target
2029/30
Target
Increase Decrease Total
0.5
6.7
2
9.2
4.5
-0.6
5.2
-2.9
-0.8
-0.3
36% reduction
55% reduction
Marks and Spencer Group plc Annual Report and Financial Statements 202550
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
The table below identifies where information can be found on our commitment to, and management of, colleagues, communities, the environment,
human rights, and anti-bribery and corruption in the last 12 months as required by Sections 414CA and 414CB of the Companies Act 2006.
•
Policies on these matters can be found at corporate.marksandspencer.com.
•
Our business model can be found on page 8.
•
Non-financial key performance indicators can be found on pages 2, 14, 16, 35 and 37.
Reporting requirement Policies, documents and reports which outline our approach More information and outcomes Page numbers
Colleagues Code of Conduct
Inclusion, Diversity & Equal Opportunities Policy
People Principles
Stakeholder Engagement
People and Culture
Board and Senior ManagementDiversity
S.172 Statement
Nomination Committee Report
9 to 11
32 to 35
61
68 to 70
72 to 73
Environmental matters Climate and Energy Policy
Food Waste Policy
Product Packaging Policy
TCFD Report
S.172 Statement
ESG Report 2025
38 to 50
68 to 70
Communities and social
matters
Charity Partnership and Fundraising Policy
Trading Standards and Consumer Protection Policy
Food & Product Safety and Integrity Policy
Farm Animal Health & Welfare Policy
Responsible Marketing Principles
Laws that Protect Grocery Suppliers (GSCOP) Policy
Supply Chain and Responsible Sourcing Policy
Stakeholder Engagement
ESG Committee Report
ESG Report 2025
Grocery Supply Code of Practice (GSCOP) Compliance Report
9 to 11
74 to 75
Human rights Modern Slavery Statement
Human Rights Policy
Code of Conduct
M&S Global Sourcing Principles
Child Labour Procedure
M&S Grievance Procedure for Food and Fashion,
Home&Beauty Supply Chains
ESG Committee Report
ESG Report 2025
74 to 75
Anti-bribery and
anti-corruption
Anti-Bribery and Corruption Policy
Code of Conduct
Other Disclosures 104 to 109
Principal risks Group Risk Management Policy Risk Management Framework
Overview of Principal Risks and Uncertainties
TCFD Report
52 to 53
54 to 58
38 to 50
Marks and Spencer Group plc Annual Report and Financial Statements 2025 51
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
M&S risk governance structure
RISK MANAGEMENT
We continue to maintain a structured
approach to risk management, mindful
that evolution and refinement are needed
to adapt to an ever-changing environment.
Our risk management process allows the business
tomaintain an appropriate risk culture that supports
business operations and assists the Board incomplying
with its obligations under the Corporate Governance Code.
Our framework
The Audit & Risk Committee, under delegated authorityfrom
the Board, is accountable for overseeing the effectiveness
of risk management. This includes identification of the
principal risks facing M&S, monitoring compliance with
the Risk Management Policy and periodically reviewing
risk appetite.
The Executive Risk Committee, comprising a subset of
Executive Committee members, has also been
established to support with oversight of ongoing risk and
control, identify potential emerging issues and monitor
overall adherence to expected standards.
Core risk management accountabilities remain aligned to
the M&S operating model, with each business and function
responsible for the identification, tracking and management
of specific risks. These include a wide variety of changes
and uncertainties that may impact ourbusiness,
colleagues, customers and third-parties.
In addition, where appropriate, cross-business risk
management is supported by specific committees and
similar oversight forums, including safety, ESG,
cyber-security and data privacy.
These activities are facilitated by the Group Risk team,
part of the broader Internal Audit & Risk function, who
work with the accountable business leadership teams to
monitor how we identify key risks and maintain
appropriate standards of control.
Our top-down and bottom-up governance approach
supports this process which is set out on the following
page. Our process is subject toperiodic review andchallenge
with the business andfunctional leadership teams and
the Executive Committee as part of our interim and
year-end reporting activities. Following this, the principal
risks and uncertainties are submitted to the Audit& Risk
Committee for review and agreement prior to being
recommended to the Board for approval.
The principal risks and uncertainties also help inform the
Group’s long-term viability assessment.
STRUCTURED APPROACH
TORISKMANAGEMENT
Top
down
Bottom
up
Group Risk team
M&S Board
Audit & Risk Committee
Executive Committee
Executive Risk Committee
Business and functional
leadership teams
Process and control owners
Marks and Spencer Group plc Annual Report and Financial Statements 202552
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
RISK MANAGEMENT CONTINUED
Our risk management process
1
Setting and reviewing
risk appetite
2
Risk identification
andownership
3
Risk assessment
4
Response and actiontracking
5
Monitoring, reporting andescalation
Who is involved
M&S Board
Audit & Risk Committee
Executive Committee
Executive Risk Committee
Group Risk team
Business and functional
leadershipteams
Process and control owners
Group Risk team
Executive Committee
Executive Risk Committee
Business and functional
leadershipteams
Group Risk team
Executive Committee
Executive Risk Committee
Business and functional
leadershipteams
Process and control owners
Group Risk team
M&S Board
Audit & Risk Committee
Executive Committee
Executive Risk Committee
Business and functional
leadershipteams
Group Risk team
Key activities
•
Our risk appetite statements are
used to define and set appropriate
risk-taking parameters for business
activities. They are subject to annual
review and update, including input
from subject matter experts, such as
our strategy and legal teams and
Executive Committee members,
followed by a full review with the
Executive Risk Committee, members
of the Audit & Risk Committee and
the Chairman.
•
This is followed by consideration and
approval at the Audit & Risk
Committee, prior to being
recommended to the Board.
•
Identification, measurement and
reporting of risks across businesses
and functions within their dedicated
risk registers.
•
Clear ownership is allocated to
relevant members of the business
and functional leadership teams.
•
This also includes the identification
of emerging risks by each business
and function where the full extent
and implications may not be fully
understood but need to be tracked.
•
Risks are assessed against a
consistently applied criteria
considering the likelihood of
occurrence and potential impact to
the Group.
•
Mitigation plans are completed and
monitored by each business and
function, approved by their
leadership teams and appropriate
Executive Committee members.
•
The outputs from the underlying
business and functional reviews are
combined to provide a cross-
business view of common, related
risks which are reported to
appropriate governance forums, and
are aligned with the principal risks
and uncertainties disclosed
externally.
•
The business develops and maintains
plans to mitigate risks to an
appropriate level, in line with risk
appetite.
•
This includes ongoing assessment
and update of risk profiles to reflect
changes, where needed, with
challenge and input provided by
specialist teams within the corporate
functions to support the application
of specific mitigating activities.
•
Independent review and challenge of
the plans form part of the role of the
Group Risk team.
•
Direct updates to the Audit & Risk
Committee by the leadership on a
rolling basis to confirm appropriate
management of key risks and areas
of focus – flexed to respond to
emerging issues.
•
A formal biannual review of risk
registers by the Group Risk team and
other support functions to provide
independent challenge and support
cross-business alignment.
•
The compilation of an overarching
view of principal risks and
uncertainties, considering both
internal strategic and operational
changes and external events.
•
Monitoring performance against risk
appetite through a set of metrics.
Outcomes and reporting
•
Refreshed risk appetite statements
aligned with strategy, core
operations, internal and external
compliance requirements, and our
purpose and values.
•
Risk registers covering all key areas of the business, including current and
emerging risks.
•
Mitigation plans are set for risks that are not yet at target level, aligned with risk
appetite.
•
Quarterly reporting to the Executive
Committee to track and monitor
progress against mitigating action
plans.
•
Direct confirmation to the Audit &
Risk Committee on the management
of key risks.
•
Principal risks and uncertainties
disclosed in the Annual Report and
Half Year Results.
Continuous refinement
Marks and Spencer Group plc Annual Report and Financial Statements 2025 53
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PRINCIPAL RISKS AND UNCERTAINTIES
Our principal risks and uncertainties have been assessed
inaccordance with the risk framework andmethodology
outlined on the previous page.
They also align with our strategic priorities to show where they may impact the
achievement of our long-term business objectives. Thelinkage is shown at the
topof each risk onthe following pages, which map to the below key.
External
An uncertain environment
1
2
3
4
The business continues to operate in an uncertain environment, impacted by a suite of potentially
challenging factors which could individually, or in aggregate, negatively impact our performance.
Some of the factors currently being considered are noted below:
External factors Risk details
Geo-political
environment
•
domestic policy changes and Government intervention; and
•
the consequences of global socio-political tensions and fragility, including
cross-border policy changes, growing tensions in bi-lateral international relations
and ongoing military conflicts including the Middle East and Ukraine.
Cost pressures
•
changes in the cost of goods;
•
supplier resilience risks as they respond to wage inflation, changes in commodity
prices and other input costs; and
•
the impact of climate events on the availability of goods.
Financial
markets
uncertainty
•
the potential risk of global recession;
•
foreign exchange movements;
•
volatility of the global financial system; and
•
changes in interest rates.
Impact of
increased
regulation
•
managing the cost and operational impact of increased regulation in areas such as
recycling, packaging and healthy eating.
Supply chain
disruption
•
disruption to supply of materials and products as a result of geo-political issues,
such as tariffs, cyber-related events or conflicts;
•
significant isolated events, such as catastrophic infrastructure failures, that have a
knock-on impact at a global level;
•
the consequences of extreme weather events; and
•
the impact of animal disease or other epidemics.
Health,
wellbeing and
consumer
behaviour
•
lifestyle changes in consumer behaviour, including:
–
increased demand for healthier foods and activewear;
–
circularity of clothing; and
–
the growth of new disruptors in the market.
Mitigations
•
A strong and varied senior leadership team to focus and respond to a wide range of demands.
•
Enhanced risk processes such as strengthening the Executive Risk Committee remit.
•
Three-year plan, capital allocation and budgeting processes aligned to our strategic objectives which
are reviewed and flexed to respond to external uncertainty.
•
Formal operating reviews through Business Boards enabling executive oversight and governance.
•
Well-established business continuity and incident management processes in place.
•
Disciplined focus on consumer trends to align cost, range, trusted value and availability.
•
Structured supplier engagement to anticipate and support management of business-critical issues.
Oversight by the Board and Executive Committee.
MANAGING OUR
PRINCIPAL RISKS
Risk trajectory
:
Stable
Increasing
Decreasing
Evolving
Monitoring our emerging risks
Our risk profile will continue to evolve as a result of future events and
uncertainties. At present, emerging risks that we are currently monitoring are
intrinsically linked to our principal risks, for example further changes in
corporate governance requirements, significant changes in UK policy and
regulation, global geo-political issues or environmental matters.
Create
exceptional
products
Drive
profitable
salesgrowth
Deliver target
operating
margins
Build the M&S we need to be
Marks and Spencer Group plc Annual Report and Financial Statements 202554
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Strategic
Business transformation
1
2
3
4
Ongoing business transformation is dependent on our ability to prioritise capital spend and resources
to accelerate and successfully implement the suite of ongoing strategic projects. Delays or deferrals
of transformation activity could impact the delivery of our medium and longer term growth ambitions.
Significant change activities that underpin our strategy are noted below:
Strategic pillars Transformation activities
Build the M&S we need to be
•
enhancing our technology infrastructure,
underlying systems and digital capabilities.
Drive profitable sales growth
•
accelerating the modernisation of our UK store
estate.
•
delivering a compelling online and
omnichannel experience.
Deliver target operating margins
•
modernising our supply chain and logistics
operations.
•
transitioning to a simpler and more cost-
effective structure.
Create exceptional products
•
investing in innovation and protection of
intellectual property to continue maintaining
brand differentiation and relevance.
While each initiative is individually significant and has it’s own set of inherent risks, the aggregate impact
of simultaneously delivering these challenging projects creates further risks to successful
implementation, such as timeliness of delivery, cost management and the achievement of returns.
Mitigations
•
Delivery plans are in place with leadership-led governance structures.
•
Programme delivery principles applied for core projects, with clear accountabilities and milestones.
•
Appropriate skills and capabilities, including external support, sourced for delivering specialist projects.
•
Leadership reporting, including benefits tracking in line with spend targets and value outcomes.
•
Periodic reporting on key business and functional initiatives to the Board and to the Audit & Risk Committee.
•
Business board monitoring and oversight.
•
Targeted programme assurance activities.
Oversight by Executive Committee and, where appropriate, supporting sub-committees.
Disruption
Business resilience
1
4
A major operational or resilience failure at a key business location, such as one of our distribution
centres or sourcing locations, could result in business interruption. More broadly, an inability to
effectively respond to large, disruptive external events like extreme weather or infrastructure failures
could also impact our performance.
Context
Our business remains exposed to a broad range of externally driven events and economic uncertainties
that continue to evolve. This includes:
•
a major incident within our supply chain or logistics operations, including our dedicated warehouses
and distribution centres in the UK or overseas, or at support facilities;
•
disruption at a sourcing location or key suppliers where we have built critical dependency, caused by
events such as a natural disaster or civil unrest;
•
significant incidents or long-term resilience issues at key third-parties impacting our operations, such
as cyber-incidents;
•
a major issue impacting one or more of our significant franchise partnerships, either domestically or
internationally;
•
widespread health events impacting people and/or animals; and
•
prolonged industrial action in the UK or abroad.
Mitigations
•
An established Business Continuity (BC) framework underpinned by an experienced team and incident
management processes.
•
Risk-based BC assurance programme and plans that evolve in response to new threats for stores,
sourcing offices, warehouses and IT sites.
•
Validation of critical supplier BC arrangements.
•
Periodic testing of plans for key scenarios, with support from third-parties where needed.
•
A digital platform to support the BC governance programme.
•
Active engagement with external organisations, such as the Retail BC Association and the National
Counter Terrorism Information Exchange.
Oversight by Business Continuity Committee, Executive Committee and, where appropriate,
supporting sub-committees.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
Risk trajectory
:
Stable
Increasing
Decreasing
Evolving
Marks and Spencer Group plc Annual Report and Financial Statements 2025 55
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Disruption continued
Information security
1
4
A significant or wide-reaching data breach or cyber incident, as we have experienced, either directly, at
a key investment or third-party, could result in a loss of information and operational disruption
impacting our customers, colleagues or the business, and a loss of confidence in M&S. This could
adversely impact our reputation, result in legal exposure, and potentially cause business disruption if
rapid remediation and reset is not possible.
Context
The sophistication and frequency of cyber incidents continue to increase, highlighting the information
security threat to businesses. This continues to be intensified by the threat of cyber incidents linked to
current global uncertainties.
The profile of information security and the overall threat landscape for all businesses are changing as a
result of:
•
using data more extensively;
•
introducing new technology and digital solutions;
•
hybrid working models; and
•
use of cloud-based storage systems.
Our use of third-parties for services and/or hosting data also exposes us to risks from vulnerabilities in
their cyber and data controls.
Mitigations
•
Information security and data protection policies with mandatory training for colleagues.
•
A dedicated information security function, with multi-disciplinary specialists, 24-hour Security
Operations Centre and active monitoring of our threat environment, including the use of AI.
•
Incident management plans.
•
Prioritised investment in response to the overall increase in security events.
•
F
ocused security assurance around critical aspects of our operations model and significant change activities.
•
Risk-based cyber-security assurance programme, including assessment of controls in overseas
locations and security obligations included in third-party contracts.
•
Alignment of fraud risk management activities with information security planning.
Oversight by Cyber-Security Steering Committee and Data Protection Committee.
Critical third-parties
Joint ventures, including Ocado Retail, and franchise
2
3
4
The successful long-term performance of any joint venture is inherently complex due to several
factors, including the ownership and/or operational structure and the need to align different
perspectives.
Similarly, the success of our franchise operations is dependent on our ability to work effectively with
both domestic and international partners.
Context
Joint Ventures (JVs)
•
The value of our investment in Ocado Retail Limited (ORL), achievement of our multi-channel food
strategy, protection of our brand and delivery of anticipated trading performance are dependent on
maintaining strong strategic and operational relationships with both ORL and Ocado Group.
•
Similarly, although on a smaller scale, the performance of our Indian JV, M&S Reliance (MSR), will be
influenced by our ability to maintain strategic alignment and harmonised ways of working with
Reliance Industries.
Franchise
•
Achieving growth in both our domestic and international markets relies on maintaining effective
working relationships with our franchise partners, protecting our brand and delivering appropriate
returns for both parties.
Mitigations
•
M&S nominated directors form part of the JV boards at ORL and MSR.
•
Joint approval of strategic and investment plans directing the growth of the business.
•
Appropriately aligned operational and people structures, for example:
–
a dedicated M&S Ocado team to coordinate sourcing, product development, ranging, customer data
and marketing; and
–
oversight from our International leadership team.
•
Monitoring of internal audit processes at JVs by the Audit & Risk Committee.
•
Franchise growth strategy aligned with the three-year plan and joint business plans with partners.
•
Assurance programmes covering key risks, such as food safety, across franchise stores in the UK
andinternationally.
•
Annual confirmation from franchise partners on compliance with key requirements.
Oversight by Ocado Retail Board and Audit Committee, M&S Reliance Board and Audit Committee,
Food Safety Committee and Group Safety Committee.
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
Risk trajectory
:
Stable
Increasing
Decreasing
Evolving
Marks and Spencer Group plc Annual Report and Financial Statements 202556
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
People
Culture, talent and capability
1
4
The success of the business is dependent upon being able to attract, retain and develop the right
talent, skills and capabilities. To do this we maintain a clear focus on;
•
driving a high-performance culture;
•
meeting the financial and wellbeing expectations of our colleagues;
•
effectively managing labour cost pressures; and
•
working collaboratively with our Business Involvement Group and unions.
Any shortfall in executing against these objectives could impact the delivery of core operational
activities and the longer-term strategy, including aspects of our transformation programme.
Context
We employ over 63,000 talented and passionate individuals, making us an attractive brand for current
and future colleagues. However, continued focus is needed on:
•
maintaining a high-performance culture amidst significant changes;
•
managing our investment in competitive pay and benefits for colleagues, alongside the impact of
increasing costs of employment;
•
balancing our investment in colleague development and skills for future success with other business
priorities;
•
navigating a tight labour market in key areas such as technology, digital and artificial intelligence; and
•
adapting to changing colleague expectations and ensuring cultural alignment in areas like
sustainability, diversity, and ethical values.
Mitigations
•
Continued investment in reward that is externally benchmarked.
•
Investment in internal and external talent to strengthen capability in key roles, develop future leaders
and drive internal career progression, including an established framework to support performance,
development, progression and succession plans.
•
Delivery of improvements in core people management systems and processes to drive consistency
and improve decision-making.
•
Embedding consistent standards across the business on assessing, promoting and hiring leaders.
•
Continued focus on driving digital literacy and capability building.
•
A well-established Business Involvement Group which is actively involved in business-wide colleague
engagement and representation at Board meetings.
•
Active monitoring of gender, ethnicity, disability and age profiles.
•
Store-centric culture, with senior leadership and support centre colleagues spending time in stores.
•
Ongoing colleague engagement surveys.
Oversight by Executive Committee.
Compliance and responsibility
Product safety and integrity
1
A failure to prevent and/or effectively respond to a major food or product safety incident, or to
maintain product integrity, could impact customer confidence in our brand and business performance.
Context
Ensuring the safety of our products, including food and all other product categories, is crucial for our
business. We need to manage potential risks to customer health and safety and protect consumer
confidence and trust by maintaining effective internal processes within our core business, at our
suppliers and franchises.
In addition, we remain focused on how external pressures on the food, fashion, home and beauty
industries could affect the availability, quality, provenance and integrity of our products. These
pressures include:
•
cost pressures including the wider impact of tariffs;
•
animal disease;
•
the impact of geo-political events on the availability of products;
•
climate-related events; and
•
cross-border regulatory divergence.
Mitigations
•
Safety policy and compliance standards, terms of trade and product safety specifications are in place,
with clear accountabilities set.
•
Suite of mandatory training for colleagues to complete, as appropriate to roles.
•
Qualified and experienced food and product technology teams.
•
Established governance, assurance and risk management processes to monitor and support the
safety and integrity of our products, such as:
–
risk-based store, supplier and warehouse audit programmes in place, including at our franchise
partners; and
–
monitoring of product quality and customer complaints with corrective actions implemented
whererequired.
•
Incident management processes and planning for safety-related incidents.
•
Regular engagement with expert bodies to understand and respond to changes in safety standards.
•
Specific provisions in third-party brand contracts.
Oversight by Group Safety Committee and Food Safety Committee.
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
Risk trajectory
:
Stable
Increasing
Decreasing
Evolving
Marks and Spencer Group plc Annual Report and Financial Statements 2025 57
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Compliance and responsibility continued
Corporate compliance
1
2
3
4
A failure to deliver consistently against an increasingly demanding set of legal and regulatory
obligations or broader corporate responsibility commitments could undermine our reputation as a
responsible retailer. The consequences include a loss of trust by customers, investors and other
stakeholders, and/or legal exposure or regulatory sanctions which could negatively impact our ability
to operate and/or cause financial losses and harm.
Context
The increasing number of legal and regulatory requirements is putting pressure on businesses across
the industry, impacting the cost of compliance and operational efficiency. This includes:
•
responding to regulatory changes, such as those impacting packaging or corporate governance
standards more generally;
•
dealing with diverging regulations across countries, especially in the EU; and
•
navigating external economic challenges, which heighten the risk of mishandling ethical and social
responsibilities, especially through supply chains.
Non-compliance may result in fines, criminal prosecution for M&S and/or colleagues, litigation, requiring
investment to rectify breaches, disruption or cessation of business activity, as well as impacting our
brand and reputation.
Mitigations
•
Code of Conduct in place, underpinned by policies and procedures in core areas.
•
Mandatory training programmes for areas such as safety, information security, competition law, data
privacy and anti-bribery and corruption.
•
Established in-house Legal team with dedicated subject-area leaders and regulatory expertise,
supported by external advisers where necessary.
•
Mandatory Global Sourcing Principles set and shared with our supply base and other third-parties.
•
Dedicated Group Data Protection Officers team and a network of Data Compliance Managers.
•
Assurance and monitoring systems covering legal, regulatory, ethical and social considerations.
•
A confidential reporting line allowing colleagues and other stakeholders to report concerns.
•
Worker voice programme in the Food business and transparency initiatives within Fashion, Home & Beauty.
•
Active monitoring of customer feedback and public sentiment on compliance and responsibility.
•
Proactive engagement with regulators, legislators, trade bodies and policy makers.
Oversight by the Board, Executive Committee, ESG Committee, Group Safety Committee, Food Safety
Committee and Data Protection Committee.
Climate change and the environment
1
3
4
There is increasing focus and pressure from carbon-conscious stakeholders for the business to
operate in a more environmentally sound and sustainable manner.
A failure to take appropriate action to reduce the environmental impact of our business and progress
towards our science-based targets, linked to our directly controlled operations and externally within
our supply chain, as well as effectively manage the consequences of climate-related risks could
impact our brand, future trading performance and other business costs, including financing.
Context
We need to monitor and manage the physical impact of climate change and extreme weather events to
reduce its effects on our business. This includes the:
•
availability of raw materials and food products;
•
locations where we source and operate;
•
condition of our buildings; and
•
infrastructure required to move product to stores and customers.
Future performance will depend on our ability to transition to a low-carbon economy by:
•
balancing business decisions with environmental responsibility and regulations;
•
adapting to growth in the circular economy, waste reduction, low-carbon products, sustainable and
recycled fabrics; and
•
responding to new regulatory measures while effectively managing the associated costs.
Mitigations
•
Established Plan A programme with clear accountabilities in each area of the business.
•
Science-based targets agreed by the Board and validated by the SBTi (Science Based Targets initiative).
•
Established policies and standards covering product and raw material standards, clothing quality and
environment impact – also shared with suppliers.
•
Awareness training in place for colleagues.
•
Established assurance processes.
•
Experienced ESG team members, with experts embedded in key areas of the business.
•
An established forum to oversee the delivery of our carbon commitments and ESG risks.
•
Engagement and planning with partners and suppliers to support their decarbonising activities.
•
Proactive engagement with Government bodies and industry experts.
Oversight by ESG Committee.
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
Risk trajectory
:
Stable
Increasing
Decreasing
Evolving
Marks and Spencer Group plc Annual Report and Financial Statements 202558
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
OUR APPROACH TO ASSESSING LONG-TERM VIABILITY
The UK Corporate Governance Code requires us to issue
a ‘viability statement’ declaring whether we believe the
Group can continue to operate and meet its liabilities,
considering its current position and principal risks.
Theoverriding aim is to encourage directors to focus
onthe longer-term and be more actively involved in risk
management and internal controls. In assessing viability,
the Board considered several key factors, including our
business model (see page 8), our strategy (see pages 12 to
21), our approach to risk management (see pages 52 to 53)
and our principal risks and uncertainties (see pages 54
to58).
The Board is required to assess the Group’s viability over
a period greater than 12 months, and in keeping with the
way that the Board views the development of our business
over the long-term, a period of three years is considered
appropriate for business planning, measuring performance
and remunerating at a senior level. This three-year period
aligns to the Group’s annual strategic review exercise
conducted within the business and reviewed by the Board
and captures a large proportion of the Group’s investment
into its ongoing transformation programme as well as the
maturity of its June 2025, May 2026, July 2027 and
December 2027 bonds.
The Group continues to maintain a robust financial
position with available liquidity of £1.7bn, including cash
and cash equivalents of £864.5m and access to a committed
revolving credit facility (RCF) of £850.0m which expires in
June 2027. The facility contains a financial covenant,
being the ratio of earnings before interest, tax, depreciation
and amortisation; to net interest and depreciation on
right-of-use assets under IFRS 16. The covenant is
measured semi-annually.
For the purpose of assessing the Group’s viability, the Board
identified that, although all of the principal risks detailed
onpages 54 to 58 could have an impact on Group
performance, the following risks pose the greatest threat
tothe business model, future performance, solvency and
liquidity of the Group and are therefore the most important
to the assessment of the viability of the Group:
•
An uncertain environment.
•
Business transformation.
•
Joint ventures, including Ocado Retail and franchise.
•
Culture, talent and capability.
In assessing viability, the Board considered the position
presented in its approved budget and three-year plan.
The process adopted to prepare the financial model for
assessing the viability of the Group involved collaborative
input from several functions across the business to
model a severe but plausible downside scenario.
The severe but plausible downside scenario includes the
following assumptions:
•
There will be a period of economic recession in 2025/26,
resulting in a reduction in sales growth of 2.0-4.0%
across all three business units compared to the budget
and three-year plan.
•
A delay on transformation benefits results in
incremental sales expected from the transformation
declining by 7.5%, 15% and 30% respectively across the
three-year period.
•
Ocado Retail Limited experiences limited customer
demand, with a 5.0% reduction in volume growth each
year across the three-year period compared to the
budget and three-year plan.
The Board has also considered the potential impact of
changes to environmental factors which may affect the
business model and performance in the future. As set out
in the Task Force on Climate-related Financial Disclosures
(TCFD) section on pages 38 to 50, no material impact on
the Group’s financial performance is considered to exist
in the short-term.
The impact of the severe but plausible downside scenario
has been reviewed against the Group’s projected cash
flow position and financial covenant over the three-year
viability period. In the event of this scenario materialising,
mitigating actions would be available, including, but not
limited to, deferring or cancelling discretionary spend
(including discretionary bonuses), reducing returns to
shareholders and reducing capital expenditure.
As a result, even under this scenario, which the Board
considers reflects a plausible, but remote, outcome,
theGroup would continue to have sufficient liquidity
andheadroom on its existing facilities and meet the
measurement criteria against the revolving credit facility
financial covenant. The Audit & Risk Committee reviews
the output of the viability assessment in advance of final
evaluation by the Board. The Board has also satisfied
itself that it has the evidence necessary to support the
statement in terms of the effectiveness of the internal
control environment in place to mitigate risk.
Reverse stress testing has also been applied to the model
to determine the decline in profitability that the Group
could absorb before exhausting the Group’s total liquidity.
Such a scenario, and the sequence of events which could
lead to it, is considered to be extremely remote, as it
requires EBITDA reductions of more than 30% per annum
over the three-year assessment period compared to the
budget and three-year plan before total liquidity is
exhausted. Further, it only includes very limited mitigations,
comprising the removal of bonus, utilisation of centrally
held contingency, removal of dividends and a modest
reduction in growth capex. While the occurrence of one
or more of the principal risks has the potential to affect
future performance, none of them are considered likely
either individually or collectively to give rise to a trading
deterioration of the magnitude indicated by the reverse
stress testing and to threaten the viability of the Group
over the three-year assessment period.
Having reviewed the current performance, forecasts,
debt servicing requirements, total facilities and current
liquidity, the Board expects the Group to have adequate
resources to continue in operation, meet its liabilities as
they fall due, retain sufficient available cash across all
three years of the assessment period and not breach the
covenant under the revolving credit facility. The Board
therefore expects the Group will remain commercially
viable and the Viability Statement can be found on
page108.
Stuart Machin
Chief Executive Officer
20 May 2025
Marks and Spencer Group plc Annual Report and Financial Statements 2025 59
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CHAIRMAN’S GOVERNANCE OVERVIEW
The Board has played a
crucial role in holding
management to account;
ensuring decisions have
been rigorously tested.
Archie Norman
Chairman
As we continue to invest in our transformation, the Boardhas
played a crucial role in holding management to account; ensuring
decisions made have been rigorously tested and are focused
ondelivering improved sales, profit and market share across
ourbusinesses.
The Governance Report that follows is a concise summary of the
Board’s role, activities and considerations. More information on
our Board, Committees and governance framework is available at
corporate.marksandspencer.com.
Board changes
Board succession has been a focus this year. In May 2024, Andrew
Fisher announced his departure from the Board after nearly nine
years. Fiona Dawson succeeded him as Senior Independent
Director and Chair of the Remuneration Committee. In January
2025, Alison Dolan joined the Board as Chief Financial Officer
after an extensive search, with Jeremy Townsend remaining in
post until May 2025 to ensure a seamless handover. More
information on Board changes on pages 72 to 73.
Transformation
Our strategy is dependent on three critical enablers: building a
high-performance culture; transforming the digital experience
for customers and our technology infrastructure; and disciplined
capital investment and allocation. All of these have been recurring
topics of discussion for the Board this year. More information on
our activities and key decisions on pages 66 to 67.
Dividend
We announced in May 2025 that we propose to pay a final dividend
of 2.6p per share. This, combined with the interim dividend paid in
January 2025, means the Company will have paid a total dividend
of 3.6p for 2024/25.
Digital-first Annual Report
This year’s Annual Report is in landscape, enhancing online
accessibility and reflecting our commitment to a digital-first
approach. This shift in format allows for more interactive and
engaging content, including more integrated videos and links
than ever before, making it easier for shareholders to find key
information quickly.
UK Corporate Governance Code
The UK Corporate Governance Code 2018 (the Code), which is
available to view on the Financial Reporting Council’s website,
isthestandard against which we measured ourselves in 2024/25.
The Board confirms that M&S complied with the provisions set
out in the Code for the period under review. Details on how we
applied the Code’s principles and how governance operates
atM&S have been summarised throughout this Governance
section and elsewhere in this Annual Report as detailed below.
1. Board Leadership and Company Purpose Page(s)
A. Effective board 62-65
B. Purpose, values and culture 8-11, 32-35
C. Governance framework
64-65
D. Stakeholder engagement 9-11, 68-70, 87
E. Workforce policies and practices 32-35
2. Division of Responsibilities
F. Role of chair 64
G. Independence 73
H. External commitments and conflicts of interest 62-63
I. Board resources 64-65
3.
Composition, Succession and Evaluation
J. Appointment to the board 72-73
K. Board skills, experience and knowledge 61-63
L. Annual board evaluation 71
4.
Audit, Risk and Internal Control
M. External auditor and internal auditor 81-83
N. Fair, balanced and understandable review 80
O. Internal financial controls and risk management 76-81
5.
Remuneration
P. Linking remuneration to purpose and strategy
84-86, 89-90,
92-96
Q. Remuneration policy review 89-90, 103
R. Performance outcomes in 2024/25 85-86, 91-97
Our full Corporate Governance Statement is available online at
corporate.marksandspencer.com/about-us/corporate-governance.
Use the QR
code to watch
Archie’s video.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202560
CHAIRMAN’S GOVERNANCE OVERVIEW CONTINUED
Total dividend for
2024/25
3.6p
Closer to customer
hours worked
206,472
Female directors
60%
Key highlights Board tenure (as at year end)
Skills and experience of the Board
2024/25
Female 40%
Male 60%
2024/25
Female 60%
Male 40%
2024/25
Ethnic minority 10%
White 90%
2024/25
Ethnic minority 10%
White 90%
2023/24
Ethnic minority 9%
White 82%
Not specified 9%
2023/24
Ethnic minority 10%
White 80%
Not specified 10%
2023/24
Female 30%
Male 70%
2023/24
Female 55%
Male 45%
Board gender Executive Committee gender
(as at publication date)
Board ethnicity Executive Committee ethnicity
(as at publication date)
Archie Norman
Stuart Machin
Alison Dolan
Evelyn Bourke
Fiona Dawson, CBE
Ronan Dunne
Tamara Ingram, OBE
Justin King, CBE
Cheryl Potter
Sapna Sood
7 years 7 months
2 years 11 months
3 months
4 years 2 months
3 years 11 months
2 years 8 months
4 years 10 months
6 years 3 months
2 years 1 month
4 years 10 months
Retail and
hospitality
Food and
beverage
Clothing and
textiles International Consumers Logistics Marketing Technology Strategy Finance
Risk
management
Property and store
development
Organisational
design and culture Sustainability
Corporate transactions,
legal and regulatory
1
2
3
4
1
2
1
2
1
2
3
4
1
2
4 2
3
4 2
4
1
2
3
4
1
2
3
4
3
4
3
4 2
3
4
3
4
1
2
3
4 2
3
4
Archie Norman
Stuart Machin
Alison Dolan
Evelyn Bourke
Fiona Dawson
Ronan Dunne
Tamara Ingram
Justin King
Cheryl Potter
Sapna Sood
Nick Folland
Link to strategic priorities
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be General Counsel & Company Secretary
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 61
OUR BOARD
Archie Norman
Chairman
N
R
Appointed:
September 2017
Current appointments:
•
Chairman of Signal AI.
•
Chairman of Global Counsel.
•
Senior Independent Director
of Bridgepoint Group plc.
•
Chairman of M Group.
Prior experience:
•
Experienced Chairman and
former Chief Executive having
led major transformation
programmes at ITV, Lazard,
Asda andEnergis.
•
Lead Director at the
Department for Business,
Energy & Industrial Strategy
from 2016–2020.
•
Deputy Chairman of
ColesLimited.
•
Only FTSE 100 Chairman
tobeelected as a Member
ofParliament.
Meeting attendance:
Board (11/11)
Nomination Committee (5/5)
Audit & Risk Committee (5/5)*
Remuneration Committee (4/4)
ESG Committee (6/6)*
Stuart Machin
Chief Executive Officer
Appointed:
May 2022
Current appointments:
•
Director of M&S’ JV with Ocado,
Ocado Retail Limited.
Prior experience:
•
M&S Food MD and joint COO.
•
CEO of Steinhoff UK.
•
Senior roles at Wesfarmers, as
CEO of Target Australia and
COO of Coles Supermarkets.
•
Various leadership roles at
Sainsbury’s, British Home
Stores, Tesco and Asda.
•
Extensive experience
ofdelivering retail
transformation and a deep
understanding of operations,
trading, marketing and online.
Meeting attendance:
Board (11/11)
Audit & Risk Committee (4/5)*
Remuneration Committee (4/4)*
Alison Dolan
Incoming Chief Financial
Officer
Appointed:
January 2025
Current appointments:
•
Non-Executive Director of
Pearson plc.
Prior experience:
•
CFO of Rightmove plc.
•
Senior finance roles at Sky
plc, including at Sky
Technology and Sky Business.
•
Extensive commercial and
operational finance
experience, particularly
within digital businesses.
Meeting attendance:
Board (2/2)
Audit & Risk Committee (1/1)*
Chair and Executive Directors Committee Chairs
Committee key:
A
Audit & Risk
E
ESG
N
Nomination
R
Remuneration Committee Chair
Fiona Dawson
Senior Independent Director
R
N
Appointed:
May 2021
Current appointments:
•
Non-Executive Director of LEGO.
•
Non-Executive Director and
Chair of the Sustainability
Committee of Kerry Group plc.
•
Non-Executive Director and
Chair of the Remuneration
Committee of Reckitt Benckiser
Groupplc.
•
Trustee of The Social Mobility
Foundation.
•
President of the Chartered
Management Institute.
Prior experience:
•
Over 30 years at Mars Inc.,
latterly as Global President
Food, Multisales and Global
Customers and a member of
the Global Leadership Team.
•
Chair of the Women’s
BusinessCouncil.
•
President of the Institute of
Grocery Distribution and
VicePresident of the Food
andDrink Federation.
Meeting attendance:
Board (11/11)
Nomination Committee (5/5)
Remuneration Committee (4/4)
Evelyn Bourke
Non-Executive Director
A
N
Appointed:
February 2021
Current appointments:
•
Non-Executive Director of
Admiral plc.
•
Senior Independent Director
of AJ Bell plc.
•
Chair of the UK Board of
GenesisCare and Non-
Executive Director of
GenesisCare Cayman.
Prior experience:
•
Non-Executive Director of the
Bank of Ireland.
•
CEO and CFO of Bupa Group.
•
Leadership roles at Standard
Life and Friends Provident.
•
Extensive experience in
financial services.
Meeting attendance:
Board (11/11)
Nomination Committee (5/5)
Audit & Risk Committee (5/5)^
Tamara Ingram
Non-Executive Director
E
R
N
Appointed:
June 2020
Current appointments:
•
Non-Executive Director of
Reckitt Benckiser Group plc.
•
Non-Executive Director of
Marsh McLennan.
•
Non-Executive Director of
Intertek Group.
•
Deputy Chair of Ofcom.
Prior experience:
•
Held leadership roles at WPP
since 2002, including as
Non-Executive Chair of
Wunderman Thompson and
CEO of J Walter Thompson.
•
Held the roles of CEO and
Chair at Saatchi and Saatchi.
•
Led renowned marketing
campaigns for household
brands around the world and
delivered cultural and
business transformation at
pace within her own
businesses as well as on
behalf of clients.
Meeting attendance:
Board (10/11)**
Nomination Committee (4/5)**
Remuneration Committee (3/4)**
ESG Committee (6/6)
More information on the Board’s skillset can be found on page 61.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202562
OUR BOARD CONTINUED
Justin King
Non-Executive Director
A
N
Appointed:
January 2019
Current appointments:
•
Chair of Allwyn
Entertainment Limited.
•
Chair of Dexters Group.
•
Chair of OVO Energy.
Prior experience:
•
CEO of Sainsbury’s.
•
Head of Food at M&S.
•
Over 40 years’ experience in
large retail operations and
transformations, with various
positions at Asda, Häagen-
Dazs, PepsiCo and Mars.
Meeting attendance:
Board (11/11)
Nomination Committee (5/5)
Audit & Risk Committee (5/5)
Sapna Sood
Non-Executive Director
E
N
Appointed:
June 2020
Current appointments:
•
President, Adecco APAC.
•
Advisory Board member of
Imperial College Business
School.
Prior experience:
•
Chief of Staff to the Group
CEO at Adecco.
•
Senior executive at
CompassGroup.
•
Non-Executive Director at
Kering SA.
•
In-depth knowledge of
running complex supply
chains, including in food
andclothing.
•
Experience of leading large
transformation programmes.
Meeting attendance:
Board (9/11)**
Nomination Committee (2/5)**
ESG Committee (4/6)**
Cheryl Potter
Non-Executive Director
E
N
Appointed:
March 2023
Current appointments:
•
Non-Executive Director of
Best Secret.
•
Board member (former chair)
of Level 20, a not-for-profit
focused on getting more
women into senior investing
roles in the private
equityindustry.
•
Founding Patron of The
Prince’s Trust Women
Supporting Women scheme.
Prior experience:
•
Former head of the global
consumer team at private
equity firm Permira.
Meeting attendance:
Board (11/11)
Nomination Committee (4/5)**
ESG Committee (6/6)
Ronan Dunne
Non-Executive Director
A
N
Appointed:
August 2022
Current appointments:
•
Non-Executive Chair of Six
Nations Rugby.
•
Trustee of the John King Brain
Tumour Foundation.
•
Non-Executive Chair of Kore
Labs Limited.
Prior experience:
•
Extensive international
experience in the digital
telecoms industry, as CEO of
Verizon Consumer Group and
CEO of Telefónica UK (O2).
•
Financial expertise having
previously held Chief
Financial Officer roles.
•
Led businesses through
technological and people
transformation.
Meeting attendance:
Board (11/11)
Nomination Committee (5/5)
Audit & Risk Committee (5/5)^
Non-Executive Directors
* Attended by standing invite.
** Unable to attend due to prior business commitments.
^ Has recent and relevant financial experience.
Senior leadership
Nick Folland
General Counsel & Company Secretary
Appointed:
February 2019
Nick has extensive legal and governance experience, having
been General Counsel & Company Secretary in FTSE 100
businesses since 2001, originally qualifying as a solicitor
atLinklaters and Paines in 1993.
Meeting attendance:
Board (10/11)*
Audit & Risk Committee (5/5)*
Remuneration Committee (4/4)*
Jeremy Townsend
Outgoing Chief Financial Officer
Appointed:
November 2022
Jeremy brings a wealth of financial leadership experience
having held senior financial and non-executive roles across
several public companies, most recently as the Group CFO
ofRentokil Initial plc.
Meeting attendance:
Board (11/11)*
Audit & Risk Committee (5/5)*
Remuneration Committee (3/4)*
Full biographies can be found at:
corporate.marksandspencer.com/about-us/
our-leadership.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 63
OUR GOVERNANCE FRAMEWORK
Our governance framework enables agile and effective decision-making,
whileensuring the Group has established and robust governance practices in place.
Board Committees
The Board delegates certain matters to its four main Committees. The Committee
Chairs regularly update the Board on their respective Committee’s activities. More
information on meeting attendance, Committee members, their skillsand experience
can be found on pages 61 to 63. The full terms of reference for each Committee can be
found onourwebsite.
See Board Committee roles on page 65.
Board of
Directors
The Board is responsible
for setting M&S’ strategy
and ensuring the Company
has a clear vision, purpose
and culture to achieve this.
Itoversees the Group’s
conduct and operations to
ensure the delivery of long-
term value for M&S for the
benefit of our shareholders
and broader stakeholders.
Board roles
Our Board is comprised of
thefollowing:
•
Chairman
•
Chief Executive Officer
•
Chief Financial Officer
•
Senior Independent
Director
•
Non-Executive Directors
A full breakdown of the Board’s
roles and responsibilities
is available at corporate.
marksandspencer.com/about-
us/corporate-governance.
Executive
Committee
The Executive Committee (ExCo) is
our internal leadership team
established and led by the CEO. It
is responsible for the execution of
the M&S strategy and for the
day-to-day management of the
business. ExCo members provide
updates at Board meetings and
maintain regular dialogue with the
Board to facilitate support and
receive constructive challenge.
Senior Management Forums
Our Senior Management Forums support specific business
needs or strategic priorities, meeting as and when required.
Decision-making is delegated to them by the Group’s delegation
of authority or Board approved terms of reference.
These include:
•
Shares & Dealing Committee
•
Disclosure & Oversight Committee
•
Property Committee
•
Executive Risk Committee
•
Compliance Monitoring Committee
•
ESG Business Forum
•
Data Committee
Business Boards
Our Business Boards oversee the day-to-day running of
theGroup’s key business units. They manage, monitor and
provide executive input to support strategic and operational
decision-making, and the delivery of transformation projects.
These include:
•
Food
•
Fashion, Home & Beauty
•
International
•
Digital & Technology
•
Stores
•
Property & Store Development
Nomination
Committee
ESG
Committee
Audit & Risk
Committee
Remuneration
Committee
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202564
OUR GOVERNANCE FRAMEWORK CONTINUED
Stuart Machin
Chief Executive
Officer
Alison Dolan
Incoming Chief
Financial Officer
John Lyttle
Managing Director
of Fashion, Home &
Beauty
Rachel Higham
Chief Digital and
Technology Officer
Alex Freudmann
Managing Director
ofFood
Sacha Berendji
Operations
Director
Mark Lemming
Managing Director
of International
Victoria McKenzie-
Gould
Corporate Affairs
Director
Sarah Findlater
People Director
Nick Folland
General Counsel &
Company Secretary
Biographies for all ExCo
members are available at
corporate.marksandspencer.
com/about-us/our-leadership.
Board Committees
Nomination Committee
•
Reviews Board and Committee
structure, composition and diversity.
•
Monitors the Company’s leadership and
succession needs, keeping under review
the skills and experience of the Board to
ensure these remain suited to the
successful execution of our strategy.
•
Oversees the process for nomination,
induction and evaluation of directors.
Read more on pages 72 to 73.
ESG Committee
•
Ensures the Group’s ESG strategy is
aligned to the Company’s strategy and
remains fit for the future.
•
Reviews the effectiveness and
successful delivery of the ESG strategy
and targets.
•
Considers and recommends all
ESG-related reporting for the
Board’sapproval.
•
Advises the Audit & Risk Committee on
ESG-related risks, including climate-
connected risks.
Read more on pages 74 to 75.
Audit & Risk Committee
•
Monitors the integrity of the financial
statements, reviewing the significant
financial reporting judgements
withinthem.
•
Maintains an appropriate relationship
with the external auditor.
•
Reviews the internal audit programme
and effectiveness of the Internal Audit
&Risk function.
•
Reviews and assesses the Group’s
riskframework, and systems of
internalcontrol.
Read more on pages 76 to 83.
Remuneration Committee
•
Responsible for remuneration policy,
performance-related pay schemes and
share-based incentive plans, ensuring
practices are designed to support and
promote the long-term success of the
Company and delivery of its strategy.
•
Reviews Chairman, executive and senior
management remuneration frameworks
in the context of our culture and wider
workforce remuneration.
Read more on pages 84 to 103.
Executive Committee
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 65
BOARD ACTIVITIES
The following pages set out the Board’s key areas of focus during the year.
Breakdown of Board activities
Meeting agendas, agreed in advance by the Chairman, CEO and Company Secretary,
combine a balance of regular standing items as outlined below:
April
Deep dive: the Food Network Strategy and the
importance of investing in distribution centres
fit for the future.
3
4
Approval: c.£2.9m of funding for the eFREIGHT
2030 Electric Vehicle grant. This enabled the
purchase of up to five electric HGVs for the
Fashion, Home & Beauty fleet, helping to deliver
our net zero commitments.
3
4
May
Announcement: publication of 2023/24 Full
Year Results.
Discussion: learnings from the Castle
Donington technology outage, including
improvements to our business continuity plans.
2
4
Approval: £190m bond buyback exercise
completed, optimising the balance sheet.
4
Announcement: appointment of Alison Dolan
as incoming CFO.
June
Event: Away Day to examine the strategic issues
facing the business and consider how to
accelerate the pace ofchange:
•
Ensuring the benefits of the Fashion, Home &
Beauty end-to-end transformation
programme are delivered.
•
Building a sustainable and resilient supply
base that is capable of supporting Food’s
growth ambitions.
•
Setting out a plan to deliver the Fashion, Home
& Beauty Online growth ambitions.
•
Defining the role of third-party brands at M&S.
1
2
3
4
2024
Strategy and transformation
During these updates, the Board considers key areas of strategy and progress made
towards delivery of the plan to Reshape for Growth, advising on direction of travel and
areas of focus. This year, the Board used these sessions to challenge management to
accelerate the pace of change.
Deep dives
Senior leadership and business unit heads present deep dive sessions on areas
ofimportance and focus, giving the Board an opportunity to provide feedback
andguidance.
Executive updates
Executive directors provide high-level operational and financial updates, summarising
the key challenges and actions taken during the month, and a look forward to priorities
for the coming period. These include consideration of headwinds and macroeconomic
events facing the business, and any necessary responses.
Governance and Committee reports
The General Counsel & Company Secretary provides a summary of the legal
activitiesfrom the period, along with any upcoming changes to law or regulation.
Contracts for approval beyond the Board-approved delegated authorities are
presented for consideration, as well as year-end statutory reporting for publication.
CommitteeChairs also present regular updates on their Committee meetings,
highlighting any decisions and key issues for the Board’s attention.
Read more on how the Board fulfils its duty under Section 172 of the Companies Act 2006
intheseactivities on pages 68 to 70.
Strategy and transformation 36%
Deep dives 20%
Executive updates 19%
Governance and Committee reports 25%
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202566
BOARD ACTIVITIES CONTINUED
July
Event: Annual General Meeting 2024.
Deep dive: first impressions from the new
Managing Director of International on the
business and detailed plans to reset forgrowth.
2
September
Approval: restructuring of M&S’ pension
funding obligations, delivering £120m in-year
cash savings, as well as ongoing reductions in
annual funding commitments.
4
Deep dive: how to maximise customer benefits
through the Sparks transformation programme
to drive shopper loyalty.
1
2
4
Deep dive: first impressions from the new Chief
Digital and Technology Officer and plans to
modernise M&S’ legacy technology systems.
3
4
October
Discussion: driving a high-performance culture
and the best ways of embedding this change.
4
Deep dive: updates on progress made against
the three-year plan and preparing for the next
wave of growth:
•
Food: the importance of ‘fortress’ factory
plans in supporting volume growth aspirations.
•
Fashion, Home & Beauty: ensuring
third-party brands sit well within M&S’
customer proposition.
•
International: resetting partnership models
to support improved performance in
localmarkets.
•
Retail: simplifying operations and embedding
the high-performance culture in stores.
•
D&T: addressing the business’ technology
needs in a methodical way.
•
Plan A: assessing the impact of the ORL
consolidation on sustainability reporting.
1
2
3
4
November
Announcement: publication of the 2024/25 Half
Year Results.
Discussion: impact of the Government’s
Autumn 2024 Budget, particularly the increase
in National Insurance contributions.
Event: Capital Markets Event to provide
institutional investors and analysts with
updateson execution of the Reshaping
forGrowth strategy.
Approval: first phase of the Food Network Plan
– to progress with identifying a site for a new
national distribution centre.
3
4
December
Deep dive: first impressions from the new
Director of Lingerie on strength of the
proposition and areas for improvement.
1
Deep dive: National Business Involvement
Group (BIG) Chair shared colleague views on the
cultural shift and simplifying ways of working.
Responses to feedback received were
implemented during the year.
4
January
Announcement: publication of the 2024/25
Christmas Trading Results.
Approval: one-off investment in the Digital &
Technology Evolution Programme worth £324m
to reshape M&S’ core technology foundations.
3
4
Event: Strategy Away Day to discuss and
challenge progress and reprioritise areas of
focus, particularly in light of headwinds facing
the business:
•
Progress made to structurally lower our cost
base and key initiatives for each business area
to drive further efficiencies.
•
Assessing the updated Fashion, Home &
Beauty Online growth plan.
1
2
3
4
March
Deep dive: consideration of our 2025/26 budget,
including how best to navigate cost headwinds
resulting from macro factors without it
damaging or undermining our transformation.
3
4
Discussion: dividend policy and maintaining a
balance between internal and external priorities.
4
2025
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 67
S.172 STATEMENT
Alongside the key decisions outlined, the table below highlights other sections of this
report which explain how the directors have had regard to s.172 factors.
S.172 factor Further information can be found on
(a) The likely consequences
ofany decisions in the
long-term
Our Business Model: page 8
Strategic Progress: pages 12-21
(b) Interests of employees Our Business Model: page 8
Stakeholder Engagement: page 9
People and Culture: pages 32-35
Remuneration Committee Report: pages 84-103
(c) Fostering the company’s
business relationships with
suppliers, customers and
others
Our Markets: pages 6-7
Our Business Model: page 8
Stakeholder Engagement: pages 9-11
Strategic Progress: pages 12-21
(d) Impact of operations on the
community and environment
Our Business Model: page 8
Stakeholder Engagement: page 11
Strategic Progress: pages 12-21
ESG Review: pages 36-37
TCFD: pages 38-50
ESG Committee Report: pages 74-75
corporate.marksandspencer.com/ESGreport2025
(e) Maintaining a reputation
for high standards of
business conduct
Our Business Model: page 8
TCFD: pages 38-50
Non-Financial and Sustainability Information Statement: page 51
Risk Management: pages 52-58
Audit & Risk Committee Report: pages 76-83
(f) Acting fairly between
members of the company
Our Business Model: page 8
Stakeholder Engagement: page 10
Strategic Progress: pages 12-21
Remuneration Committee Report: pages 84-103
The directors thoughtfully consider the varied priorities of each stakeholder when
making decisions, working to promote and protect M&S’ long-term success and
reputation. This responsibility is set out in Section 172(1) (a) to (f) of the Companies
Act 2006 (s.172).
This statement outlines how the Board has had regard to the matters detailed in
s.172, including highlights from two key Board decisions made this year.
How the directors fulfil
theirs.172 duty
Diverse set of skills, knowledge
and experience
•
The Board’s diverse skills and
experience enable informed
decision-making that promotes
long-term success while considering
stakeholderneeds.
•
More detail on Board composition,
including the skills and experience of
our directors, can be found on pages
61 to 63.
Board information
andmonitoring
•
The Board receives detailed papers
and updates from management which
are challenged and debated to
consider differing stakeholder views.
•
Progress updates from management
allow the Board to review and adjust
plans as situations evolve.
•
A summary of the Board’s activities this
year can be found on pages 66 to 67.
Board discussion
•
Directors constructively challenge
and contribute to discussions,
offering perspectives, advice and
strategic guidance.
•
More information can be found on
pages 66 to 67 and 71.
Strategic direction and culture
•
The Board sets the strategic direction,
values and culture of the Company,
ensuring stakeholder considerations
are central to decision-making.
•
More information on culture is on
pages 32 to 35, and more detail on our
strategy is on pages 12 to 21.
Stakeholder engagement
•
Engagement helps directors
understand stakeholder needs and
make informed decisions.
•
Highlights of stakeholder
engagement that has taken place this
year can be found on pages 9 to 11.
•
Examples of our Non-Executive
Directors’ engagement activities with
various stakeholders during the year
can be found on page 70.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202568
While many hoped for a more stable UK
economy in 2024/25, our operating costs
are on track to significantly increase,
principally driven by external factors:
increases to employer NI contributions;
FX headwinds; and slowing of store-based
retail demand. This has added complexity
to our short- and long-term planning,
particularly as stakeholders have differing
priorities, and therefore the costs and
implications needed careful consideration
by the Board when reviewing the budget
for 2025/26.
Pay is a key priority for colleagues and is
particularly important in the current
environment, as increases to the National
Living Wage lag behind inflation. Inflation
has also driven cost increases in our supply
base. Shareholders may expect these cost
increases to be offset through price action.
However, this conflicts with our strategy
to provide customers with value and quality
and would likely constrain volume growth;
a key pillar of the strategy. Additionally,
customers are impacted by inflation and
wage stagnation, affecting consumer
confidence and discretionary spending.
Concurrent with these wider macroeconomic
influences and cost increases, large-scale
transformation projects, both emerging and
ongoing, are needed to support M&S’
long-term ambitions.
While these investments may impact
short-term returns to shareholders, they
are expected to deliver long-term
futurevalue:
•
Investing in our supply chain is critical
to support growth aspirations and meet
our sustainability and Plan A goals.
InFashion, Home & Beauty, ensuring
efficient storage and automation in
thenetwork is a focus of the ongoing
end-to-end transformation programme.
This will increase our capacity to serve
online orders, improve service and
reduce costs. In Food, modernising
oursupply chain will create efficent
capacity to meet our ambition of
becoming a shopping list retailer.
Investment will ensure we can get
theright products to the right stores
atthe right time for customers.
•
Accelerating our store rotation programme
provides improved experiences for
customers and colleagues. Focus
remains on expediting new sites,
growing our pipeline and executing our
renewal strategy. The programme will
also reduce energy usage, helping to
deliver our long-term ESG commitments.
Returns on new and renewed stores
have been above our hurdle rates
overall, trading ahead of plan for three
consecutive years.
S.172 STATEMENT CONTINUED
Managing cost headwinds and investing for the future
•
Modernising our Digital & Technology
infrastructure is a focus for us. At the
Capital Markets Event in November 2024,
we outlined the need for investment to
upgrade our technology infrastructure
which has increased running costs and
made processes complex and inefficient.
In January 2025 the Board approved an
investment to deliver this overthree
years. In light of the recent cyber incident,
we are making use of thedisruption to
bring forward this investment in
infrastructure and network connectivity,
store and colleague technology, and
supply chainsystems. Our overall aims
remain the same; to improve technology
foundations, remove legacy infrastructure
Key to stakeholder groups:
1
Customers
3
Shareholders
5
Partners
2
Colleagues
4
Suppliers
6
Communities
1 2 3 4 5 6
and applications to increase resilience
and reduce risk, lower technology run
costs and increase investment in growth.
These projects are necessary to build the
M&S we need to be for long-term success
and enhanced shareholder value.
Outcome
The Board therefore carefully balanced these
competing needs in the 2025/26 budget,
ensuring current economic challenges
can be navigated while continuing to build
foundations for sustainable transformation
and long-termgrowth.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 69
S.172 STATEMENT CONTINUED
High-performance culture
We are at the beginning of a new M&S,
embedding a culture of sustained high
performance. This year, the Board
considered how to shape and define what
a high-performance culture means at
M&S, and how to embed this and ensure
clarity for colleagues.
The cultural reset aims to strengthen the
relationship between colleagues and
customers, ensuring customers are central
to everything we do. By being closer to
customers, colleagues are able to listen
first-hand and respond swiftly to their
needs and preferences; ultimately
enhancing shopper satisfaction and
loyalty in the long-term. The reset also
emphasises the importance of staying
connected with suppliers and partners.
Having ears to the ground in all aspects of
our business allows us to deliver value and
success for shareholders.
NED engagement activities
June
Newcastle stores: directors visited the Newcastle, MetroCentre and
Washington Galleries stores for:
•
A shopping ‘exercise’ to review stock availability.
•
Listening group sessions to hear store colleagues’ experiences ofworking for M&S.
•
An informal dinner with 14 local Store Managers tohearfirst hand from the front
line about running our stores.
Supplier dinner: 16 suppliers attended to share experiences of working
withM&S.
Colleague voice: directors visited the Pantheon store with the
NationalBIGChair.
August/September
Supplier meeting: Evelyn Bourke visited a number of supplier farms, including
Hemyock, Swanhams and Irwin Farms.
January
ESG visit: members of the ESG Committee visited our Castle Donington
logistics site to consider packaging and carbon in the Fashion, Home & Beauty
supply chain.
Distribution centre visit: Fiona Dawson, Tamara Ingram and Cheryl Potter
visited the Swindon Distribution Centre todiscuss network strategy.
Birmingham stores: directors visited the Bullring and Sears Solihull stores,
taking part in exercises to experience productivity challenges first hand.
Store Manager dinner: the Board discussed costs and productivity with 12 local
Store Managers.
February
Supplier meeting: Evelyn and Alison Dolan visited Park Cakes, one of our key
dessert suppliers.
Franchise partner visit: Tamara and Sapna Sood visited the new Battersea
Fashion, Home & Beauty store with Al-Futtaim Group.
March
Sourcing and partners: Evelyn and Alison travelled to meet with partners in
SriLanka and Bangalore.
To embed this new high-performance and
customer-centric culture, the Board
listened to feedback through the Business
Involvement Group, the colleague
engagement programme, and surveys.
Our People Director, Sarah Findlater, also
spent three months as manager of the
Brooklands store, sharing observations
with the Board on her return. Feedback
overall highlighted the importance of
supporting store colleagues to spend
more time with customers.
Outcome
As a result, a new Director of Store
Operations role was created to ensure a
direct connection between stores and each
business area, giving store operations a
stronger voice in decision-making.
The Board also supported the launch of a
new communication channel on WorkJam,
and the introduction of weekly emails from
the Director of Store Operations. These
‘Voice of our Stores’ updates communicate
the issues colleagues are experiencing on
the shop floor direct to the support centre
so quick fixes can be identified. The aim
being to make it easier for colleagues to
spend their time serving customers.
While the reset will not be delivered
overnight, the Board believes this will
support our people to deliver our strategy
successfully, and is essential for M&S’
sustained long-term success.
More information on our culture can be
found on pages 32 to 35.
1 2 3 4 5
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202570
BOARD REVIEW
Following last year’s externally facilitated review, undertaken by Global Future Partners,
the Board conducted an internal review of its effectiveness this year, led by the Chairman
and supported by the General Counsel & Company Secretary. The process involved
discussions with directors, allowing them to consider areas where they identified
improvements could be made.
The review covered the following areas:
•
Board: composition, expertise, dynamics, time management, stakeholder focus
andstrategic oversight.
•
Committees: effectiveness of how the Committees operate, their agendas
andcomposition.
•
Chairman: relationships and communication with the Board and ExCo, meeting
management, and shareholder interactions.
•
Individuals: time management, preparedness at meetings, relationships, knowledge,
experience and overall contributions.
Board review cycle
Progress made against 2024/25 actions
Progress made on the actions identified in last year’s review is outlined below.
Action Progress
The Chairman to lead a Board discussion on
evolving meeting rhythms and focus areas for
the next phase of the M&S journey, including the
appropriate weight of operations versus
strategic focus.
Meeting cadence and topic weightings were
reviewed when setting the agenda and timings
for 2025/26. To refocus on trading, the Board’s
January meeting will be a shorter update call
focused on Christmas results, while future
strategy away days have been scheduled to
avoid conflicting with peak trading periods.
Following external meetings, the M&S Board to
conduct discussions to process and integrate
learnings with key ExCo members participating.
Having a regular cadence of external speakers
has continued to be insightful for Board
members, and has shaped discussions
throughout the year.
To simplify and integrate performance reporting
for the Board.
Carried out a review of papers and cascaded to
management improved and simplified ways
ofreporting.
The Chairman to ensure the Nomination
Committee is focused on addressing impending
succession needs.
The Nomination Committee played a pivotal role
addressing succession needs, recommending to
the Board the appointments of Alison Dolan as
CFO, and Fiona Dawson as SID and Remuneration
Committee Chair. More detail on pages 72 and 73.
To preserve and enhance Board performance,
NEDs to create individual development plans,
supplemented with coaching where appropriate.
During the year, directors have strengthened
their relationships with key stakeholders and
gained deeper insights into the core operations
of the business. Highlights of NED engagement
activities can be found on page 70.
Review insights and action plan for 2025/26
The review found that directors continued to be highly engaged and involved with the
business this year. The Board and its Committees worked effectively to provide
oversight and constructive challenge, with a focus on the business’ key strategic,
multi-year transformation programmes.
Based on the review, some of the actions to be implemented next year are:
•
Consider the Board’s composition, shifting focus from short-term succession needs toa
longer-term view, evolving the Board’s expertise for the business’ future strategic priorities.
•
Guide ExCo as it establishes itself with new members, offering constructive challenge
and feedback as necessary to support its development, as well as its delivery of the
strategy and transformation programmes.
•
NEDs to maintain their high levels of engagement, strengthening relationships
withkey stakeholders across the business to stay attuned to their changing needs.
2024
External
performance
review
2025
Internal
performance
review
2026
Internal
performance
review
2027
External
performance
review
Time commitments
The Board acknowledges the importance of
directors having enough time to perform effectively.
After reviewing their external commitments, it
concluded each director has sufficient time for the
Company. Their contributions to Board discussions
reflect the time spent on M&S matters outside of
meetings, and they are often available for
unscheduled activities as needed.
Details of Non-Executive Director (NED)
engagement activities can be found on page 70.
These clearly demonstrate the additional time
directors have dedicated to understanding
stakeholder views.
Board tenure
As part of the review
process, each director’s
tenure and
independence was
considered. No tenure
exceeds the
recommended nine
years, and it was
concluded that each
NED remains
independent.
Details of directors’
tenure can be found on
page 61.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 71
NOMINATION COMMITTEE REPORT
Year in review
Board succession has been a key focus for the Committee this
year, with a number of changes having taken place. Following
an extensive search process, in May 2024 we announced the
appointment of Alison Dolan as Chief Financial Officer,
whojoined the Board in January 2025; more detail below.
Thesuccession plan included Jeremy Townsend remaining in
post until May 2025 to allow for a smooth transition. We are
grateful to Jeremy for his support and dedication; he’s left
the business in strong financial health.
We also announced in May 2024 Andrew Fisher would be
stepping down from the Board in July 2024 after a tenure
ofnearly nine years. Fiona Dawson replaced him as Senior
Independent Director (SID) and Chair of the Remuneration
Committee. More information on page 73.
We are at the beginning of a new M&S, embedding a
high-performance, customer-centric culture. Ensuring we
have the right talent in place is key to accelerating the pace
ofour transformation, and the Committee’s role is therefore
vital to building the M&S we need to be.
The Committee’s role
isvitalto building the
M&S we need to be.
Archie Norman
Chair of the Nomination Committee
On the Committee’s agenda in 2024/25
CFO appointment
The search process to appoint a new CFO initially began in December 2022 following the departure of Eoin Tonge. While this first
resulted in the interim appointment of Jeremy Townsend, a rigorous recruitment process was carried out to appoint a permanent
successor, as detailed below.
Appointment and onboarding process
1
Skills review
Review of the current expertise and
experience of the Board to identify
areas where the Board could benefit
from additional knowledge and input.
Gurnek Bains of Global Future
Partners provided the Committee
with input when shaping the brief,
based on his observations of the
Board during the 2023/24 external
evaluation process.
Given the current phase of M&S’
transformation, the Committee
agreed the ideal candidate would be
a skilled CFO of a UK listed company
with a technology background.
2
Identification of candidates
Engaged executive search firm
Russell Reynolds Associates* (RRA),
providing it with the detailed
candidate brief.
Diverse longlist of candidates
produced and carefully considered
by the Committee, leading to
creation of a shortlist.
* RRA has no connection to the
Company or its directors.
3
Interviews
Members of the Committee met
with shortlisted candidates,
assessing their alignment to the
original brief and to M&S’ culture,
values and behaviours.
This resulted in the identification of
two finalists. Both were assessed by
Global Future Partners to assist the
Committee in reaching a decision,
providing an independent view of
their cultural fit with M&S and
theBoard.
4
Appointment
The Committee agreed Alison
Dolan was the best candidate,
possessing the necessary skills and
experience required for the next
phase of M&S’ transformation.
Alison’s appointment as CFO was
recommended to the Board and
announced in May2024.
5
Induction
Alison joined the Board in January
2025 and has undergone a thorough
induction programme including:
i. Closer to customer days in a
variety of stores across the
country.
ii. Visits to M&S distribution centres,
including Castle Donington,
Bradford and Ollerton.
iii. Spending time in key
international markets with local
teams and partners, including in
India and Ireland.
iv. Visits to key suppliers.
v. Introductory meetings with the
Board, ExCo and other members
of the senior leadership team.
vi. Meetings with key external
stakeholders including our
external audit partner at
Deloitte, brokers, and external
advisers.
vii. Detailed handover process
working alongside Jeremy
Townsend before his departure in
May 2025.
Where to find out more
Membership
Details of Committee members and their
attendance at all meetings can be found on
pages 62 to 63.
Information on the skills and experience of
all Committee members can be found on
pages 61 to 63.
Responsibilities
The role and responsibilities of the
Committee can be found on pages 64 to 65.
The full Terms of Reference for the
Committee can be found at
corporate.marksandspencer.com.
Effectiveness
Details of the Committee’s annual
performance review can be found on
page71.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202572
Succession planning
Board
To help the Committee regularly review the composition,
structure and diversity of the Board, a skills matrix is kept
under regular review (on page 61). Skills are identified and
aligned with the Company’s strategic priorities to ensure
Board members have the necessary expertise to support
the execution of M&S’ long-term strategy. It is also used
when considering future appointments, helping to
highlight areas where the Board could benefit from
additional expertise, as explained in the CFO
appointment process on page 72.
Board tenure and independence is reviewed annually as
part of the Board review process (more detail on page 71)
and is considered by the Committee in succession
planning. As identified in last year’s report, Andrew Fisher
had served on the Board for nearly nine years and
planning was underway to find suitable replacements
forhis roles as SID and Chair of the Remuneration
Committee. Planning began with the appointment
ofFiona Dawson to the Remuneration Committee in
January 2023. Having served on our Remuneration
Committee for over 12 months when Andrew stepped
down in July 2024, and given her remuneration experience
from other non-executive positions, it was agreed she
was the most appropriate person to succeed him as Chair
of the Remuneration Committee. When Andrew retired
from the Board, the Committee also agreed that Fiona’s
thorough understanding of M&S and her position as a
trusted colleague placed her well to support the Chairman
in leading the Board. The Committee therefore
recommended Fiona as the mostsuitable person
tobeappointed as SID.
Executive Committee (ExCo)
ExCo and senior management succession remains
akeyresponsibility of the Committee. Planning was
strengthened during the year to ensure each ExCo role
has a clear succession plan in place. This also extended to
our top 150 senior management roles, where we have set
succession targets to drive accountability within each
business area, supported by regular succession reviews.
As part of a planned succession, in February 2025 we announced a number of leadership changes to deliver the next
phase of our Fashion, Home & Beauty transformation. Among them, John Lyttle, formerly CEO of Boohoo Group,
joined M&S in March 2025 as Managing Director of Fashion, Home & Beauty. John has extensive retail and
transformation experience, spending five years at Boohoo and, prior to this, nine years at Primark as COO. Richard
Price left M&S in April 2025 after a handover period to pursue a portfolio career; he goes with our thanks, leaving the
Fashion, Home & Beauty business on a much stronger footing with improved product.
Diversity, equity and inclusion
The Board’s Diversity and Inclusion Policy, which extends to its Committees, sets out objectives aligned with the
FCAListing Rules, the FTSE Women Leaders Review, and the Parker Review, helping to support the development
ofadiverse pipeline. The Committee is tasked with ensuring these objectives meet regulatory standards and good
practice, as well as monitoring progress in achieving them. As at 29 March 2025, the Board met each of the targets
asset under UKLR 6.6.6R (9).
Board Diversity & Inclusion Board Diversity & Inclusion
Policy objectivesPolicy objectives ImplementationImplementation ProgressProgress
Maintaining a
continuous level of at
least 40% female
directors on the M&S
Group plc Board.
Succession planning sessions assess the Board’s skills and
experience to ensure alignment with our long-term strategy.
Independent executive search firms are engaged to ensure
director appointments consider a diverse pool of candidates.
Ahead of our target at financial year-end and
up to the date of this report, with 60% female
representation.
Appointing a female
director to at least one
of the senior Board
positions (Chair, CEO,
SID, CFO).
Consideration of this topic is part of the Board and ExCo
succession planning process, as well as in the development
of our internal talent pipeline.
The Committee considered the achievement of
this objective when assessing successors for
the SID and CFO, leading to the appointments
of Fiona Dawson and Alison Dolan.
Maintaining at least one
director from an ethnic
minority background on
the Board.
Succession planning sessions assess the Board’s skills and
experience to ensure alignment with our long-term strategy.
Independent executive search firms are engaged to ensure
director appointments consider a diverse pool of candidates.
Target met with one Board member identifying
as being from an ethnic minority background.
Assisting the
development of a
pipeline of high-calibre
candidates by
encouraging a diverse
range of senior
individuals within the
business to take on
additional
responsibilities and
roles to gain valuable
board experience.
The Company has a number of initiatives in place to help
strengthen our diverse pipeline of leadership candidates.
In the year, we expanded our high-potential development
programmes to increase diversity and include more talent
from stores. Over the past year, 320 high-potential colleagues
completed an M&S Future Leaders programme, of which 72%
were female and 30% were from ethnic minorities.
M&S has committed to achieving 50% female
representation amongst senior leaders and 12%
ethnic minority representation amongst senior
managers by 2027 (both as defined in the
People and Culture section on page 35). The
current diversity of these populations is 56%
and 4.9% respectively. We recognise we still
need to make progress and are dedicated to
improving the ethnic diversity of our talent
pipeline.
More information can be found in the People
and Culture section on pages 34 to 35.
Gender identity and ethnicity data required to be disclosed in accordance with UKLR 6.6.6R (10) can be found on page 105.
The Board and ExCo’s gender and ethnicity data can be found in the Chairman’s Governance Overview on page 61.
NOMINATION COMMITTEE REPORT CONTINUED
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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ESG COMMITTEE REPORT
Year in review
The Committee continued to provide strategic oversight of
the Company’s ESG strategy and its delivery, as well as how
the business continues to bring sustainability to the forefront
with customers through Plan A. Inanticipation of upcoming
changes to the ESG regulatory landscape, we focused on
ensuring readiness for new regulations. These included the
Corporate Sustainability Reporting Directive (CSRD), albeit a
possible delay to its introduction was announced towards the
end of the financial year. Efforts centred around enhancing
data collection rigour and increasing visibility and
transparency across our entire supply chain, to improve the
robustness of our reporting.
Despite the increased focus on preparing for regulatory
changes, we have not lost sight of key initiatives to deliver the
ESG strategy. We have ensured these initiatives remain
aligned with the Company’s overarching transformation, so
that ESG contributes to our overall goals. This includes
staying vigilant to changing customer attitudes and
embedding ESG at the core of our store rotation programme
to secure a sustainable future. More information on the
initiatives we implemented during the year can be found on
the following pages.
Environmental
The Committee considered and
challenged management updates on key
initiatives to support the delivery of Plan
A, as well as progress made against
sustainability targets.
Net zero
The Committee reviewed the glidepath
for net zero to ensure alignment with the
three-year plan. It also reviewed quarterly
performance and maintained oversight of
the Plan A Accelerator Fund tracking
carbon reduction initiatives. More information
on the Accelerator Fund can be found on
page 48.
Scopes 1 and 2
Logistics
The Committee spent time reviewing our
supply chain operations, including the
opportunities and challenges to reaching
our net zero targets, as well as use of
plastic from supplier to store. To see the
efforts to reduce plastic use first hand,
Tamara Ingram and Cheryl Potter visited
the Fashion, Home & Beauty distribution
centre in Castle Donington.
On the Committee’s agenda in 2024/25
The timeline below provides an overview of Committee discussions during the year, with
more detailed information summarised over the following pages.
Despite increasing
focus on regulatory
changes, we have not
lost sight of delivering
the ESG strategy.
Tamara Ingram
Chair of the ESG Committee
April 2024
Updates:
•
Ethical and responsible sourcing.
•
Climate disclosure and targets.
May 2024
Approvals:
•
2024 ESG Report.
•
ESG-related content in the 2024
Annual Report, including Task Force on
Climate-related Financial Disclosures.
•
2024 Modern Slavery Statement.
July 2024
Updates:
•
Plan A brand building.
•
Fashion, Home & Beauty circular
business models.
Approval:
•
2024/25 ESG targets.
September 2024
Updates:
•
ESG regulatory landscape.
•
Property: carbon Scope 1 and 2.
•
Review of Q1 target performance.
•
ESG risk review.
January 2025
Updates:
•
ESG brand building.
•
Supply chain, including water, raw
materials and biodiversity.
•
Review of Q2 target performance.
Approval:
•
Updated Committee Terms of
Reference.
March 2025
Updates:
•
Social matters including ethical trade,
people and community.
•
Carbon targets.
Approval:
•
Group Deforestation Commitment.
Where to find out more
Membership
Details of Committee members and their
attendance at all meetings can be found on
pages 62 to 63.
Information on the skills and experience of
all Committee members can be found on
pages 61 to 63.
Responsibilities
The role and responsibilities of the
Committee can be found on pages 64 to 65.
The full Terms of Reference for the
Committee can be found at
corporate.marksandspencer.com.
Effectiveness
Details of the Committee’s annual
performance review can be found on
page71.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202574
ESG COMMITTEE REPORT CONTINUED
They explored how we’re cutting down on plastic packaging
and hangers at different stages of the customer journey
and saw the progress made. They were also updated on
potential future investments in alternative fuel sources
for our transport. More information on our carbon emissions
canbe found in our TCFD report on pages 38 to 50.
Property and Retail
The Committee maintained its oversight of sustainability
measures in the store renewal programme. These
included investments in energy efficiency solutions for
legacy stores, such as trials of long-term alternatives to
natural gas boilers. More information on our store
renewal programme can be found on pages 12, 15 and 69.
Scope 3
Fashion, Home & Beauty
The Committee received regular insight into Fashion,
Home & Beauty’s commitment to circularity, including
its‘Another Life’ clothing reuse and repair scheme in
partnership with SOJO, Oxfam and HANDLE. In November,
this was expanded with the launch of Bloom x HANDLE,
an initiative making wide tooth combs from recycled
product packaging, available to purchase in store. More
information on waste and circularity can be found on
pages 7, 37, 42 and 46.
Food
Sourcing raw materials is a critical area where we can
make an impact on both people and the planet. This year,
we conducted a comprehensive risk assessment of our
top 50 raw materials, shaping our sourcing plan to
prioritise those with the highest risks to drive positive
change in our supply chains. Palm oil, soy, cocoa, tea,
coffee, and timber were all identified as priorities
because of the environmental and social challenges
associated with them. These include deforestation,
land-use change, and worker exploitation. By addressing
these issues, we aim to protect the environment,
empower local communities, and reduce social
inequalities. This is most visible in our tea and coffee
sourcing, which is all Fairtrade-certified, ensuring fair pay
and sustainable practices for farmers and producers. In
2024, we launched the Cup of Ambition™ fund in our UK
cafés, empowering tea and coffee producers to invest in
their communities. More information on our raw material
sourcing can be found on pages 42, 46 to 47.
Social
During the year, the Committee reviewed its Terms of
Reference to ensure its role and responsibilities remain
current and aligned to best practice. Approved in
January 2025, the new terms enhance the Committee’s
focus on social matters.
In March 2025, the Committee was updated by the
leadership team on a number of social topics:
•
Ethical trade: management presented updates on the
Company’s approach. In Fashion, Home & Beauty, this
included increased transparency of Tier 1 suppliers (now
disclosed on the public platform, Open Supply Hub), the
launch of a Tier 2 ethical compliance policy, and
collaboration with top Tier 1 suppliers for monitoring.
Climate resilience, particularly heat stress, emerged as a
new issue and is being carefully monitored. The Food team
has also pioneered an ‘audit plus’ programme at scale
through the worker voice programme, covering the UK
and ROI supply base. This initiative allows M&S to hear
directly from workers, helping to identify cultural and
engagement issues that could indicate or lead to human
rights concerns. More information on ethical trade can be
found in our ESG Report.
•
Our people: the Committee received updates on
several key issues, including: progress in achieving
gender balance in senior roles; a reduction in the
gender pay gap due to increased female leadership;
and the success of our partnership with The King’s
Trust, which provided 600 employment opportunities
this year, enhancing workforce diversity. However, we
acknowledged that further efforts are needed to
increase diverse representation at a leadership level to
meet our ethnicity goals. More information about our
people and culture can be found on pages 32 to 35.
•
Community: colleagues and customers have told us
that supporting young people’s mental health is
important to them. This led to launch of our headline
charity partnership with YoungMinds in 2023/24.
Sincethen, colleagues and customers have taken
partin activities to support the charity, resulting in
over £4.4m being raised, supporting 4.4m people.
Moreinformation about our partnership with
YoungMinds can be found on page 11.
Governance and reporting
responsibilities
Ensuring preparedness for changing ESG regulation was
a focal point of the Committee’s discussions. In readiness,
our external auditor, Deloitte, provided the Committee
with a detailed overview of the upcoming changes,
including from CSRD. Discussion centred on the
significant impact these will have on ESG reporting, and
the risk of increasing compliance activities diverting
resources away from initiatives aimed at delivering our
Plan A strategy. One outcome from the session was the
recommendation that management develop an ESG
reporting database to assist with the verification of all
metrics and claims. This framework is now used for all
ESG-related reporting.
The Committee has developed a closer relationship with the
Audit & Risk Committee due to the increase in overlapping
responsibilities. This was reflected in the annual Terms of
Reference review, which formalised the Committee’s role in
advising the Audit & Risk Committee on all ESG-related
risks and opportunities.
Despite the European Commission’s update to CSRD on
26 February 2025, which is likely to postpone reporting
requirements by two years and make them less rigorous,
the Committee will remain focused on ensuring the
robustness of the Company’s ESG reporting.
Bringing Plan A to life
The Committee regularly reviewed the ESG brand
reputation tracker and management plans for bringing
PlanA to life.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 75
AUDIT & RISK COMMITTEE REPORT
Year in review
The Committee’s core duties remained unchanged and we
followed our usual cadence of activities to ensure the
effectiveness of our financial reporting, risk management and
internal controls framework (an overview is on pages 77 and
78). We continued to act as a crucial point of oversight and
support, challenging senior leaders on how risk assessment
and management activities are embedded in the day-to-day;
to that end, we established an Executive Risk Committee. We
encouraged this new management forum to drive a cultural
focus on risk, particularly in relation to the business’ ongoing
transformation. With a series of significant change programmes
underway and in development, our steer has been to embed
risk and governance at the heart of programmes from the
outset. An example of this, as detailed below, was the
comprehensive risk review of the Digital & Technology
function and the design of the Evolution Programme
resettingM&S’ technology foundations; improving our risk
environment was firmly embedded as an objective in the
programme’s architecture.
Another area of focus this year has been guiding the business’
approach to long-awaited governance changes, particularly
the enhanced reporting requirements brought about by the
UK Corporate Governance Code’s revised Provision 29.
Wemonitored readiness activities, hearing updates on the
effectiveness of existing controls and suggesting areas that
could be improved. More information on page 78.
We also ran a competitive audit tender process which resulted
in the decision to recommend the reappointment of Deloitte.
As well as considering upcoming regulatory changes, we
focused on how technology can be used to provide insights
and support the efficiency of the audit process. More
information on page 82.
We acted as a crucial
point of oversight and
support.
Evelyn Bourke
Chair of the Audit & Risk Committee
On the Committee’s agenda in2024/25
Digital & Technology (D&T)
Under new leadership, the D&T function has a renewed focus on
ensuring the effectiveness of risk management processes and
controls. Rachel Higham shared with the Committee her first
impressions following appointment as Chief Digital and Technology
Officer, and set out a detailed Evolution Programme. A
comprehensive risk maturity assessment has been undertaken
and the Committee received regular updates on progress being
made. This work is also establishing a risk management
environment to support our transformation programme.
Cyber-security
With the ever-increasing sophistication and frequency of cyber-
related events, and M&S’ increased use of new technology and
digital solutions, cyber-security was a key topic on the agenda,
discussed at each of the Committee’s five meetings. Aspart of
the overarching D&T risk maturity review, the Committee
assessed the effectiveness of the Group’s cyber risk
management activities, including via an externally facilitated
‘red team’ exercise. This tested the maturity and robustness
of M&S’ systems and processes and their ability to withstand
business disruption. The processes tested were those in place to
protect customer data, Food logistics via Gist and the systems at
Castle Donington.
In its review, the Committee emphasised theneed for effective
oversight of activities to improve theframework, and monitored
follow up activities throughoutthe year.
Throughout April 2025, members of the Committee have been in
regular formal and informal communication with management
and Deloitte as the cyber incident emerged. With reference to
the 2024/25 financial statements, the Committee has
understood the steps taken by management to ensure the
integrity and completeness of the 2024/25 financial records, to
be satisfied that the financial statements give a true and fair view
of the financial performance and position of the Group. This has
included specific focus on the effectiveness of the internal
control environment during the period and additional controls
put in place over the preparation of the financial statements
post incident.
Joint ventures (JV)
Alongside monitoring the progress of the Ocado Retail Limited
(ORL) consolidation workstreams (more on page 80), the
Committee focused on strengthening the governance, risk and
control framework of M&S’ India JV. Management identified a
number of immediate and medium-term actions aimed at aligning
the business with M&S’ expectations and standards. Members of
the Board, ExCo and senior leadership team, including the MD of
International, CFO, and Head of Internal Audit & Risk, have been in
country to conduct reviews and provide on-the-ground advice
and support to local teams. At each meeting, the Committee
received updates on different aspects of the India reset, providing
support and independent challenge.
Where to find out more
Membership
Details of Committee members and their
attendance at all meetings can be found on
pages 62 to 63. Where required, the
Committee meets without management
present at the start and end of meetings.
Information on the skills and experience of
all Committee members can be found on
pages 61 to 63.
Responsibilities
The role and responsibilities of the
Committee can be found on pages 64 to 65.
The full Terms of Reference for the
Committee can be found at
corporate.marksandspencer.com.
Effectiveness
Details of the Committee’s annual
performance review can be found on
page71.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202576
2024
May
•
Year-end approvals including:
–
2024 Annual Report and Accounts and Full Year
Results announcement.
–
Long-term viability assessment process.
–
2024 ESG Report and regulatory ESG content
disclosed within the Annual Report.
–
GSCOP Compliance Report.
–
Modern Slavery Statement.
•
Discussion: initial view of proposed process changes
in response to the new UK Corporate Governance
Code (see more on page 78) and formation of an
Executive Risk Committee (ERC).
•
Discussion: progress update on the external audit
tender process (see more on page 82).
•
Reviewed the Principal Risks and Uncertainties (PRU)
and Group risk appetite.
•
Reviewed Deloitte’s External Auditor Full Year report.
•
Discussion: Internal Audit & Risk (IA&R) report
including consideration of the improving risk and
controls framework maturity and areas to monitor
such as technology (see more on page 76).
•
Considered the results of the external auditor
effectiveness review.
•
Executive risk updates:
–
Retail: island of Ireland risks and opportunities with
a particular focus on colleague relations, supply
chain transformation, and the regulatory
environment.
–
Operations: financial and customer impact of the
issues experienced by Castle Donington following
asoftware update to the warehouse
managementsystem.
–
Cyber-security: results from the cyber-security
‘redteam’ exercise.
September
•
Agreed M&S’ approach to UK Corporate Governance
Code changes and considered the business’
definition of ‘materiality’ for controls.
•
Governance approvals including:
–
Group Fraud Policy.
–
ERC Terms of Reference.
–
Revised Group Risk Management Policy.
•
Considered assurance for the sustainability KPIs
linked to Marks and Spencer plc’s revolving credit facility.
•
IA&R updates including:
–
Results from suppliers’ food safety and integrity
controls testing.
–
Consideration of the upcoming review of the Gifts
& Hospitality Policy and fraud risk
managementactivities.
•
Discussion: enhanced tax controls particularly
surrounding deferred tax on land and buildings.
•
Audit tender process: decision following audit firm
presentations to the selection panel.
•
Executive risk updates:
–
Fashion, Home & Beauty sourcing: assessment of
M&S’ exposure to recent disruption in Bangladesh,
the risks and impact on the business and
mitigationplans.
–
D&T: mid-year risk update and first impressions
from the new Chief Digital and Technology Officer
(more on page 76).
–
International: deep dive on the India JV’s risk
management, controls and governance reset.
–
JV partners: risk and control update from ORL’s
CFO and General Counsel including preparations
for the consolidation switch, business continuity
and cyber-security.
October
•
Approved the Half Year Results announcement.
•
IA&R report including the half year review of the risk
and controls framework.
•
Discussion: half year PRU assessment including a
look ahead to year end and any changes to the
business’ risk profile.
•
Governance approvals:
–
Bribery risk assessment.
–
Committee Terms of Reference updated to reflect
UK Corporate Governance Code changes and the
FRC’s Minimum Standard for Audit Committees.
•
Reviewed Deloitte’s External Auditor reports:
–
Half Year report.
–
Full Year planning report.
•
Executive risk updates:
–
Food: review of animal welfare and accreditation,
and supplier base and network capacity (more on
page 15).
–
Food logistics: Gist risk assessment including site
capacity, health, safety and wellbeing, and a review
of the critical cyber-security remediation activities
undertaken following the red team exercise.
–
Data protection: M&S’ data protection framework
maturity level, protection of customer data given
the growing threat of cyber-attacks and the role of
culture in data management and compliance.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 77
AUDIT & RISK COMMITTEE REPORT CONTINUED
2025
January
•
Reviewed and approved:
–
Group Tax Strategy.
–
Assurance approach for 2024/25 ESG data.
•
IA&R delivery update since September on ongoing
audits including:
–
Progress made in improving Gist’s driver and
vehicle management compliance and internal
assurance process.
–
Actions agreed to enhance leadership focus on
product safety metrics.
–
Results of the externally facilitated Group Treasury
function review.
•
Reviewed Deloitte’s External Auditor interim report.
•
Executive risk updates:
–
Fashion, Home & Beauty: consideration of the
Bangladesh sourcing de-risking strategy.
–
ESG: approach to assurance and reporting against
the Corporate Sustainability Reporting Directive
and Task Force on Climate-related Financial
Disclosures.
–
Financial Services: end-to-end business review of
risks following restructuring of the business unit
and HSBC agreement.
–
Sparks programme: effect of the loyalty
transformation on the business’ risk profile,
particularly fraud and cyber risks. Discussions on
the need for controls and systems to be
appropriately robust.
–
People: initial steps taken to assess and manage
changes brought by Government announcements
and emerging employee relations legislation.
March
•
Reviewed the IA&R report which included:
–
Approval of the IA&R 2025/26 draft plan.
–
Refreshed Group risk appetite statements.
–
Year-end consideration of PRUs for the
AnnualReport.
•
Discussion: Ocado Retail consolidation readiness
workstreams; valuation of investment triggered by
the accounting standards.
•
First look at the Annual Report proposed content
andschedule.
•
Approach to assessing the effectiveness of the
External Auditor.
•
Reviewed the performance of Group Treasury across
the year.
•
Executive risk updates:
–
Fashion, Home & Beauty: review of the revised risk
register covering areas of movement such as cost
headwinds, including FX and inflation, freight
volatility and geopolitical impacts.
–
D&T: year-end risk update and pace of execution of
the function’s Evolution Programme workstreams.
–
Cyber-security: progress update on work done to
address findings from the ‘red team’ exercise.
Provision 29 readiness
activities
A recurring item for the Committee has been the
business’ readiness activities relating to changes
brought by the new UK Corporate Governance
Code (the Code), specifically the approach and
roadmap to achieve compliance with the new
Provision 29. Initial phases included taking stock
ofthe current risk and controls framework and
finalising the Group’s definition of ‘materiality’.
Management provided the Committee with
activity updates throughout the year:
1. Steering group set up: members of the Group
Finance, Finance Change & Control, Internal
Audit & Risk and Digital & Technology teams
meet monthly to drive M&S’ response and
readiness activities with regular progress
updates provided to the Committee.
2. Gap analysis: review of the business’ current
risk and control frameworks to determine
where these can be leveraged or where
enhancements are needed to meet the
requirements of the Code.
3. Risk management maturity workstream: to
develop the maturity of risk management
processes in targeted areas, including
non-financial reporting, technology, joint
ventures and continuing to embed a fraud
riskmanagement framework.
4. Establishment of the Executive Risk
Committee: a sub-committee of ExCo to drive
focus on risk management and lead the
business-wide approach to compliance with
corporate governance changes.
5. Definition of ‘materiality’ for controls:
proposed approach agreed by the Committee,
to be kept under review.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202578
AUDIT & RISK COMMITTEE REPORT CONTINUED
Significant issues
The Committee has assessed whether suitable
accounting policies have been adopted this year
andwhether management has made appropriate
judgements and estimates.
Throughout the year, the Finance team has worked to
ensure the business is transparent and provides the
required level of disclosure regarding significant issues
considered by the Committee in relation to the financial
statements, as well as how these issues were addressed.
This section outlines the main areas of judgement
considered by the Committee to ensure that appropriate
rigour has been applied. All accounting policies can be
found in note 1 to the financial statements. Where further
information is provided in the notes to the financial
statements, we have included the note reference.
Each of the areas of judgement has been identified as
anarea of focus and therefore the Committee has also
received detailed reporting on these matters from Deloitte.
Presentation of the financial statements
The Committee gave consideration to the presentation of
the financial statements and, in particular, the use of
alternative performance measures and the presentation
of adjusting items in accordance with the Group accounting
policy. This policy states that adjustments are only made
to reported profit before tax where income and charges
are significant in value and/or nature. The Committee
received detailed reports from management outlining
the judgements applied in relation to the disclosure of
adjusting items. In the current year, management has
included in this category: the implementation and
execution of strategic programmes; net charges
associated with the acquisition of Gist; impairment
reversals and write-offs of the carrying value of stores
and other property charges; charges relating to the M&S
Bank transformation and insurance mis-selling provisions;
charges relating to the ORL – UK network capacity review;
Impairment of investment in Ocado Retail Limited and
legal settlement and pension net finance income.
See note 5 on page 141.
Store estate programme (including asset
write-offs, onerous lease charges and
useful economic lives)
The Committee has considered the assessments made in
relation to the accounting associated with the Group’s
store estate strategy. The Committee received detailed
reports from management outlining the accounting
treatment of the relevant charges and reversals, including
impairment, accelerated depreciation, dilapidations,
redundancy and onerous lease costs (including void
periods). The Committee has reviewed the basis for the
key assumptions used in the estimation of charges/
reversals (most notably in relation to the costs associated
with property exit/sublet costs, the sale proceeds
expected to be recovered on exit, where relevant, and the
cash flows to be generated by each cash-generating unit
in the period to closure). TheCommittee has challenged
management and is satisfied that the assumptions made
are appropriate. TheCommittee is also satisfied that
appropriate costs and associated provisions have been
recognised in the current financial year.
See notes 1, 5, 15 and 22 on pages 128, 141, 157 and 174 respectively.
Impairment of tangible assets
The Committee has considered the assessments made in
relation to the impairment and impairment reversals of
tangible fixed assets, including land and buildings, and
store assets. The Committee received detailed reports
from management outlining the treatment of impairments
and reversals, valuation methodology, the basis for key
assumptions (e.g. discount rate and long-term growth
rate) and the key drivers of the cash flow forecasts. The
Committee has challenged management and is satisfied
that these are appropriate. The Committee has also
understood the sensitivity analysis used by management
in its review of impairments and reversals, including
consideration of the specific sensitivity disclosures in the
relevant notes. In addition, the business plans detailing
management’s expectations of future performance of the
business are Board approved. The Committee is satisfied
that appropriate impairments and reversals of tangible
assets have been recognised.
See notes 1, 5 and 15 on pages 128, 141 and 157-159 respectively.
Going concern and viability statement
The Committee has reviewed the Group’s assessment of
viability over a period greater than 12 months. In assessing
viability, the Committee has considered the Group’s position
presented in the approved budget and three-year plan.
Inthe context of the current challenging environment as
a result of the ongoing cost-of-living crisis and continued
inflationary pressures on the business, a severe but
plausible downside scenario was applied to the plan.
Thisincluded assumptions such as a sustained economic
recession, increased costs and an inability for the Group
toexecute the transformation plan. The Committee has
concluded that these assumptions are appropriate.
The Committee has also reviewed the Group’s reverse
stress test that was applied to the model. The Committee
has reviewed this with management and is satisfied that
this is appropriate in supporting the Group as a
GoingConcern.
In addition, the Committee received regular updates
onthe steps taken by management regarding liquidity,
including the successful extension of its revolving credit
facility, which is now set to run until June 2027.
The Committee is satisfied that these measures have
reduced liquidity risk.
See note 1 on page 128.
Retirement benefits
Following the decrease from a pension surplus to deficit
during theyear, the Committee has reviewed the
actuarial assumptions such as discount rate, inflation
rate, expected return of scheme assets and mortality
which determine the pension cost and the UK defined
benefit scheme valuation and has concluded that they
are appropriate. The assumptions have been disclosed
intheFinancial Statements.
See note 11 on page 147.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 79
AUDIT & RISK COMMITTEE REPORT CONTINUED
Significant issues continued
Valuation of Marks and Spencer Group
plc company onlyinvestment
Marks and Spencer Group plc holds investments in Group
companies which are reviewed annually for impairment.
Management has prepared an impairment review based
on estimated value in use of the Group. A full reversal
ofthe impairment charges recorded in prior years
haspreviously been made (see note C6 on page 187).
TheCommittee has reviewed management papers
outlining the key assumptions used in calculating the
valuein use and is satisfied that these are appropriate.
Valuation of ORL investment
As at March 2024/25 the Group’s investment in ORL was
accounted for as an associate (see note 29 on page 180).
Ahead of consolidation and in accordance with the
relevant accounting standards, the Group performed a
valuation exercise of ORL, which triggered a full impairment
test of the Group’s existing investment in ORL. As a result
of this exercise a significant impairment of the investment
was recorded – see Note 5 and29 on pages 141 and 180
respectively). The Committee has reviewed management
papers outlining the key assumptions used in management’s
valuation and is satisfied that these are appropriate.
ORL consolidation – acquisition accounting
and valuation of assets and liabilities
In April 2025 after the year end, as expected, following a
change in the rights held by the shareholders, control of ORL
passed on 6 April 2025 when Ocado Group relinquished certain
rights granted under the terms of the original transaction. As a
result of this change, the Group’s investment in ORL, as well as
the results of ORL will be accounted for as a subsidiary and
consolidated from April 2025. The change in control has been
accounted for under IFRS 3 as a Business combination with a
provisional balance sheet presented in Note 30 to the financial
statements and recorded as a post balance sheet event. The
Committee has considered the judgements and assessments
made in completing the acquisition accounting. This has
included understanding the assumptions used in fair valuing
the assets and liabilities acquired, as well as those included in
the calculation of settlement of the Group’s pre-existing
relationship with ORL. The Committee is comfortable with the
accounting for the transaction and judgements applied
.
Fair, balanced and understandable assessment
The Committee carried out a thorough assessment toadvise the Board on whether it considers the 2025
Annual Report to be fair, balanced and understandable. The Committee considered how the report had been
prepared, reflecting on the criteria recommended by the Financial Reporting Council.
A working group was
formed, comprising key
content owners
including: Corporate
Communications,
Company Secretariat,
Group Finance, ESG,
Executive Reward,
Internal Audit & Risk,
and Investor Relations.
The Chairman, CEO and
CFO provided input and
agreed on key elements
to be included, setting
the tone and balance of
the report.
Content owners shared
drafts for review by the
Chairman, CEO, CFO,
Committee Chairs and
General Counsel &
Company Secretary, and
incorporated any
comments.
The working group was
specifically challenged
to ensure the writing
style was consistent,
concise, avoiding
boilerplate language,
and presenting required
disclosures in a clear,
easily understandable
manner for the reader.
Sections were shared
between content owners
to ensure consistent
messaging across the
report.
Members of the
Disclosure & Oversight
Committee, with input
from Group Finance and
content owners, read the
Strategic and Directors’
Reports considering
whether the narrative
was reflective of the
information being
presented in the
financial statements.
The External Auditor
reviewed the report as a
whole at various stages
of the drafting process,
with feedback and
recommendations
incorporated.
Content owners
completed a final round
of reviews of all sections,
considering the overall
content and narrative of
the report.
The Committee reviewed
a full draft of the report,
identifying areas that
could be further
simplified. The draft was
then amended to
incorporate feedback
ahead of final review and
approval.
Following its review, the Committee recommended the 2025 Annual Report to the Board, advising that it
considered the report to be fair, balanced and understandable, providing shareholders with the necessary
information to assess the Group’s position, performance, business model and strategy.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202580
AUDIT & RISK COMMITTEE REPORT CONTINUED
AUDIT & RISK COMMITTEE REPORT CONTINUED
Internal control environment
The Committee has delegated responsibility from the
Board for reviewing the effectiveness of the Group’s
systems of internal control. This includes financial and
non-financial reporting, operational and compliance
controls and risk management systems.
Risk management
The Committee’s accountability for overseeing the
effectiveness of our risk management process includes
determining the Group’s risk appetite (for Board approval)
and monitoring how the business actively manages risks and
mitigations in accordance with it. An overview of the risk
management process can be found on pages 52 to 53.
Framework of internal controls
Alongside our risk management processes, key
components of the Group’s internal controls
environment include:
•
Clearly defined lines of accountability via a Group
delegation of authority and corresponding delegations
to underlying business areas.
•
The Code of Conduct and suite of policies, setting the
floor of minimum commitments for our business
conduct. These commitments are linked to the Group’s
principal risks and uncertainties.
•
Procedures, operating standards and colleague
training, to support the management of key risks and
establishing ways of working within the Board’s
approved risk appetite. These cover areas ranging from
financial reporting to information security and trading
safely in stores.
Relevant business areas and functions own these
underlying components of our internal controls
environment, and are responsible for ensuring control
processes and activities are maintained and operate
effectively. Functional assurance activity also takes place
across the business to target key risk areas. This work is
delivered by business experts or specialist functional
teams, including Financial Controls, Cyber-Security and
Group Asset Protection teams. Where relevant, these
activities are overseen and challenged by our senior
management forums, including Business Boards, the
Executive Risk Committee and the Data Committee.
At each meeting, the Committee is updated by business
leadership on its risk management, internal control and
assurance activities. The updates received this year are
detailed on pages 77 and 78.
Internal Audit & Risk (IA&R) function
Our IA&R function provides additional oversight and
assurance to the Committee in discharging its
responsibilities, by supporting the business in improving
the overall control environment and identifying risks
requiring mitigation. The Head of IA&R has direct access
to the Committee and the IA&R function has unrestricted
access to the Group’s records, physical properties and
people required to carry out any engagement. More
information about the IA&R function can be found in its
Functional Charter (annually reviewed and approved by
the Committee) at corporate.marksandspencer.com.
The Committee approves an Internal Audit Plan annually.
The plan is structured to align with the Group’s strategic
priorities and key risks and is developed by the IA&R
function with input from management. The plan is
reviewed periodically throughout the year to confirm it
remains relevant for new and emerging circumstances,
both internal and external. The findings and actions from
IA&R reviews are agreed with the relevant business area,
communicated to the Committee and tracked through to
completion. Internal audits undertaken during the year
are detailed on pages 77 and 78.
The Committee considered the IA&R function’s
effectiveness in May 2025, agreeing its leadership,
structure and available resources are appropriate and
remain effective.
Effectiveness
The Committee considered whether the Group’s
framework of internal controls operated effectively
throughout the financial year 2024/25. Instances where
the effectiveness of internal controls were deemed to be
insufficient were discussed during the year, either by the
Committee or the Board, and the resulting improvement
plans were monitored. The Committee also considered
the controls findings raised in the Independent Auditor’s
Report on pages 110 to 121.
In April 2025, the Board was made aware of a cyber incident
impacting the business and the steps taken by management
to protect our systems, our customers and our data.
Members of the Committee have been in regular formal
and informal communication with management and
Deloitte since the incident.
With specific reference to the 2024/25 financial statements,
the Committee has considered the impact of the incident
on its review of the effectiveness of the Group’s systems
of internal control during the year. With the incident
occurring after the balance sheet date and confirmed as
a non-adjusting post balance sheet event (see Note 32
page 182), nothing has come to the Committee’s attention
following discussions with management and the Company’s
advisers to give rise to any concerns over the effectiveness
of the internal control environment during the 2024/25
financial year. We will report on the control environment
and incident response in next year’s Annual Report.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 81
External Auditor
Audit firm Deloitte LLP
Date
appointed
2014 (recommended for
reappointment at the 2025 AGM)
Lead audit
partner
Jane Whitlock (in post since the
start of the 2024/25 audit)
Non-audit
fee ratio
0.175:1 (for the year ended
29 March 2025)
Audit tender process
As noted in last year’s Annual Report, the Group
was required to conduct an external auditor tender
for the financial year ending 31 March 2027. The
Committee ran a competitive process during the
year in accordance with relevant regulatory and
governance requirements, including the Financial
Reporting Council’s Minimum Standard for
AuditCommittees.
2024
January – May
The Committee approved the timetable
and informally approached and met
with prospective audit firms, including
the ‘Big Four’ and two ‘challenger’ firms.
Two firms, including the existing auditor,
Deloitte, responded to our initial
informal approaches, confirming their
intention to participate.
A Selection Panel was established
comprising voting and non-voting
members:
•
Committee members (voting): Evelyn
Bourke, Ronan Dunne and Justin King.
•
Senior finance leadership (non-voting):
CFO, Director of Group Finance,
Group Financial Controller and Head
of Internal Audit & Risk.
September
Final proposals were presented to the Selection Panel. Following
deliberation, the Committee concluded it would recommend the
reappointment of Deloitte as statutory auditor. In reaching this
decision, the Selection Panel had considered Deloitte’s:
•
Engagement with the RFP and audit approach tailored to M&S.
•
Market leading and evolving technology proposition, including
investment in AI to drive efficiencies and provide management with
real-time insights.
•
Introductions to the proposed new lead partner and refreshed team,
bringing newness to the audit process while maintaining continuity
with their knowledge of the business, including the issues and
challenges facing us now and into the future.
June
The Request for Proposal (RFP) was issued to participating firms and
they were given access to a data room. ‘Introduction to M&S Finance’
sessions were held between senior management and audit partners.
The Committee agreed the evaluation criteria and scoring approach.
Firms were to be assessed on:
•
Team.
•
Audit approach.
•
Transition/implementation.
•
Technology.
•
Regulatory change.
•
Approach to RFP.
October
The Board approved the reappointment
of Deloitte as statutory auditor, subject
to shareholder approval at the 2025 AGM.
July – August
Management meetings were conducted
with the two participating firms, with
members of the Finance, Internal Audit
& Risk, ESG and Systems teams in
attendance, including the CFO, Director
of Group Finance and Group Financial
Controller.
Meetings were also held with both audit
firms and the Committee Chair and CEO.
Both firms demonstrated their audit
technology capabilities and how these
could support the audit process.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 202582
AUDIT & RISK COMMITTEE REPORT CONTINUED
Effectiveness
The Committee monitors the effectiveness of the
external auditor continuously throughout the year.
Committee members have the opportunity after each
meeting to meet with the lead audit partner without
management present. This provides opportunities for
open conversations and allows the Committee to assess
whether the external auditor has appropriately challenged
management’s analysis. The external auditor provided
the Committee with a planning report ahead of the
2024/25 audit, giving Committee members the
opportunity to comment and input.
As well as this regular monitoring, the Committee annually
assesses the quality of the external audit. A targeted
group of individuals, each of whom has regular interactions
with the external auditor, were asked to complete a
tailored questionnaire. The Committee was provided with
a summary of the responses received to assist with its
own considerations.
As reported in the previous year, the audit partner
transitioned from Richard Muschamp to Jane Whitlock.
Management agreed that the audit partner and team
have a good understanding of our business, our sector,
and the risk environment in which we operate.
Management views their engagement as productive and
positive overall, noting that early engagement on key
accounting judgements continues to be appreciated.
Thishas been particularly valuable in relation to the
consolidation of Ocado Retail Limited and the asset
valuation assessment triggered by the consolidation; the
consideration of the accounting treatment for the
Scottish Limited Partnership’s restructure; and the
appropriate treatment for the store estate programme.
Feedback centred around management’s desire for
earlier engagement with senior audit team members, to
clarify the scope of review requests and resolve queries
more efficiently.
Non-audit fees
To safeguard the independence and objectivity of the
external auditor, the Committee has an Auditor Engagement
Policy, reviewed annually and available at
corporate.marksandspencer.com.
The Committee is satisfied the Company was compliant
during the year with both the UK Corporate Governance
Code and the Financial Reporting Council’s Ethical and
Auditing Standards in respect of the scope and maximum
permitted level of fees incurred for non-audit services
provided by Deloitte. Where non-audit work is performed
by Deloitte, both the Company and Deloitte ensure
adherence to robust processes to prevent the auditor’s
objectivity and independence from being compromised.
All non-audit work performed by Deloitte with fees in
excess of £50,000 was put to the Committee for prior
consideration and approval. For non-audit work, where
fees were below £50,000, approval was obtained from the
CFO and the Committee notified of all work falling within
this threshold. A full breakdown of the total fees paid,
and details on the non-audit services provided by
Deloitte, can be found in note 4 to the financial
statements on page 140.
The non-audit fees to audit fees ratio for the financial
yearended 29 March 2025 was 0.175:1, compared with the
previous year’s ratio of 0.13:1. The total non-audit fees paid
to Deloitte for the year were £0.5m. The majority of these
fees relate to assurance services provided during the
year. No additional recurring or one-off non-audit
services were provided during the year.
In addition, the Committee reviewed and approved the
audit fee for the year, making sure any increase was
understood and reasonable.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Marks and Spencer Group plc Annual Report and Financial Statements 2025 83
AUDIT & RISK COMMITTEE REPORT CONTINUED
REMUNERATION COMMITTEE REPORT
Year in review
M&S’ strategy of reshaping for growth is starting to have
impact. This year we have achieved strong financial results
and improved trading performance, while continuing to
deliver returns to shareholders through the re-introduction
of dividends over the last 18 months.
The Remuneration Committee is focused on making sure our
Remuneration Policy and practices support the delivery of
M&S’ strategy as well as driving a high-performance culture.
Our reward principles are to invest in lower-paid colleagues
first (as demonstrated by our investment in UK retail
colleague pay), link pay to performance, and differentiate
awards based on individual contribution. Overall, we ensure
reward packages are competitive enough to attract and retain
colleagues throughout the organisation.
In light of our continuing growth, at the start of the year, the
Committee followed a rigorous process to ensure
performance targets set for 2024/25 were appropriately
stretching, considering the forecast for the year, and to
ensure alignment with shareholders’ interests.
As outlined on pages 22 to 31, we have delivered Group profit
before tax and adjusting items of £875.5m, despite the
challenging external environment and costand economic
headwinds. Strong volume and value performance has led to
growth in market share in both Food and Fashion, Home &
Beauty. Aligned with this performance are the incentive
outcomes for the year. The Committee carefully assessed the
outcomes to make sure they reflected the underlying
performance of the Company, while taking account of the
external environment, stakeholder views and wider workforce
pay. It also considered the recent cyber incident and concluded
no adjustments were needed to the 2024/25 incentive outcomes
but recognised it would need to re-visit the matter in the context
of the 2025/26 remuneration outcomes.
On the Committee’s agenda
in2024/25
The Committee’s agenda followed its usual cadence of activities
this year, with time divided between the following areas:
Pay arrangements
Annual Bonus Scheme
Long-term incentives
Governance and external market
Our Remuneration Policy
supports our high-performance
culture; our reward outcomes
reflect ourstrong growth and
valuecreation.
Fiona Dawson
Chair of the Remuneration Committee
35% 35%April 13%
41% 18%18%May 23%
29% 18%29%January 24%
8% 8%17%October 67%
17%
Where to find out more
Membership
Details of Committee members and their
attendance at all meetings can be found on
pages 62 to 63.
Information on the skills and experience of
all Committee members can be found on
pages 61 to 63 .
Responsibilities
The role and responsibilities of the
Committee can be found on pages 64 to 65.
The Committee’s full Terms of Reference
and compliance with the Code can be found
at corporate.marksandspencer.com.
Effectiveness
Details of the Committee’s annual
performance review can be found on
page71.
Key decisions in the year
During the year, the Committee approved executive
remuneration decisions and noted changes to pay
andbenefits across the business. Remuneration
highlightsincluded:
•
£95m investment in pay for our UK retail colleagues.
Customer Assistants’ pay increased by 5% to £12.60,
and £13.85 in London, in line with the Real Living Wage.
•
Over 3,400 colleagues benefited from our strong share
price performance over the last three years by being
members of our 2021 ShareSave scheme, which
matured in February 2025. On average colleagues
received a gain of £2,216.
•
Executive pay decisions were made in the context of
the broader workforce pay. The CEO pay increase of 2%
is below the 5% awarded to Customer Assistants and
the salaried pay review budget of 3%.
•
The strong profit performance over the last year and
the delivery of individual objectives resulted in a
2024/25 Annual Bonus Scheme (ABS) outturn of 97% of
maximum for the CEO. The CFO participated in the
profit element only, resulting in an outcome of 70% of
maximum (pro-rated for her period of employment).
Marks and Spencer Group plc Annual Report and Financial Statements 202584
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION COMMITTEE REPORT CONTINUED
•
The 2022 Performance Share Plan (PSP) vested at 90% of maximum for the CEO, reflecting
improved performance over the last three years on a number of key financial and
strategic measures. The Committee assessed the relevant performance criteria and
agreed to scale back the vesting of the store staff to cost ratio measure (see page 95).
After this adjustment, the Committee determined the overall outcome reflected the
underlying performance of the Company.
•
The current shareholder-approved Recruitment Policy was applied when setting the
remuneration package of Alison Dolan on appointment as CFO.
•
Continued discipline when applying the remuneration framework to senior leadership
changes, while balancing the need to attract the talent required to continue
reshaping M&S for growth.
Pay arrangements
When determining the appropriateness of the senior remuneration framework, and in
particular salary increases, the Committee considered wider workforce pay and the
broader external context. During the year, the Committee discussed and approved
(where relevant):
•
The hourly rate of Customer Assistants, given the increase in the National Living Wage
and Real Living Wage and the additional cost of employment taxes. The Committee
was very supportive of management’s continued approach of investing in our lower-
paid retail colleagues, who are integral to the Company’s success by providing a great
experience for our customers.
•
The overall spend on the pay review and the allocation approach for salaried and
management colleagues. In particular, differentiated pay increases on performance
ratings for those colleagues not in the Annual Bonus Scheme to support our high-
performance culture.
•
An increase of 2% in the CEO’s pay, effective from 1 July 2025. The Committee
determined an increase was appropriate at a level lower than pay increases across the
business considering the CEO’s overall remuneration. The increase for Customer
Assistants was 5%, and the salaried pay review budget was 3%.
•
The remuneration package, and buyout arrangements, for the recruitment of Alison Dolan
as CFO was within the shareholder-approved Recruitment Policy. See page 100 for
more details.
•
The talent and succession pipeline along with remuneration packages for other senior
leadership changes.
Annual Bonus Scheme (ABS)
The Committee carefully considers the targets that are set for the ABS to ensure they
are stretching, both for the financial element and for individual objectives. It also
reviews performance outcomes, taking into account the broader context, stakeholder
views and to ensure the underlying performance of the business is reflected. Each year
the Committee considers if any adjustments are required or discretion needs to be applied.
2024/25 ABS outcome
•
The Company delivered strong Group profit before tax and adjusting items (adjusted
PBT) of £875.5m. As a result, the profit target, which makes up 70% of the bonus award
for Executive Directors, was met in full.
•
The other 30% of the award was based on individual objectives, linked to the delivery
of M&S’ transformation. The Committee thoroughly assessed the extent to which the
individual objectives were achieved. It determined an outcome of 27% out of 30% for
the CEO, resulting in an overall bonus outcome of 97% of maximum. The Committee
determined Alison would only receive the part of her bonus relating to the financial
performance of the business as she only worked for three months of the financial
year, resulting in an overall bonus outcome of 70% of maximum (then pro-rated for
her period of employment).
•
In the context of strong business performance and wider stakeholder experience,
theCommittee was satisfied that outturns were appropriate, and no application
ofdiscretion was required. See pages 92 to 93 for more details.
•
In addition, the Committee reviewed the total bonus expenditure and was updated on
the performance management process across the business to ensure individuals were
appropriately rewarded.
2025/26 ABS design
The Committee reviewed the scheme design, operation and targets for the 2025/26
ABS. The Committee agreed performance should continue to be measured against
adjusted PBT (70%) and individual objectives (30%), believing this remains appropriate
when considering the continuing drive to reshape M&S for growth. It also agreed that
the maximum opportunity under the scheme should remain at 200% of base salary.
More details can be found on pages 93 to 94.
Long-term incentives
The Committee assessed the achievement of objectives and corresponding vesting level
of the 2022 PSP awards, alongside approving the grant of the 2025 PSP awards to ensure
appropriate alignment between driving exceptional performance and retaining talent.
2022 PSP outcome
•
The Committee reviewed performance against the 2022 PSP metrics, reflecting the
Company’s adjusted earnings per share (EPS), adjusted return on capital employed
(ROCE), the Company’s relative total shareholder return (TSR) performance and the
delivery of the strategic objectives. It determined a vesting outcome of 90% of
maximum. The Committee considered the appropriateness of applying discretion to
the vesting outcomes. The store staff cost to sales ratio target is underpinned by a
requirement that there is no significant increase in central headcount over the period.
The Committee considered the impact of additional central costs and, for the third
year, it determined the store staff cost to sales ratio metric should be reduced by 50%
and this is reflected in the vesting outcome above.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 85
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION COMMITTEE REPORT CONTINUED
On the Committee’s agenda in 2024/25
continued
Long-term incentives continued
2025 PSP design
•
The Committee reviewed the scheme design, performance metrics and award levels
for the 2025 PSP. The Committee agreed the 2025 PSP should retain the same
financial measures: 30% adjusted EPS, 30% adjusted ROCE, 20% relative TSR and the
remaining 20% will continue to be subject to a basket of three strategic measures.
•
The Committee intends to grant 2025 PSP awards of 250% of salary to the CEO and
CFO in July 2025. Given the cyber incident, it is reviewing the performance metrics
and targets for the 2025 PSP and these will be disclosed before the end of the year.
See page 95 for more details.
•
New share plan rules will be put to shareholders for approval at the 2025 AGM. The
only material change is the removal of the 5% in 10-year dilution limit in line with the
updated guidance from the Investment Association.
Governance and external market
As well as the annual approval of the Directors’ Remuneration Report, and review of the
Committee’s performance and Terms of Reference, the Committee also considered
various internal and external factors impacting colleagues and pay, including:
•
Pay and benefits across the Group, including noting the pay review for hourly paid
Customer Assistants. The Committee also considered colleague views. BIG plays a
critical role in this and collects feedback and views on pay packages, bonus
allocations and ShareSave. The BIG Chair attends a Remuneration Committee
meeting annually. Further details are on page 33.
•
External market practice. The Committee is supported by its remuneration adviser, PwC.
•
Regulatory updates and evolving investor guidance and expectations, including the
Code and guidelines published by investor bodies.
•
The Committee actively engages with shareholders and considers any feedback on
remuneration matters.
•
During 2025, the Committee will undertake a full review of its Remuneration Policy,
inadvance of putting a new Policy to shareholders at the 2026 AGM. As part of the
review, we will engage with our major shareholders.
See Figure 1, on pages 89 and 90, for further details on how the Directors’ Remuneration Policy will be
implemented in 2025/26.
The Policy, schemes and practices referred to in the Remuneration Committee
overview on page 65 are designed to support our strategy and promote the
long-term success of M&S, while following the below principles.
Clarity
Remuneration arrangements are
transparent and promote effective
engagement with shareholders and
the workforce.
Simplicity
Remuneration structures are
uncomplicated, and their rationale
and operation are easy to
understand.
Risk
Ensure that reputational and other
risks from excessive rewards, and
behavioural risks that can arise
from target-based incentive plans,
are identified and mitigated.
Predictability
The range of possible values of
rewards to Executive Directors is
identified and explained at the time
of approving the Policy.
Proportionality
The link between individual awards,
the delivery of strategy and the
long-term performance of the
Company is clear. Outcomes should
not reward poor performance.
Alignment with culture
Incentive schemes that drive
behaviours consistent with M&S’
purpose, values and strategy.
Marks and Spencer Group plc Annual Report and Financial Statements 202586
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION IN CONTEXT
Colleague engagement
The Committee strongly believes in the key role colleague voice plays in contextualising
remuneration decisions. Committee members receive colleague feedback directly and
as part of Board meetings.
The Committee also engages with colleagues directly via BIG. Since 2018, the Chair of
BIG has been invited to attend a Remuneration Committee meeting each year to share
colleague feedback and contribute to reward discussions.
This engagement gives the Committee greater visibility of the things that really matter
to our colleagues. It also gives the Committee the opportunity to explain and discuss
our pay practices, and how executive pay aligns with pay across the wider workforce.
Examples of colleague engagement can be found throughout this Annual Report, but
particularly on pages 9 and 32 to 35.
Colleague reward
We want everyone at M&S to be rewarded fairly and competitively. The Committee
monitors and reviews remuneration policies in the wider workforce. Management
provides the Committee with updates on pay arrangements and their proposed
approach to forthcoming pay reviews, including hourly paid Customer Assistants.
From April 2025, the rate for M&S Customer Assistants increased by 5% to £12.60 nationally,
and £13.85 in London. This represents an investment of £95m in retail pay, bringing the
total investment to more than £285m over the last three years. Overthe same period,
pay has increased by over 26%, more than double the rate of inflation over the same
period. For the third year, colleagues who are not eligible for a bonus received an M&S
e-gift card in recognition of their contribution to our peak period overChristmas.
For salaried colleagues, effective July 2025, the salary pay review budget is 3%.
We continue to provide a highly competitive overall package which includes a market
leading colleague discount, pension contributions up to 12%, life assurance and
VirtualGP as well as enhanced maternity, paternity and adoption leave.
The Committee reviews all bonus costs and approves all PSP awards made to senior
executives, considering the Company’s financial performance and pay investment in the
wider workforce.
Share ownership across our colleagues
M&S is a proud advocate of employee share ownership. The Board believes this supports
colleagues sharing in M&S’ success, being owners of our business, and aligning with our
shareholders’ interests.
Across our UK colleagues, M&S has a significant number of participants in all-employee
share schemes. Around 14,000 colleagues hold over 42m Save As You Earn (SAYE)
options in our ShareSave scheme and over 3,900 colleagues hold shares in our Share
Incentive Plan (SIP), ShareBuy.
In February 2025, our 2021 ShareSave scheme matured. Over 3,400 colleagues, the
majority of whom were Customer Assistants, participated in the scheme. On average
the typical saving was £80 per month and, factoring in the discounted option price and
share price growth at maturity, the average gain was £2,216.
Additionally, colleagues who participate in the ABS receive a portion of their bonus in
shares with deferred vesting after three years. For our most senior colleagues, 50% of
the bonus award is deferred, while for less senior colleagues this deferred element
represents a third of their total award.
Consideration of shareholder views
The Committee, led by the Committee Chair, annually engages with investors ahead of
our AGM, to answer remuneration queries and provide additional context for decisions.
This typically starts in written format, with a meeting for further discussion.
Shareholder engagement is not limited to the AGM season, and the Committee
welcomes open, two-way feedback and conversation on all matters of remuneration
throughout the year.
CEO pay ratio
Given that the majority of our workforce are store based, with a significant number of
part-time colleagues, calculating a full-time equivalent rate is complex. Consequently,
we have revised our methodology this year from Option A to Option B. Under the legislation
this methodology means that we use gender pay gap data, which is readily available, to
identify the 25th, 50th and 75th percentile of UK colleagues using the 5 April 2024 snapshot
date. A full-time equivalent total pay figure is then derived using the single figure
methodology for the three colleagues. To ensure these are representative colleagues,
we have also analysed the total pay of colleagues adjacent to the three colleagues.
We have compared last year’s outcomes under methodologies A and B, and the change
does not lead to a material difference in the results.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 87
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION IN CONTEXT CONTINUED
CEO pay ratio continued
For the CEO pay ratio, we have used the CEO’s total pay as detailed in Figure 3 on page 91.
TheCEO’s remuneration package includes a significant variable component to align
outcomes to Company performance. Therefore, the pay ratio can fluctuate year to year
based on business performance and incentive outcomes. The increase in the pay ratio
this year is attributed to strong performance, which has elevated the bonus and PSP
outturns. Additionally, the total pay figure incorporates a significant proportion of
shareprice appreciation, as explained on page 91.
Year Methodology
25th percentile
ratio
50th percentile
ratio
75th percentile
ratio
2025 Option B 294:1 261:1 252:1
2024 Option A 216:1 198:1 166:1
2023 Option A 131:1 120:1 102:1
2022 Option A 128:1 117:1 99:1
2021 Option A 55:1 50:1 42:1
2020 Option A 64:1 59:1 51:1
The Remuneration Committee considers the pay ratios alongside other reference points. It
believes the median pay ratio this year aligns with our pay, reward and progression policies
for UK colleagues, reflecting our pay for performance philosophy.
The table below outlines the base salary and total pay and benefits for the CEO and the
25th, 50th and 75th percentile colleagues.
Pay data
Salary
£000
Total pay
and benefits
£000
Salary
£000
Total pay
and benefits
£000
2023/24 2023/24 2024/25 2024/25
CEO remuneration 818 5,092
1
843 7,084
2
UK colleague 25th percentile 22 24 24 24
UK colleague 50th percentile 24 26 25 27
UK colleague 75th percentile 29 31 27 28
1 Updated to reflect value of PSP at time of vesting.
2 As detailed in Figure 3 on page 91, £6,189,144 of the CEO’s total package is from variable pay. Half of his
2024/25 bonus is deferred into shares for three years. Shares that vest under the PSP are subject to a
two-year post vest holding period. The increase in M&S’ share price over the period from when the PSP
was granted in July 2022 to the end of March 2025 has had significant impact on the value of the 2022
PSP. £2,695,938 of the CEO’s total pay is attributable to share price increase. This reflects the
Company’s strong growth over the last three years and is aligned to the shareholder experience.
Gender pay gap
The M&S UK median pay gap is 5.5% (down from 6.2% last year), and the mean gap
is 12.2% (down from 12.6% last year). We pay our colleagues according to their role,
regardless of their gender. For example, all Customer Assistants are paid the
same hourly base rate. However, more men earn additional premiums causing a
positive gender pay gap.
A more diverse, equitable and inclusive M&S is a critical enabler of the
higher-performance customer-centric culture that we’re aiming for. Creating an
environment where everyone can thrive and contribute to the success of M&S is
the aim of our diversity, equity and inclusion (DE&I) strategy, and with 70% of our
workforce being women, we continue to focus on both the representation and
experience of women in our business.
Representation of women is strong at all levels of the business, and importantly
in our talent pipelines too. We have built stronger rigour around our hiring, talent
and performance routines to ensure women have equal access to development
and progression opportunities. Women account for over 50% of our senior leaders,
over 50% of our store leadership teams and 70% of colleagues on internal
development programmes. We also have no disparity in performance and talent
ratings between men and women.
We have an ongoing ambition to be the leading employer for women in retail.
Early progress included improved support for those taking and returning from
family leave, better flexible working options, and increased awareness and
support for women’s health and life changes, with a particular focus on
menopause. We’ve built on this recently, with continued commitment to support
in significant moments – demonstrated by our signing of the Miscarriage
Association’s Pregnancy Loss Pledge.
Our colleague inclusion networks have continued to drive greater impact, with
both the Gender Equality and Menopause Networks launching initiatives including
mentoring circles, role modelling and networking events and awareness raising
activity aimed to reduce stigma and promote allyship.
We know there’s more to do and plan to build further from this position of
strength with a particular focus in areas and roles where women are less well
represented. Being close to our colleagues and listening and responding to the
challenges they’re facing will be key to this.
Marks and Spencer Group plc Annual Report and Financial Statements 202588
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
SUMMARY OF REMUNERATION POLICY
Our current Directors’ Remuneration Policy, which was approved by shareholders on 4 July 2023, is summarised in the table below. The full Policy can be found on pages 108 to 115
of the 2023 Annual Report, available on our corporate website. The Policy is designed to attract, retain and motivate our leaders within a framework aligned to our shareholders’
interests and designed to promote the long-term success of M&S.
At the 2026 AGM we will be seeking shareholder support and approval for a new Remuneration Policy. During the coming year, the Committee will be reviewing the Policy to ensure
any new Policy continues to support and drive the overall business strategy, while considering the overall M&S remuneration framework and the external regulatory environment.
Figure 1: Summary of Policy and implementation in 2025/26
Fixed pay
Remuneration Policy Implementation in 2025/26
Salary
•
Salaries are payable in cash and are
reviewed annually by considering a
number of factors, including external
market data, historical increases and
salary review principles applied to the
rest of the business.
•
2% increase for the CEO, below that of the
wider workforce. No increase for the CFO
as her salary was set on appointment.
•
Further salary details are on page 92.
Pension
•
Directors may participate in the Your
M&S Pension Saving Plan (a defined
contribution arrangement), on the
same terms as all other colleagues:
where the employee contributes 6% of
salary, the maximum employer
contribution is 12% of salary.
•
An alternative cash payment in lieu of
pension payment is available (capped
at 5% of salary).
•
The CEO and CFO are members of the
Your M&S Pension Savings Plan. The CEO
contributes 3% of his salary and the CFO
6% of her salary into the scheme, and the
Company contributes 6% and 12%
respectively.
•
Further pension benefit details are on
page 92.
Benefits
•
As with all colleagues, directors are offered
benefits including colleague discount,
salary sacrifice schemes and participation
in all-employee share schemes.
•
No change versus implementation in
2024/25.
•
Further benefit details are on page 92.
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
Annual Bonus
Scheme (ABS)
Cash bonus
Remuneration Policy Implementation in 2025/26
•
Directors participate in this non-contractual,
discretionary scheme. Performance is measured
against one-year financial and individual
performance targets linked with delivery of the
business plan.
•
At least half of awards are measured against
financial measures, which typically include
Group profit before tax and adjusting items.
•
Corporate and individual elements may be
earned independently. No part of the individual
objectives may be earned unless a threshold
level of PBT has been achieved, after which up to
40% of the maximum may be payable for the
achievement of individual objectives.
•
Total maximum annual potential of up to 200%
of salary for each director.
•
The Committee retains the right to exercise
discretion, both upwards and downwards, to
ensure that the level of award is appropriate.
•
Cash bonus payments are subject to two-year
clawback provisions. Clawback applies in
circumstances such as, but not limited to, a
material misstatement of the Company’s
audited results, an error in calculation of the
award, gross misconduct, or events or behaviour
that have a detrimental impact on the
reputation of any member of the Group.
•
Executive Directors’ maximum bonus
opportunity is 200% of salary.
•
70% will be measured against PBT and 30% will
be payable for the achievement of individual
objectives. Targets will be disclosed retrospectively
for reasons of commercial sensitivity.
Link to strategy
2025 20252026 20262027 20272028 20282029 2030 20302029
2
3
4
Marks and Spencer Group plc Annual Report and Financial Statements 2025 89
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
SUMMARY OF REMUNERATION POLICY CONTINUED
Deferred Share
Bonus Plan (DSBP)
Remuneration Policy Implementation in 2025/26
•
Not less than 50% of any bonus earned is paid in
shares which are deferred for three years.
•
Malus provisions apply to the deferred share awards.
•
50% of any bonus earned by the Executive
Directors in respect of 2025/26 will be
deferred into shares for three years.
Performance Share
Plan (PSP)
Remuneration Policy Implementation in 2025/26
•
Directors are eligible to participate in the PSP.
Thisis a non-contractual, discretionary plan and
isM&S’ main long-term incentive scheme.
•
Performance may be measured against
appropriate financial, non-financial and/or
strategic measures. Financial measures must
comprise at least 50% of awards.
•
Malus and clawback provisions apply to these
awards. Clawback triggers include, but are not
limited to, a material misstatement of the Company’s
audited results, an error in calculation of the award,
gross misconduct or events or behaviour that have
a detrimental impact on the reputation of any
member of the Group.
•
The maximum value of shares at grant is capped at
300% in respect of a financial year.
•
Awards are subject to a further two-year holding
period after the vesting date.
•
Award of 250% of salary for the Executive
Directors.
•
Based on EPS (30%), ROCE (30%), relative TSR
(20%) and strategic measures (20%) relevant to
the achievement of the business strategy over
the next three years.
•
Further details are on page 95.
Share ownership
Remuneration Policy Implementation in 2025/26
Shareholding
requirements
•
Directors are required to hold shares equivalent
in value to a minimum percentage of their salary
within a five-year period from their appointment
date.
•
For the CEO the requirement is
250% of salary and for the CFO
the requirement is 200%.
Post-
cessation
holding
requirements
•
Directors are required to continue to hold their shareholding requirement, or, if their
level of shareholding is below the requirement, their actual shareholding, for two
years after leaving M&S.
Recruitment Policy Termination Policy
•
Service contract. Executive Directors have
rolling contracts for service which may be
terminated by M&S giving 12 months’ notice
to the CEO and six months’ notice to the
CFO. Both individuals are required to give
sixmonths’ notice.
•
Base salary. Salaries are set by the
Committee, taking into consideration a
number of factors, including the current pay
for other Executive Directors, the experience,
skill and current pay level of the individual,
and external market forces.
•
Pension, benefits, ABS and PSP in line with
the approved Remuneration Policy.
•
Buy-out awards. The Committee may offer
compensatory payments or buy-out awards,
determined on a case-by-case basis. The
specifics of any buy-out awards would be
dependent on the individual circumstances
of recruitment. The Committee’s intention
would be that the expected value awarded is
no greater than the expected value forfeited
by the individual.
•
Salary, pension and benefits. Payment made
in line with contractual notice periods.
•
ABS. There is no contractual entitlement to
payments under the ABS. If the director is
under notice or not in active service at either
the relevant year end or on the date of
payment, awards (and any unvested deferred
bonus shares) may lapse. The Committee
may use its discretion to make a bonus award.
•
Long-term incentive awards. The treatment
of outstanding awards is determined in
accordance with the plan rules.
•
Repatriation. M&S may pay for repatriation
where a director has been recruited from
overseas.
•
Legal expenses and outplacement. Where
adirector leaves by mutual consent, M&S
may reimburse reasonable legal and
outplacement services.
Link to our strategic priorities:
1
Create exceptional products
2
Drive profitable sales growth
3
Deliver target operating margins
4
Build the M&S we need to be
2026 2027 2028 2029 2030 Link to strategy
Year 1
Year 2 Year 3 Year 4 Year 5
2026 2027 2028 2029 2030 2031 2032 Link to strategy
Figure 1: Summary of Policy and implementation in 2025/26 continued
Link to strategy
1
2
3
4
2
3
4
4
Marks and Spencer Group plc Annual Report and Financial Statements 202590
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT
Executive Directors’ remuneration
Each year, the Remuneration Committee reviews the current senior remuneration
framework. It assesses whether the existing incentive arrangements remain appropriate
in the context of the business strategy, fulfil current external guidelines and are aligned
with a range of internal factors, including the pay arrangements and policies throughout
the rest of the business.
In its discussions, the Committee aims to ensure not only that the remuneration
framework is aligned to the delivery of business priorities, but also that targets are
appropriately challenging and outcomes fairly reflect the performance of the business
and individuals.
A significant proportion of the performance measures used in the incentive schemes are
integrated with M&S’ KPIs and strategic priorities detailed in the Strategic Report, as
illustrated on pages 2, 12, 13 and 22.
Figure 2 summarises the remuneration decisions and outturns for the CEO during the
reported financial year within the senior remuneration framework. Further details of
payments made during the year are set out in the table below (Figure 3) and later in this
report. The increase in M&S’ share price over the period from when the PSP was granted in
July 2022 to the end of March 2025 has had significant impact on the value of the 2022
PSP. £2,695,938 of the CEO’s total pay is attributable to share price increase. This reflects
the Company’s strong growth over the last three years and is aligned to the shareholder
experience.
Figure 2: CEO remuneration structure 2024/25
Fixed pay Annual bonus PSP Total pay for 2024/25
Base salary
Benefits
Pension benefits
200% of salary maximum bonus
opportunity (with 50% deferral)
Measured against Group PBT
beforeadjusting items and
individualperformance
250% of salary awarded in 2022
Measured against adjusted EPS,
adjusted ROCE, relative TSR and
strategic measures
Total payments are 92%
ofmaximumpotential
3% salary increase effective
1July2024
Outcome is 97% of maximum
bonusopportunity
90% of award vested
Read more on page 93. Read more on page 95.
Figure 3: Total single figure remuneration (audited)
Director Year
Salary
£000
Benefits
£000
Pension
benefit
£000
Total
bonus
£000
Total PSP
vested
1
£000
Other
2
£000
Total
pay
£000
Total
fixed pay
£000
Total
variable pay
£000
% of total pay
generated by share
price appreciation
Stuart Machin 2024/25 843 0 51 1,635 4,555 0 7,084 894 6,190 38%
2023/24 818 0 90 1,570 2,614 0 5,092 908 4,184 24%
Alison Dolan 2024/25 143 0 6 201 — 2,032 2,382 149 2,233 N/A
(from 6 January 2025) 2023/24 — — — — — — — — — —
Katie Bickerstaffe
3
2024/25 216 0 11 0 2,847 0 3,074 227 2,847 55%
(until 10 July 2024) 2023/24 767 46 38 1,304 2,614 0 4,769 851 3,918 26%
1 The PSP vesting values for 2024/25 are based on a share price of £3.49 (the average share price from
30December 2024 to 29 March 2025). The 2023/24 values have been restated based on the share price
of£2.89 at time of PSP vesting and to include the 2p dividend paid in July 2024.
2 In line with the approved Recruitment Policy, £714,840 of this figure relates to Alison Dolan’s 2024
Rightmove annual bonus that she forfeited on resigning; 40% will be paid as cash and 60% will be
deferred in shares until March 2027. £1,317,340 reflects the face value of share awards granted
tocompensate her, on a fair value basis, for Rightmove share awards forfeited. The fair value was
calculated to take account of the original performance period and the estimated satisfaction of the
performance conditions of the original awards. The vesting timelines are in line with the time horizons
ofthe original awards.
3 Katie Bickerstaffe did not participate in the 2024/25 ABS.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 91
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Salaries
When reviewing salary levels, the Committee takes into account a number of internal
and external factors, including Company performance during the year, external market
data, historical increases made to the individual and, to ensure a consistent approach,
the salary review principles applied to the rest of the business.
For salaries effective July 2025, the Committee has awarded an increase of 2% to Stuart
Machin and his new salary will be £865,694. This is below the 5% awarded to Customer
Assistants and below the salaried pay review budget of 3%. Other senior management
received a 2% increase.
The next annual salary review for the Executive Directors will be July 2026. The table
below details the Executive Directors’ salaries as at 1 July 2024 (or date of appointment)
and salaries which will take effect from 1 July 2025.
Figure 4: Salaries
Annual
salary
as of
1 July 2024
£000
Annual
salary
as of
1 July 2025
£000
Change in
salary
% increase
Stuart Machin 848.7 865.7 2%
Alison Dolan
1
600.0 600.0 0%
1 Alison Dolan joined on 6 January 2025; her next annual salary review will be July 2026.
Benefits (audited)
The Remuneration Policy permits that each Executive Director may receive a car or cash
allowance as well as being offered the benefit of a driver. Neither Stuart Machin nor
Alison Dolan receives a car or cash allowance.
In line with all other colleagues, Executive Directors receive colleague discount and life
assurance and are eligible to participate in salary sacrifice schemes such as Cycle2Work.
Pension benefits (audited)
Stuart Machin and Alison Dolan are both members of the Your M&S Pension Savings Plan.
During the year, the CEO contributed 3% and the CFO contributed 6% of salary into the
scheme, and the Company matched these with contributions of 6% and 12% respectively.
The maximum level of contribution offered by M&S to all other colleagues is 12%.
The value of the Company’s contribution in the year for Stuart and Alison is shown in the
single figure table (Figure 3) on the previous page.
Deferred annual bonus (audited)
Currently 50% of any bonus award is compulsorily deferred into a conditional share
award. These awards vest after three years, subject to continued employment as well as
malus provisions. Consistent with the reporting requirements, the face value shown in
the table below relates to the total number of shares granted in July 2024.
Figure 5: DSBP awards made in respect of 2023/24
Basis of award
Face value of award
£000
End of deferral
period
Stuart Machin 50% of bonus £785 05/07/2027
Katie Bickerstaffe 50% of bonus £652 05/07/2027
1 The share price used to calculate the number of shares was £2.89, being the average share price
between 26 June 2024 and 2 July 2024.
ABS 2024/25 (audited)
Annual performance for the year was measured against pre-determined PBT (70%) and
individual performance (30%) targets. PBT is used as a core bonus determinant, being
animportant measure of overall performance, and is consistent with how business
performance is assessed internally by the Board and the Executive Committee.
The adjusted PBT outturn for the year of £875.5m was above the stretch target
of£842m, resulting in a maximum payout under the PBT element of the bonus.
Thisreflects the strong performance of M&S, against stretching targets set at the
startof the year.
Individual performance was measured against a scorecard of individual measures set against
the areas of delivery of the transformation plan that were deemed most critical to the
future success of M&S. Individual performance was measured independently of PBT
performance and no individual element could be earned until a minimum level of PBT
was achieved.
The Committee assessed the CEO’s individual objectives and determined an award
of27% for Stuart, resulting in an overall bonus achievement of 97% of maximum
opportunity. The CFO worked three months of the financial year during which she spent
time learning the business and getting closer to customers in stores. The Committee
determined she would receive the part of her bonus relating to the financial performance
of the business only, resulting in an overall outcome of 70% of maximum (then pro-rated
for her period of employment).
The Committee determined that the total awards were appropriate in the context of
several factors. These included M&S’ overall financial performance, the individual’s
performance, and the level of bonus payable elsewhere in the business.
Figures 6 and 7 set out the extent to which the CEO achieved his individual objectives
(worth up to 30% of the bonus opportunity) and achievement against adjusted PBT
targets (up to a maximum 70% of the bonus opportunity). Total awards shown directly
correspond to the figure included in the single figure table (Figure 3) on page 91.
Marks and Spencer Group plc Annual Report and Financial Statements 202592
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 6: Individual objectives (audited)
Stuart
Machin
Continue leadership and governance of Executive Committee and development of a
high-performing leadership team.
Continuation of regular cadence with Executive Committee; regular discussion topics
included financial performance, health, safety and security, cyber-security and internal audit
and risk. Regular updates on building a high-performance culture, talent and succession
planning and driving shareholder value. Review of progress against key transformation
priorities and overall strategy. Further discussions on capital allocation and business case
approvals. In addition, continuation of monthly operating boards with individual ExCo
members on performance, controls and governance, approvals and strategic priorities.
Through careful succession planning, evolved the Executive Committee by recruiting Alison
Dolan as CFO and John Lyttle as Fashion, Home & Beauty Managing Director. Continued use
of external coach to support ExCo development.
Continue to restructure the cost base, delivering a permanent reduction.
Delivered structural cost out savings over £120m in-year and as a result, increased cost
savings FY28 target from £400m to £500m. Completed the exit of ‘bulky’ furniture business,
realising double digit savings. Simplified roles in the Support Centre and in stores.
Commencement of broader programme reviewing end-to-end processes as part of
‘Structural Cost Out’ programme.
Accelerate the supply chain strategies across Food and Fashion, Home & Beauty.
In Food, completed the roll out of Relex ‘Forecasting, Ordering and Allocation’ systems
withall categories rolled out. As part of our ‘Fortress Factory’ programme, five long-term
contracts were signed with supplier partners. Continued rollout of store operations ‘One Best
Way’ programme to the East and West divisions. Announced plans to open a new 390k square
foot distribution centre in Bristol as part of the plan to modernise the Food logistics network
and create capacity for growth.
In Fashion, Home and Beauty, increase in Castle Donington ‘hanging’ capacity and
commencement of the automated Click and Collect build as part of modernisation
programme. Rationalised logistics network through ‘bulky’ furniture exit.
Deliver a revised Data, Digital & Technology strategy.
A comprehensive five-year Data, Digital and Technology plan (‘Evolution’ plan) is now in
place, outlining key elements such as timing, resource requirements, capital allocation, and
partner support. Rachel Higham, the Chief Digital and Technology Officer, has successfully
integrated into the organisation and Executive Committee. In addition, the Digital and
Technology leadership team has evolved with new experienced hires across both Digital and
Technology foundations. There has also been increased focus on investing in technology
infrastructure, including network upgrades across the business (stores, distribution centres
and Support Centres). Additionally, a new payroll system was successfully implemented and
migrated on plan.
Improve the online Fashion, Home & Beauty performance.
Online sales grew +8.8% and UK volumes grew +10%. Online market share (Kantar, 52 weeks)
increased from 7.1% to 7.9%; an improvement of 80 basis points. This performance was
supported by a series of enhancements to improve the customer experience, including updates
to the website and App, more engaging product display pages, improved visual options, and
higher quality photography and video content. Further experiential upgrades such as the
introduction of the ‘Frequently Bought Together’ feature, Style Tips and a Men’s Suiting Guide,
further enhanced the shopping experience. Additionally, digital marketing investment was
increased by 79%, helping to drive greater visibility and engagement. As part of the strategy to
accelerate online growth, external support was brought in to conduct a thorough review of the
strategy and operating model to ensure we were set up for future growth.
Stuart
Machin
Role model and embed the M&S purpose, vision and behaviours across the business.
As part of developing a high-performance culture, set clear and specific business objectives
that were cascaded throughout the business, with progress reviewed monthly through the
monthly operating boards. Reinforced our vision, purpose, and behaviours across all internal
and external communications, with a continued focus on the ‘Closer to Customers, Closer to
Colleagues’ programme. As part of this initiative, Support Centre colleagues dedicated over
200,000 hours supporting more than 700 stores nationwide. Company engagement survey
results reflected positive momentum, with overall scores improving by 12% and participation
rising by 20%, including a notable increase in perceptions of clarity of purpose.
Figure 7: ABS 2024/25 outturns (audited)
Adjusted PBT (70%) Individual (30%) Total award
Targets/performance outturn
1
Performance outturn Achievement
Director Min £780m Max £842m % of max
% of
salary £000
Stuart
Machin
70% of max opportunity
£875.5m
27% of max opportunity
97% 194% 1,635
Alison
Dolan
70% of max opportunity
£875.5m
0% of max opportunity 70% 140% 201
1 0% of bonus was payable for adjusted PBT of £780m, 50% payable at £800m and 100% payable at £842m.
DSBP awards in respect of 2024/25
Currently, 50% of any bonus award is compulsorily deferred into a conditional share
award. These awards vest after three years, subject to continued employment as well as
malus provisions. Half of the value shown for 2024/25 bonus payments in the single
figure table (Figure 3) will be deferred in shares.
ABS for 2025/26
During the year, the Committee reviewed the 2025/26 scheme, considering the next
phase of growth together with bonus arrangements elsewhere in the business.
The Committee was satisfied that the structure of the ABS, as approved by shareholders
at the 2023 AGM (and unchanged from 2024/25), remains appropriate. Subject to the
achievement of stretching targets, set in line with the 2025/26 business plan, the scheme
provides for a competitive bonus opportunity with a strong focus on stretching
PBTperformance.
The Executive Directors are eligible to receive a bonus award of up to 200% of salary.
Performance will be focused on Group PBT before adjusting items (70%). The remaining
30% will be measured against a scorecard of individual objectives, identified as the
measurable key priorities required to drive the continued growth of M&S. Individual
performance will again be measured independently of PBT performance; no individual
element may be earned until a threshold level of PBT is achieved.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 93
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
ABS for 2025/26 continued
The performance targets have yet to be set and the individual objectives for the 2025/26
scheme are deemed by the Board to be too commercially sensitive to disclose in this
report but where possible, they will be disclosed next year.
The Committee, in its absolute discretion, may use its judgement to adjust outcomes to
ensure any awards made reflect overall business and individual performance during the
year. Any discretion applied will be justified and clearly disclosed.
Performance Share Plan (PSP)
PSP awards made in 2024/25 (audited)
Ahead of grants being made, the Committee reviewed the long-term incentive framework
at M&S, assessing the extent to which it remained suitable. After consideration, it was
decided that the current structural arrangements remained appropriate. The2024 PSP
award was based on adjusted EPS (30%), adjusted ROCE (30%), relative TSR (20%) and
20% based on strategic transformation goals relevant to the achievement of the
business strategy over the next three years. Detailed targets can be seen in Figure 8.
TSR is measured against a bespoke group of 12 companies taken from the FTSE 350 General
and Food & Drug Retailers indices, reviewed prior to grant to ensure the constituents remain
appropriately aligned to M&S’ business operations. These companies are listed in Figure 9.
The strategic targets are deemed too commercially sensitive to disclose but will be
reported at the time of vesting.
For the 2024 PSP, a grant of 250% of salary for the CEO was approved by the Committee
and was made on 3 July 2024. Following her appointment the CFO was granted a 2024
PSP, to compensate for a 2024 Rightmove PSP that was forfeited on resigning. The face
value of her M&S PSP replicated the face value of her Rightmove award that she forfeited.
In line with policy, awards will vest three years after the date of grant, to the extent their
performance conditions are met, and must then be held for a further two years. Clawback
provisions apply during this holding period. For financial measures, 20% of awards will
vest for threshold performance, increasing to 100% on a straight-line basis between
threshold and maximum performance. For strategic measures, no element of this award
shall vest if the targets are not achieved. This supports the Committee’s view that
delivery of these strategic measures is critical; payment for achievement below the
target would not be appropriate.
Figure 8: Performance conditions for PSP awards made in 2024/25 (audited)
Details
2024 award measures Weighting Threshold Maximum
Adjusted EPS in 2026/27 (p) 30% 30.5p 39.5p
Adjusted ROCE in 2026/27 (%) 30% 15.9% 18.4%
Relative TSR 20% Median Upper
quartile
Strategic measures 20% M&S.com growth
Food like-for-like
sales
Operating cost to
sales ratio
Figure 9: TSR comparator group 2024/25 awards
•
ASOS
•
B&M European
•
Currys
•
Dunelm Group
•
Frasers
•
JD Sports Fashion
•
J Sainsbury
•
Kingfisher
•
N Brown Group
1
•
Next
•
Tesco
•
WHSmith
1 N Brown Group was in the TSR comparator group when the awards were granted in July 2024. It
subsequently delisted in February 2025 and will be removed from the comparator group.
Figure 10: PSP awards made in 2024/25 (audited)
Basis of award
% of salary
Threshold
level of
vesting
Face value of
award
£000
1
End of
performance
period Vesting date
Stuart Machin 250% 20% 2,060 27/03/2027 05/07/2027
Alison Dolan
2
131% 20% 785 27/03/2027 05/07/2027
1 The face value of the awards granted was calculated by multiplying the average share price on the
fivedealing days prior to the date of grant by the number of shares awarded. For the CEO’s award, the
share price used was £2.89, being the average share price between 26 June and 2 July 2024. For the CFO’s
award, the share price used was £3.30, being the average share price between 17 and 21 March 2025.
2 131% of salary based on the forfeited award of £785,150 divided by the CFO’s salary on appointment
of£600,000.
3 PSP grants were made as a conditional share award.
Marks and Spencer Group plc Annual Report and Financial Statements 202594
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 11: PSP awards vesting in relation to 2024/25 (audited)
For directors in receipt of PSP awards granted in 2022, the awards will vest in July 2025,
based on three-year performance over the period to 29 March 2025. For threshold
performance, 20% of the 2022 award would vest, increasing to 100% on a straight-line
basis between threshold and maximum performance.
Despite achieving the store staff cost to sales ratio target, this measure is also underpinned
by a requirement of no significant increase in central headcount over theperiod. The
Committee considered the impact of additional central costs and determined that the
vesting outcome of this strategic measure should be reduced by 50%. Otherwise, performance
was assessed and the Committee determined that 90% of the total award will vest. The
Committee reviewed this level of vesting and the resulting value of awards against the
wider business performance over the period and determined this level of payment was
appropriate. No further discretion was applied to the formulaic vesting outcome and
the Committee was also satisfied that there were no windfall gains.
Details of performance against the specific targets set are shown in the table below.
Thetotal vesting values shown in Figure 12 directly correspond to the figure included
inthe single figure table (Figure 3) on page 91.
Strategic measures
Final year
adjusted
EPS
(p)
Final year
adjusted
ROCE
(%)
TSR
(relative
ranking)
M&S.com
growth
Food
like-for-like
sales
Store staff
cost: Sales
ratio
Target and
weighting 30% 30% 20% 20%
Overall
vesting
Threshold
performance 18p 11.5% Median N/A N/A N/A
Maximum
performance 27p 14.0%
Upper
quartile 15.0% 1.5% 10.3%
Actual
performance
achieved 31.9p 16.4%
Above
upper
quartile 6.5% 8.5% 9.7%
Percentage
ofmaximum
achieved 30% 30% 20% 0% 6.7% 3.3% 90%
Figure 12: Value of PSP awards vesting in relation to 2024/25 (audited)
At the end of performance period
(29March 2025)
Number
of shares
granted
Outcome
achieved
%
Face value
at the time
of grant
£000
1
Value of
shareprice
appreciation
£000
2
Dividend
equivalents
accrued
during the
performance
period
£000
PSP total
£000
Stuart Machin 1,432,562 90% £1,800 £2,696 £59 £4,555
1 Calculated using the grant price of £1.39.
2 Calculated using the difference between the grant price of £1.39 and the average share price
from30December 2024 to 29 March 2025 of £3.49.
PSP awards to be made in 2025/26
During the year, the Committee reviewed the long-term incentive framework at M&S,
assessing the extent to which it remained suitable. The 2025 PSP will maintain the
measures used for the 2024 PSP awards – 30% adjusted EPS, 30% adjusted ROCE, 20%
relative TSR and 20% strategic measures.
The Committee believes in the importance of strategically-aligned incentives so that
Executive Directors are motivated to deliver the M&S reshaping for growth strategy.
TheCommittee’s aim is to ensure realistic and sustainable targets to support the delivery
of such growth. As a result of the recent cyber incident, the Committee agreed to delay
setting the targets for the 2025 awards and these will be disclosed before the end of
theyear.
Following careful consideration and discussion on the need to incentivise the most
senior leaders of M&S and reward truly exceptional performance, the Committee
approved a 250% of salary award for the Executive Directors in 2025. The Committee
willreview and reconfirm this decision immediately prior to grant to ensure this remains
appropriate, particularly in light of share price performance.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 95
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 13: Directors’ shareholdings (audited)
The table below sets out the total number of shares held by each Executive Director
serving on the Board during the period to 29 March 2025.
There have been no changes in the current directors’ interests in shares or options granted by
the Company and its subsidiaries between the end of the financial year and 20 May 2025. No
director had an interest in any of the Company’s subsidiaries at the statutory end of the year.
With
performance
conditions
Without performance
conditions
Shares
owned
outright
1
PSP
2
DSBP
3
RSP
4
Stuart Machin 1,212,766 3,218,596 1,013,307 —
Alison Dolan Nil 237,996 Nil 399,313
1 Includes shares owned by connected persons.
2 PSP awards were made as conditional share awards; the performance conditions have previously
beendisclosed.
3 Awards under the DSBP relate to half of the annual bonus earned in respect of 2021/22, 2022/23 and
2023/24, deferred into shares for three years.
4 Alison Dolan’s RSP awards were granted as replacement share awards to compensate for awards that
she forfeited on resigning from Rightmove.
5 The figures in the table above include dividend equivalents that are accrued on share awards.
Figure 14: Shareholding requirements including post-cessation (audited)
All Executive Directors are required to build a holding of shares equivalent in value to a
minimum percentage of their salary within a five-year period from their appointment
date. For the CEO this requirement is 250% of salary and for the CFO the requirement is
200%. A similar requirement of 100% of salary currently applies to members of the
Executive Committee.
The chart below shows the extent to which each Executive Director has met their target
shareholding as at 29 March 2025. For Stuart Machin, his shareholding requirement is
measured from his date of appointment as CEO.
For the purposes of the requirements, the net number of unvested share awards not subject
to performance conditions is included and is reflected in the chart below. The Committee
continues to keep shareholding requirement guidelines and actual director shareholdings
under review and will take appropriate action should it consider it necessary.
To support the Committee’s intention to drive long-term, sustainable decision-making
for the benefit of M&S and our shareholders, and in line with the Code changes and the
Investment Association’s guidelines, in 2020 the Committee approved the extension of
shareholding guidelines to beyond the time at which an Executive Director leaves M&S.
Directors are required to maintain their minimum shareholding requirement, or, if their
level of shareholding is below this, their actual shareholding, for two years after leaving
M&S. The Committee has approved all vesting awards from 2020 grants onwards to be
held in a nominee vehicle to ensure the successful operation of this policy.
For the purposes of this calculation, an average share price is used to reduce the impact
of share price volatility on the results. The average share price for the year was £3.35,
with resultant shareholdings illustrated in the chart below.
Stuart Machin
691%
Alison Dolan
118%
Shares owned outright Unvested DSBP/RSP shares
Marks and Spencer Group plc Annual Report and Financial Statements 202596
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 15: Executive Directors’ interests in the Company’s share schemes
(audited)
Maximum
receivable at
1 April 2024
Awarded
during
the year
Exercised
during
the year
1
Lapsed
during the
year
Dividend
equivalents
accrued
Maximum
receivable
at 29 March
2025
Stuart Machin
PSP 3,480,085 712,408 904,657 100,519 31,279 3,218,596
DSBP 734,272 271,572 — — 7,463 1,013,307
RSP 401,716 — 404,365 — 2,649 —
SAYE — — — — — —
Total 4,616,073 983,980 1,309,022 100,519 41,391 4,231,903
Alison Dolan
PSP — 237,996 — — — 237,996
DSBP — — — — — —
RSP — 399,313 — — — 399,313
SAYE — — — — — —
Total — 637,309 — — — 637,309
Katie Bickerstaffe
PSP 3,324,992 — 904,657 1,209,339 25,122 1,236,118
DSBP 697,058 225,426 — 335,257 6,134 593,361
RSP 501,908 — 505,219 — 3,311 —
SAYE 4,535 — — 4,535 — —
Total 4,528,493 225,426 1,409,876 1,549,131 34,567 1,829,479
1 The share price on the date of vesting for the PSP and RSP awards was £2.89.
2 Katie Bickerstaffe’s outstanding share awards were pro-rated for time to 10 July 2024.
Employee share schemes
All-employee share schemes (audited)
Executive Directors may participate in ShareSave, the Company SAYE scheme,
andShareBuy, the Company’s SIP, on the same basis as all other eligible colleagues.
Further details of the schemes are set out in note 13 of the financial statements on
pages 153 to 154.
Dilution of share capital by employee share plans
Awards granted under the Company’s SAYE scheme and discretionary share plans can
be met by the issue of new shares when the options are exercised or through market
purchase shares. The Company monitors the number of shares issued under these
schemes and their impact on dilution limits.
Figure 16: All share plans
(As at 29 March 2025)
10%
7.18%
Actual Limit
Figure 17: Executive share plans
(As at 29 March 2025)
5%
0.97%
Actual Limit
Marks and Spencer Group plc Annual Report and Financial Statements 2025 97
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Figure 18: Performance and CEO remuneration comparison
This graph illustrates the Company’s performance against the FTSE 100 over the past 10 years. M&S re-entered the FTSE 100 Index on 18 September 2023. The calculation of TSR is
in accordance with the relevant remuneration regulations. The table below the TSR chart sets out the remuneration data for directors undertaking the role of CEO during each of
the last 10 financial years.
REMUNERATION REPORT CONTINUED
CEO
CEO single figure
(£000)
Stuart Machin — — — — — — — 2,708 5,092 7,084
Steve Rowe — 1,642 1,123 1,517 1,205 1,068 2,630 156 — —
Marc Bolland 2,015 — — — — — — — — —
Annual bonus
payment
(% of maximum)
Stuart Machin — — — — — — — 81.1% 96% 97%
Steve Rowe — 36.98% 0.00% 0.00% 0.00% 0.00% 95.0% — — —
Marc Bolland 31.9% — — — — — — — — —
PSP vesting
(% of maximum)
Stuart Machin — — — — — — — 51.0% 90% 90%
Steve Rowe — 0.00% 8.20% 34.0% 11.20% 0.00% 0.00% 51.0% — —
Marc Bolland 4.80% — — — — — — — — —
200
175
150
125
100
75
50
25
0
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25
28/03/15 02/04/16 01/04/17 31/03/18 30/03/19 28/03/20 03/04/21 02/04/22 01/04/23 30/03/24 29/03/25
FTSE 100 index Marks and Spencer Group plc
£
Marks and Spencer Group plc Annual Report and Financial Statements 202598
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 19: Percentage change in directors’ remuneration
2024/25 2023/24 2022/23 2021/22 2020/21
% change 2023/24-2024/25 % change 2022/23-2023/24 % change 2021/22-2022/23 % change 2020/21-2021/22 % change 2019/20-2020/21
Base
salary/
fees Benefits
Annual
bonus
Base
salary/
fees Benefits
Annual
bonus
Base
salary/
fees Benefits
Annual
bonus
Base
salary/
fees Benefits
Annual
bonus
Base
salary/
fees Benefits
Annual
bonus
Stuart Machin 3% –43% 4% 3% 12.5% 21% — — — — — — — — —
Alison Dolan — — — — — — — — — — — — — — —
Archie Norman 3% 100% — 3% — — 3% –100% — 1% 100% — 0% –74% —
Justin King 3% –100% — 3% — — 3% — — 1% — — 0% — —
Tamara Ingram 3% — — 3% — — 3% — — 1% — — 0% — —
Sapna Sood 3% — — 3% — — 3% — — 1% — — 0% — —
Evelyn Bourke 3% — — 3% — — 3% –100% — 1% — — — — —
Fiona Dawson 3% — — 3% — — 3% — — 1% — — — — —
Ronan Dunne 3% — — 3% — — — — — — — — — — —
Cheryl Potter 3% — — 3% — — — — — — — — — — —
UK M&S colleagues
(average FTE) 9.4% 9.8% 5.5% 8.5% 17% 23% 6% 0% –6% 2% — 100% 0% 0% —
1 See Figure 3 on page 91 for details of Executive Director remuneration which support the percentage changes above.
2 See Figure 22 on page 101 for details of Non-Executive Director remuneration which support the percentage changes above.
3 The change in benefit is blank where the benefit value was zero in the prior year as there is no figure to compare to.
4 No changes were made to benefits during the year.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 99
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 20: Relative importance of spend on pay
The table below illustrates the Company’s expenditure on total pay for all colleagues
and distributions to shareholders by way of dividend payments and share buyback.
Total colleague pay is the total pay for all Group colleagues. Group PBT before adjusting
items has been used as a comparison, as this is the key financial metric that the Board
considers when assessing Company performance.
2023/24
£m
2024/25
£m % change
Total colleague pay 2,040.1 2,168.6 6.3%
Total returns to shareholders 19.6 60.5 208.7%
Group PBT before adjusting items 716.4 875.5 22.2%
1 Group PBT before adjusting items as disclosed on page 2.
Figure 21: Service agreements
In line with our Policy, directors have rolling contracts which may be terminated by the
Company or the director giving notice as detailed in the table below:
Date of appointment Notice period
Stuart Machin 25/05/2022 12 months/6 months
Alison Dolan 06/01/2025 6 months/6 months
Directors appointed to the Board
Alison Dolan joined the Board on 6 January 2025 as CFO. Her remuneration upon
appointment, and her replacement share awards, were in line with the approved
Recruitment Policy. Details of RSPs are set out below. She was appointed on a annual
salary of £600,000; her incentive arrangements and benefits are aligned to that of an
Executive Director.
Alison received replacement share awards under the 2024 PSP (see page 94) and RSP
awards to compensate her for share awards forfeited by leaving Rightmove. The fair
value of these conditional share awards was calculated taking account of the original
period and estimated satisfaction of any performance conditions of the originalawards.
Face value of
award
£000 Vesting date
Alison Dolan RSP award 790 07/07/2025
RSP award 527 23/03/2026
1 The share price used to calculate the awards was £3.30, being the average share price between 17 and
21March 2025.
2 Dividend equivalents will be paid on the vesting date based on the number of vested shares.
It was agreed that Alison would be compensated for the loss of her 2024 Rightmove
annual bonus, at a value no greater than she would have received had she not resigned
her position to join M&S. As detailed in the single figure table (see Figure 3 on page 91),
Alison received £714,840 to compensate for her 2024 bonus
. Under the terms of the
buyout, and reflecting the Rightmove structure, 40% of the award was paid in cash,
and60% has been deferred in shares until March 2027.
Payments for loss of office 2024/25 (audited)
There were no payments for loss of office.
Payments to past directors during 2024/25 (audited)
As reported last year, Katie Bickerstaffe retired from her role as Co-CEO on 10 July 2024.
Her remuneration terms on leaving were in line with the approved Termination Policy.
As reported in the single figure table on page 91, she was paid £226,392 for the period
that she served as a director in the 2024/25 financial year. Katie did not receive any of
her fixed pay elements (salary, pension and benefits) after 10 July 2024, nor did she
participate in the 2024/25 ABS.
The Committee determined good leaver treatment in line with the plan rules. Therefore,
her unvested conditional shares awarded under the 2022 and 2023 PSP, and the 2022
and 2023 DSBP, have been pro-rated for time to 10 July 2024. In line with other participants,
90% of her 2022 PSP awards will vest in July 2025. After pro-ration, 816,332 shares will
vest at an estimated value of c.£2,846,631. In addition, a DSBP award granted in 2022 will
also vest in July 2025; after pro-ration, 265,714 shares will vest at an estimated value of
c.£926,571. Valuations for Katie’s PSP and DSBP vesting awards are based on a share
price of £3.49 (the average share price from 30 December 2024 to 29March 2025).
Further details will be disclosed in later reports on the vesting of Katie’s 2023 PSP and
DSBP awards granted in 2023 and 2024.
In line with policy, Katie is subject to post-cessation holding requirements and will
continue to maintain her in-employment shareholding requirement for two years after
leaving M&S.
Marks and Spencer Group plc Annual Report and Financial Statements 2025100
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Non-Executive Directors’ total single figure remuneration (audited)
Non-Executive Directors receive fees reﬂecting the time commitment, demands and
responsibilities of the role. Fees paid to the Non-Executive Directors and Board
Chairman for 2024/25 and 2023/24 are detailed in Figure 22.
Benefits include expense reimbursements relating to travel, accommodation and
subsistence in connection with attendance at Board and Committee meetings during
the year, which are deemed by HMRC to be taxable.
The amounts in the following table are the taxable expenses that the Company grossed
up and paid the UK tax on for the Non-Executive Directors. Non-taxable expense
reimbursements have not been included in the table.
In line with pay increases for salaried colleagues, Non-Executive Director fees will increase
by 3% to £81,276 with effect from 1 July 2025. The Board Chairman was also awarded an
increase of 3%, bringing the total aggregate fee to £695,564.
No change was made to the SID fee of £31,000, the fee of £20,000 for chairing a Committee
or the membership fee of £5,000.
Fee levels will again be reviewed in the year, ahead of any changes which would be
effective 1 July 2026.
Figure 22: Non-Executive Directors’ total single figure remuneration
(audited)
Director Year
Basic fees
£000
Additional
fees
£000
Benefits
£000
Total
£000
Archie Norman 2024/25 78 592 2 672
2023/24 76 575 1 652
Andrew Fisher 2024/25 20 13 0 33
(until 2 July 2024) 2023/24 76 51 1 128
Justin King 2024/25 78 4 0 82
2023/24 76 0 1 77
Tamara Ingram 2024/25 78 24 0 102
2023/24 76 20 0 96
Sapna Sood 2024/25 78 4 0 82
2023/24 76 0 0 76
Evelyn Bourke 2024/25 78 20 0 98
2023/24 76 20 0 96
Fiona Dawson 2024/25 78 30 0 108
2023/24 76 0 0 76
Ronan Dunne 2024/25 78 4 0 82
2023/24 76 0 0 76
Cheryl Potter 2024/25 78 4 0 82
2023/24 76 0 0 76
Marks and Spencer Group plc Annual Report and Financial Statements 2025 101
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Figure 23: Non-Executive Directors’ shareholdings (audited)
The Non-Executive Directors are not permitted to participate in any of the Company’s
incentive arrangements. All Non-Executive Directors are required to build and maintain
a shareholding of at least 2,000 shares in the Company upon joining M&S. Details are
shown in the table below.
There were no changes in the current Non-Executive Directors’ interests in shares in the
Company and its subsidiaries between the end of the financial year and 20 May 2025.
Director
Number of shares held
as at 29 March and 20 May 2025
Archie Norman 148,600
Justin King 64,000
Tamara Ingram 2,000
Sapna Sood 2,000
Evelyn Bourke 50,000
Fiona Dawson 21,432
Ronan Dunne 25,000
Cheryl Potter 100,000
Figure 24: Non-Executive Directors’ agreements for service
Non-Executive Directors have an agreement for service for an initial three-year term
which can be terminated by either party giving three months’ notice (or six months’
notice for the Chairman).
The table below sets out these terms for all current members of the Board.
Director Date of appointment Notice period
Archie Norman 01/09/2017 6 months/6 months
Justin King 01/01/2019 3 months/3 months
Tamara Ingram 01/06/2020 3 months/3 months
Sapna Sood 01/06/2020 3 months/3 months
Evelyn Bourke 01/02/2021 3 months/3 months
Fiona Dawson 25/05/2021 3 months/3 months
Ronan Dunne 01/08/2022 3 months/3 months
Cheryl Potter 01/03/2023 3 months/3 months
Non-Executive Director changes to the Board during 2024/25
As announced on 28 May 2024, Andrew Fisher stepped down from the Board and his role
as Senior Independent Director and Chair of the Remuneration Committee on 2 July 2024.
Fiona Dawson became Chair of the Remuneration Committee with effect from 2 July 2024;
her fee increased from £78,909 to £98,909. With effect from 26 September 2024 Fiona
was appointed Senior Independent Director; her fee increased from £98,909 to £129,909
(£132,276 from 1 July 2025).
Remuneration Committee members
The Committee members during the year were Andrew Fisher (Committee Chair until
2July 2024), Fiona Dawson (Committee Chair from 2 July 2024), Archie Norman and
Tamara Ingram. The role and responsibilities of the Committee can be found on page 71.
Remuneration Committee advisers
In carrying out its responsibilities, the Committee is independently advised by external
advisers. The Committee was advised by PwC during the year. PwC is a founding member
of the Remuneration Consultants Group and voluntarily operates under the code of
conduct in relation to executive remuneration consulting in the UK. The code of conduct
can be found at remunerationconsultantsgroup.com.
The Committee has not explicitly considered the independence of the advice it receives,
although it regularly reﬂects on the quality and objectivity of this advice. The Committee
is satisfied that any conﬂicts are appropriately managed.
PwC was appointed by the Committee as its independent adviser in 2014, following a
rigorous and competitive tender process. PwC provides independent commentary on
matters under consideration by the Committee and updates on legislative requirements,
best practice and market practice. During the year, PwC charged £49,000 for Remuneration
Committee matters. This is based on an agreed fee for business-as-usual support, with
additional work charged at hourly rates. PwC’s advisory team has no connection with
any individual director of the Group.
The Committee also seeks internal support from the CEO, CFO, General Counsel &
Company Secretary, People Director, and the Head of Reward as necessary. All may
attend the Committee meetings by invitation but are not present for any discussions
that relate directly to their own remuneration.
Marks and Spencer Group plc Annual Report and Financial Statements 2025102
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT CONTINUED
Shareholder support for the Remuneration Policy and 2023/24
Directors’ Remuneration Report
At the Annual General Meeting on 2 July 2024, 95.26% of shareholders voted in favour
ofthe advisory resolution to approve the Directors’ Remuneration Report for 2023/24.
TheCommittee believes this illustrates the strong level of shareholder support for
thesenior remuneration framework. Figure 25 below shows full details of the voting
outcomes for the 2023/24 Directors’ Remuneration Report and Remuneration Policy
(voted on at the 2023 AGM).
Figure 25: Voting outcomes for the Remuneration Policy and 2023/24
Remuneration Report
Votes for % votes for Votes against % votes against Votes withheld
Remuneration
Policy (at the
2023 AGM) 1,286,748,793 97.74 29,785,038 2.26 261,392
2023/24
Remuneration
Report (at the
2024 AGM) 1,145,166,769 95.26 56,933,938 4.74 190,883
Approved by the Board
Fiona Dawson
Chair of the Remuneration Committee
20 May 2025
The Remuneration Policy and this Remuneration Report have been prepared in
accordance with the relevant provisions of the Companies Act 2006 and on the basis
prescribed in the Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 (the Regulations). Where required, data has
been audited by our external auditor, Deloitte, and this is indicated appropriately.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 103
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
OTHER DISCLOSURES
Directors’ Report
Marks and Spencer Group plc (the Company) is the holding company of the Marks and
Spencer Group of companies (the Group).
The Directors’ Report for the year ended 29 March 2025 comprises pages 60 to 109 and
pages 217 to 218 of this report, together with the sections of the Annual Report
incorporated by reference. As permitted by legislation, some of the matters required to
be included in the Directors’ Report have instead been included in the Strategic Report
on pages 3 to 59, as the Board considers them to be of strategic importance.
Specifically, these are:
•
Future business developments (throughout the Strategic Report).
•
Risk management on pages 52 to 53.
•
Information on how the directors have had regard for the Company’s stakeholders,
and the effect of that regard, on pages 9 to 11.
The Strategic Report and the Directors’ Report together form the Management Report
for the purposes of the Disclosure Guidance and Transparency Rules (DTR) 4.1.8R.
Information relating to financial instruments can be found on pages 162 to 174 and is
incorporated by reference.
For information on our approach to social, environmental and ethical matters, please
see our ESG Committee Report on pages 74 to 75, our ESG Review and TCFD Report
onpages 36 to 50, and our ESG Report available online at
corporate.marksandspencer.com/ESGreport2025.
Other information to be disclosed in the Directors’ Report is given in this section.
The Directors’ Report fulfils the requirements of the Corporate Governance Statement
for the purposes of DTR 7.2.3R. The Company’s full Corporate Governance Statement is
available online at corporate.marksandspencer.com/about-us/corporate-governance.
Both the Strategic Report and the Directors’ Report have been drawn up and presented
in accordance with, and in reliance upon, applicable English company law. The liabilities
of the directors in connection with those reports shall be subject to the limitations and
restrictions provided by such law.
Information to be disclosed under UKLR 6.6.1R
Listing Rule Detail Page reference
UKLR 6.6.1R (1) (2)
(4-10) (13)
Not applicable N/A
UKLR 6.6.1R (11)
(12)
Waiver of dividends Note 13
UKLR 6.6.1R (3) Long-term incentive schemes 85-86, 90-91, 94-97
Board of Directors
The membership of the Board and biographical details of the directors are provided on
pages 62 to 63. Changes to the directors during the year and up to the date of this
report are set out below.
Name Effective date of appointment/departure
Departures
Katie Bickerstaffe 2 July 2024
Andrew Fisher 2 July 2024
Appointments
Alison Dolan 6 January 2025
The appointment and replacement of directors is governed by the Company’s Articles
of Association (the Articles), the UK Corporate Governance Code, the Companies Act
2006 and related legislation. The Articles may be amended by a special resolution of
the shareholders. Subject to the Articles, the Companies Act 2006 and any directions
given by special resolution, the business of the Company will be managed by the Board
who may exercise all the powers of the Company.
The directors may from time to time appoint one or more directors. The Board may
appoint any person to be a director (so long as the total number of directors does not
exceed the limit prescribed in the Articles). Under the Articles, any such director shall
hold office only until the next Annual General Meeting (AGM) where they will stand for
annual election.
Details of directors’ beneficial and non-beneficial interests in the shares of the
Company are shown on pages 95 to 97 and 102. Options granted to directors under
theSave As You Earn (SAYE) and Executive Share Option Schemes are shown on page 97.
Further information regarding employee share option schemes is provided in note 13
tothe financial statements on pages 153 to 154.
The Company may, by ordinary resolution, declare dividends not exceeding the amount
recommended by the Board. Subject to the Companies Act 2006, the Board may pay
interim dividends and also any fixed rate dividend, whenever the financial position of
the Company, in the opinion of the Board, justifies its payment.
Marks and Spencer Group plc Annual Report and Financial Statements 2025104
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Numerical diversity data
Our gender identity and ethnicity data in accordance with UKLR 6.6.6R (10) as at
29March 2025 is set out below. Board and Executive Committee (ExCo) members are
asked to complete a diversity disclosure to confirm which of the categories set out
below they identify with.
Gender identity
Number of
Board
members
% of the
Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and
Chair)
Number
in Ex C o * % of ExCo *
Men 4 40 2 7 64
Women 6 60 2 4 36
Not specified/prefer not to say — — — — —
Ethnic background
Number of
Board
members
% of the
Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and
Chair)
Number
in Ex C o * % of ExCo *
White British or other White
(including minority-white groups) 9 90% 4 10 91%
Mixed/Multiple ethnic groups — — — 1 9%
Asian/Asian British 1 10% — — —
Black/African/Caribbean/Black
British — — — — —
Other ethnic group — — — — —
Not specified/prefer not to say — — — — —
* ExCo members are the ‘executive management’ of the Company.
Directors’ conflicts of interest
The Company has procedures in place for managing conflicts of interest. All directors
are required to avoid situations in which they have, or could have, a direct or indirect
interest that conflicts, or possibly may conflict, with the interests of the Company.
Should a director become aware that they, or any of their connected parties, have an
interest in an existing or proposed transaction with the Company or its subsidiaries,
they should notify the Board in writing or at the next Board meeting. Internal controls
are in place to ensure that any related party transactions involving directors, or their
connected parties, are conducted on an arm’s length basis. Directors have a continuing
duty to update any changes to these conflicts.
Directors’ indemnities
The Company maintains directors’ and officers’ liability insurance which provides
appropriate cover for legal action brought against its directors and officers. TheCompany
has also granted indemnities to each of its directors and the Company Secretary to the
extent permitted by law. Qualifying third-party indemnity provisions (as defined by
Section 234 of the Companies Act 2006) were in force during the year ended 29 March
2025. They remain in force in relation to certain losses and liabilities which the directors
(or Company Secretary) may incur to third parties in the course of acting as directors or
Company Secretary or employees of the Company or of any associated company.
Qualifying pension scheme indemnity provisions (as defined by Section 235 of the
Companies Act 2006) were in force during the course of the financial year ended 29
March 2025 for the benefit of the Trustees of the Marks & Spencer UK Pension Scheme,
both in the UK and the Republic of Ireland.
Profit and dividends
The profit for the financial year, after taxation, amounts to £291.9m (last year £425.2m).
The directors have declared dividends as follows:
Ordinary shares £m
Paid interim dividend of 1p per share
(last year interim dividend of 1p per share)
20.3
Proposed final dividend of 2.6p per share
(last year final dividend of 2p per share)
53.4
Total dividend of 3.6p per share for 2024/25
(last year total dividend of 3p per share)
73.7
Subject to shareholder approval at this year’s AGM, the final dividend will be paid on
4July 2025 to shareholders whose names were on the Register of Members at close of
business on 30 May 2025.
OTHER DISCLOSURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 105
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Directors’ Report continued
Share capital
The Company’s issued ordinary share capital as at 29 March 2025 comprised a single
class of ordinary share. Each share carries the right to one vote at general meetings
ofthe Company.
During the financial year, 14,844,347 ordinary shares in the Company were issued under
the terms of the Company’s SAYE Share Option Scheme. 13,469 shares were issued at a
price of 151p, 11,305,992 shares at a price of 82p, 3,351,623 shares at a price of 189p, 130,867
shares at a price of 99p, 42,377 shares at a price of 204p, and 19 shares at a price of 303p.
Details of movements in the Company’s issued share capital can be found in note 24 to
the financial statements on page 176.
Restrictions on transfer of securities
There are no specific restrictions on the transfer of securities in the Company, which
aregoverned by its Articles and prevailing legislation. The Company is not aware of any
agreements between holders of securities that may result in restrictions on the transfer
of securities or that might result in restrictions on voting rights.
Variation of rights
Subject to applicable statutes, rights attached to any class of share may be varied with
the written consent of the holders of at least three-quarters in nominal value of the
issued shares of that class, or by a special resolution passed at a separate general
meeting of the shareholders.
Rights and obligations attaching to shares
Subject to the provisions of the Companies Act 2006, any resolution passed by the Company
under the Companies Act 2006 and other shareholders’ rights, shares may be issued with
such rights and restrictions as the Company may by ordinary resolution decide, or (if there is
no such resolution or so far as it does not make specific provision) as the Board may decide.
Powers for the Company issuing or buying back its own shares
The Company was authorised by shareholders at the 2024 AGM to purchase in the
market up to 10% of its issued share capital, as permitted under the Company’s Articles.
No shares were bought back under this authority during the year ended 29 March 2025
and up to the date of this report. This standard authority is renewable annually; the
directors will seek to renew it at the 2025 AGM.
The directors were granted authority at the 2024 AGM to allot relevant securities up to a
nominal amount of £6,823,061.67. This authority will apply until the conclusion of the
2025 AGM. At this year’s AGM, shareholders will be asked to grant an authority to allot
relevant securities (i) up to a nominal amount of £6,853,821.93 and (ii) comprising equity
securities up to a nominal amount of £13,707,643.86 (after deducting from such limit any
relevant securities allotted under (i)), in connection with a pre-emptive offer (the Section
551 amount), such Section 551 amount to apply until the conclusion of the AGM to be
held in 2026 or on 1 October 2026, whichever is sooner.
At the 2024 AGM, two separate special resolutions were passed empowering the directors
to allot equity securities for cash without first offering them to existing shareholders in
proportion to their existing holdings. A special resolution will be proposed at the 2025
AGM to renew the directors’ powers – in line with the latest institutional shareholder
guidelines – to make non-pre-emptive issues for cash only and otherwise up to a nominal
amount of £2,056,146.57. In addition, a separate special resolution will be proposed to
authorise directors to make non-pre-emptive issues for cash in connection with acquisitions
or specified capital investments, up to a further nominal amount of £2,056,146.57. In
both cases an additional follow-on offer, up to a nominal amount equal to 20% of any
allotment made under either special resolution, can be made to existing holders of
securities not allocated shares under the allotment, as envisaged by paragraph 3 of
Section 2B of the Statement of Principles on Disapplying Pre-Emption Rights issued by
the Pre-Emption Group in November 2022.
A special resolution will also be proposed to renew the directors’ authority to repurchase
the Company’s ordinary shares in the market. The authority will be limited to a maximum
of 205,614,657 ordinary shares and sets the minimum and maximum prices which would
be paid.
Deadlines for exercising voting rights
Votes are exercisable at a general meeting of the Company in respect of which the
business being voted upon is being heard. Votes may be exercised in person, by proxy
or, in relation to corporate members, by corporate representatives. The Articles provide
a deadline for submission of proxy forms of not less than 48 hours before the time
appointed for the holding of the meeting or adjourned meeting. However, when calculating
the 48-hour period, the directors can, and have, decided not to take account of any part
of a day that is not a working day.
Significant agreements – change of control
There are a number of agreements to which the Company is party that take effect, alter
or terminate upon a change of control of the Company following a takeover bid. Details
of the significant agreements of this kind are as follows:
•
The $300m US Notes issued by the Company to various institutions on 6 December 2007
under Section 144a of the US Securities Act contain an option such that, upon a change
of control event, combined with a credit ratings downgrade, any holder of such a US
Note may require the Company to prepay the principal amount of that USNote.
•
The £250m Medium-Term Notes (MTN) issued by the Company’s wholly owned subsidiary,
Marks and Spencer plc (M&S plc), on 10 July 2019, the £300m MTN (current outstanding
£109.4m) issued by M&S plc on 19 November 2020, and the £400m MTN (current
outstanding £105.5m) issued by M&S plc on 12 December 2012 to various institutions
under the Group’s £3bn Euro Medium-Term Note programme contain an option such
that, upon a change of control event, combined with a credit ratings downgrade to
below sub-investment level, any holder of an MTN may require M&S plc to prepay
theprincipal amount of that MTN.
OTHER DISCLOSURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025106
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
•
The £850m Credit Agreement dated 13 December 2021 between M&S plc and various
banks contains a provision such that, upon a change of control event, unless new
terms are agreed within 60 days, the facility under this agreement will be cancelled
with all outstanding amounts becoming immediately payable with interest.
The Company does not have agreements with any director or employee that would
provide compensation for loss of office or employment resulting from a takeover
except that provisions of the Company’s share schemes and plans may cause options
and awards granted to employees under such schemes and plans to vest on a takeover.
Interests in voting rights
Information provided to the Company pursuant to the Financial Conduct Authority’s
DTRs is published on a Regulatory Information Service and on the Company’s website.
As at 29 March 2025, and the date of this report, the following information has been
received, in accordance with DTR 5, from holders of notifiable interests in the Company’s
issued share capital.
The information provided below was correct at the date of notification; however, the
date it was received may not have been within the current financial year. It should be
noted that these holdings are likely to have changed since the Company was notified.
However, notification of any change is not required until the next notifiable threshold
iscrossed.
Notifiable interests % of capital disclosed Date notified
BlackRock, Inc 6.22 26 November 2024
Ameriprise Financial, Inc 4.978 7 March 2024
RWC Asset Management LLP 4.937 12 February 2024
Schroders plc 4.760152 20 September 2023
Branches
In accordance with the Companies Act 2006 and the DTRs, the Group discloses below
the subsidiary companies that have branches outside the UK:
Marks and Spencer plc: Isle of Man.
Marks and Spencer (Shanghai) Limited: Dongguan.
Colleague involvement
We remain committed to colleague involvement and engagement throughout the
business. Examples of this, and information on our approach to our workforce, are
highlighted throughout this Annual Report and specifically on pages 8 to 9, 32 to 35, 69
to 70 and 87 to 88.
Share schemes are a long-established and successful part of colleagues’ total reward
packages, encouraging and supporting employee share ownership. The Company operates
both an all-employee SAYE Scheme and a Share Incentive Plan. As at 29 March 2025,
14,817 colleagues were participating in the Company’s SAYE Scheme. Full details of all
schemes are given on pages 153 to 154.
There are websites for both pension schemes – the defined contribution scheme (Your
M&S UK Pension Saving Plan) and the defined benefit scheme (the Marks & Spencer UK
Pension Scheme) – which are fully accessible to colleagues and former colleagues who
have retained benefits in either scheme. Colleagues are updated as needed with any
pertinent information on their pension savings.
Equal opportunities
A more diverse, equitable and inclusive M&S is a critical enabler of the higher-performance
customer-centric culture that we’re aiming for. Creating an environment where everyone
can thrive and contribute to the success of M&S is the aim of our diversity, equity and
inclusion strategy.
Providing a safe space for colleagues is a fundamental principle, with respect for each
other being the foundation of how we do business. We are clear that any forms of
discrimination, harassment, bullying and victimisation are not tolerated, with processes
in place to ensure any allegations are handled effectively.
Being as close to our colleagues as possible is essential and we have eight colleague
inclusion networks, with over 11,000 members combined. These help to amplify the
voice of our colleagues and identify opportunities to ensure we’re designing and
delivering with all our colleagues in mind.
Plans to improve the representation and experience of female colleagues and colleagues
from ethnic minority backgrounds continued; however there is still much more to do.
We’ve continued to make strong progress against our ambition of being a leading employer
for women with over 50% of store management teams being women, over 50% of our
senior leaders being women and over 70% of colleagues on our future leader programmes
being women. We launched EMERGE, a development programme specifically for
colleagues from ethnic minority backgrounds. 40 colleagues across two cohorts have
already completed the programme and 80% reported feeling more motivated to
contribute to the success of M&S. We also achieved our most diverse ‘future leader’
cohorts with 30% being from ethnic minority backgrounds.
We’ve established clear KPIs and developed targeted business area plans which are
helping to drive local ownership and shared accountability. Cyclical reviews of our KPI
performance enabled us to take action which led to more diverse shortlists and more
diverse offers, whilst also identifying key areas of opportunities in our internal promotions
and in colleague turnover. We’ve committed to achieving our 12% target for ethnic minority
representation in senior leader roles by 2027, and 20% representation by 2030. More
information on our ethnic minority targets and how this relates to the Parker Review
recommendation can be found in our Nomination Committee Report on page 73.
More information on our inclusion and diversity initiatives can be found on pages 34, 35
and 73.
OTHER DISCLOSURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 107
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Directors’ Report continued
Employees with disabilities
The Company is clear in its commitment to support colleagues and candidates with
both visible and non-visible accessibility challenges and health conditions. We have
continued to demonstrate our commitment to interviewing those applicants with
disabilities who fulfil the minimum criteria and continue to provide workplace
opportunities through our innovative Marks and Start scheme, working closely with
TheKing’s Trust and Jobcentre Plus.
We have taken steps to support the launch of our long-term accessibility strategy to
better support colleagues and line managers, partnering with The Business Disability
Forum for specialist advice. Launching and embedding this strategy is a key priority in
our 2025 plans.
Research and development
Research and innovation remain key to our Food and Fashion, Home & Beauty offers,
enabling the development of better products. Further information is available on our
corporate website, corporate.marksandspencer.com, and in our ESG Report 2025.
Groceries Supply Code of Practice
The Groceries (Supply Chain Practices) Market Investigation Order 2009 (the Order) and
The Groceries Supply Code of Practice (the Code) impose obligations on M&S regarding
its relationships with its suppliers of groceries. Under the Order and Code, M&S is
required to submit an annual compliance report to the Audit & Risk Committee for
approval and then to the Competition and Markets Authority and Groceries Code
Adjudicator (GCA).
M&S submitted its report, covering the period from 31 March 2024 to 29 March 2025,
tothe Audit & Risk Committee on 8 May 2025. It was approved on 15 May 2025.
In accordance with the Order, a summary of that compliance report is set out below.
M&S believes that it has materially complied with the Code and the Order during the
relevant period. No formal disputes under the Code have arisen during the reporting
period. There have been nine instances during the reporting period in which suppliers
have either alleged a breach or made a reference to potential non-compliance with the
Code. M&S has worked with the suppliers to address the issues raised and all of them
have been resolved or closed, with no issues remaining open.
A detailed summary of the compliance report is available on our website:
corporate.marksandspencer.com.
Anti-bribery and corruption
Our Anti-Bribery & Corruption (ABC) Policy outlines the expected standards of conduct
that colleagues, contractors, suppliers, business partners and any other third parties
who act for or on behalf of M&S are obliged to follow.
Our programme includes detailed procedures and controls around giving and receiving
gifts, hospitality and entertainment; procedures for engaging new suppliers and partners,
specifically those who are based in higher-risk jurisdictions; standard contract clauses;
and clear reporting channels, including confidential reporting.
All colleagues are required to undertake mandatory ABC e-learning. The Company will
consider taking disciplinary action against anyone who fails to comply with its ABC
Policy, up to and including dismissal. Any potential incidents reported internally, or to
the external confidential reporting channels, are followed up and full investigations
launched where such action is deemed appropriate after preliminary enquiries.
Allinvestigations are subsequently reported to the Audit & Risk Committee. Bribery Risk
Assessments are conducted on an annual basis with outcomes reported to the Audit &
Risk Committee.
Political donations
The Company did not make any political donations or incur any political expenditure
during the year ended 29 March 2025. M&S has a policy of not making donations to
political organisations or independent election candidates or incurring political
expenditure anywhere in the world as defined in the Political Parties, Elections and
Referendums Act 2000.
Going concern
In adopting the going concern basis for preparing the financial statements, the
directors have considered the business activities as set out on pages 12 to 21, the
financial position of the Group, its cash flows, liquidity position and borrowing facilities
as set out in the Financial Review on pages 23 to 31, the Group’s financial risk management
objectives and exposures to liquidity and financial risks as set out in note 21 to the
financial statements, as well as the Group’s principal risks and uncertainties as set out
on pages 54 to 58.
Based on the Group’s cash flow forecasts, the Board expects the Group to have
adequate resources to continue in operation, meet its liabilities as they fall due, retain
sufficient available cash and not breach the covenant under its revolving credit facility
for the foreseeable future, being a period of at least 12 months from the approval of the
financial statements. The Board therefore considers it appropriate for the Group to
adopt the going concern basis in preparing its financial statements.
See note 20 to the financial statements for more information on our facilities.
Long-term viability statement
The directors have assessed the prospects of the Company over a three-year period to
March 2028. This has taken into account the business model, strategic aims, risk appetite,
and principal risks and uncertainties, along with the Company’s current financial position.
Based on this assessment, the directors have a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities as they fall due over the
three-year period under review.
See our approach to assessing long-term viability on page 59.
OTHER DISCLOSURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025108
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Auditor
Resolutions to reappoint Deloitte LLP as auditor of the Company and to authorise the
Audit & Risk Committee to determine its remuneration will be proposed at the 2025 AGM.
Annual General Meeting
The AGM of Marks and Spencer Group plc will be a digitally-enabled meeting, broadcast
from M&S’ Waterside House Support Centre on 1 July 2025 at 11am. Shareholders are
invited to engage with the AGM electronically via our dedicated Lumi AGM website:
https://meetings.lumiconnect.com/100-898-832-080. If a shareholder wishes to
attend the AGM in person as part of our studio audience, they are requested to register
their intention to do so in advance, to help manage capacity on the day. The Notice of
Meeting is given, together with explanatory notes and guidance on how to join the
meeting and vote, on pages 200 to 216.
Directors’ responsibilities
The Board is of the view that the Annual Report should be truly representative of the
year and provide shareholders with the information necessary to assess the Group’s
position, performance, business model and strategy.
The Board requested that the Audit & Risk Committee review the Annual Report and
provide its opinion on whether the report is fair, balanced and understandable. The
Audit & Risk Committee’s opinion is on page 80.
The directors are also responsible for preparing the Annual Report, the Remuneration
Report and Policy and the financial statements in accordance with applicable law and
regulations. Company law requires the directors to prepare financial statements for
each financial year. Under that law the directors are required to prepare the Group financial
statements in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial Reporting
Standards (IFRS) as adopted by the UK. Under company law, the directors must not
approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of the profit or loss of the
Group and the Company for that period.
In preparing these financial statements, the directors are required to:
•
Select suitable accounting policies and then apply them consistently.
•
Make judgements and accounting estimates that are reasonable and prudent.
•
State whether applicable IFRS (as adopted by the UK) have been followed, subject to
any material departures disclosed and explained in the financial statements.
•
Prepare the financial statements on a going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company and enable them to ensure
the financial statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Each of the current directors, whose names and functions are listed on pages 62 and 63,
confirms that, to the best of their knowledge:
•
The Group financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole.
•
The Management Report includes a fair review of the development and performance
of the business and the position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face.
•
The Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the necessary information for shareholders to assess the Group’s position,
performance, business model and strategy.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors’ Report is
approved confirms that, so far as they are aware, there is no relevant audit information
of which the Company’s auditor is unaware and that they have taken all the steps that
they ought to have taken as a director to make themselves aware of any relevant audit
information and to establish that the Company’s auditor is aware of that information.
The Directors’ Report was approved by a duly authorised Committee of the Board of
Directors on 20 May 2025 and signed on its behalf by:
Nick Folland
General Counsel & Company Secretary
London, 20 May 2025
OTHER DISCLOSURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 109
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF MARKS AND SPENCER GROUP PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
•
the financial statements of Marks and Spencer Group plc (the ‘Parent Company’)
and its subsidiaries (the ‘Group’) give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 29 March 2025 and of the
Group’s profit for the 52 weeks then ended;
•
the Group financial statements have been properly prepared in accordance with
United Kingdom adopted international accounting standards;
•
the Parent Company financial statements have been properly prepared in
accordance with United Kingdom adopted international accounting standards
and as applied in accordance with the provisions of the Companies Act 2006; and
•
the financial statements have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements which comprise:
•
the Consolidated Income Statement;
•
the Consolidated Statement of Comprehensive Income;
•
the Consolidated and Parent Company Statements of Financial Position;
•
the Consolidated and Parent Company Statements of Changes in Equity;
•
the Consolidated and Parent Company Statements of Cash Flows; and
•
the related notes 1 to 32 to the Group Financial Statements and C1 to C7 to the Parent
Company Financial Statements.
The financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom adopted international accounting standards and, as
regards the Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(ISAs (UK)) and applicable law. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the financial statements
section of our report.
We are independent of the Group and the Parent Company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in the UK,
including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services provided to the Group and
Parent Company for the year are disclosed in note 4 to the financial statements.
Weconfirm that we have not provided any non-audit services prohibited by the FRC’s
Ethical Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
3. Summary of our audit approach
Key audit
matters
The key audit matters that we identified in the current year were:
•
accounting for the Store Estate Programme;
•
disclosure of adjusting items as part of alternative performance
measures; and
•
valuation of the Group’s interest in Ocado Retail Limited.
Materiality The materiality that we used for the Group financial statements
was £37.0m (2024: £34.0m) which was determined based on profit
before tax and adjusting items.
In the prior period we considered a number of different metrics
including profit before tax, profit before tax and adjusting items,
earnings before interest, tax and amortisation (“EBITDA”), and
revenue. Following the stabilisation of profitability and in line with
industry practice, we considered profit before tax and adjusting
items the most appropriate benchmark in determining materiality.
Scoping Balances subject to audit of the entire financial information
represent 92% (2024: 92%) of Group revenue, 96% (2024: 97%) of profit
before tax and adjusting items, 96% (2024: 98%) of profit before tax,
72% (2024: 72%) of total assets and 79% (2024: 79%) of total liabilities.
Significant
changes in
our approach
As a result of the impact on our audit strategy and allocation of
resources, we have identified the valuation of the Group’s interest
in ORL, and the resulting impairment of the Group’s investment, as
a key audit matter in the current period. This is due to the inherent
complexity and high degree of management judgement and
estimation uncertainty that exists in respect of the underlying cash
flows driving the valuation.
As there has been little change in respect of the facts and
circumstances related to the fair value of Ocado contingent
consideration since the prior period, we no longer identify this as a
key audit matter. In addition, as a result of reduction in risk of
impairment and impairment reversal of UK store assets, we no
longer identify this as a key audit matter.
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Report on the audit of the financial statements continued
4. Conclusions relating to Going Concern
In auditing the financial statements, we have concluded that the directors’ use of
thegoing concern basis of accounting in the preparation of the financial statements
isappropriate.
Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability
to continue to adopt the going concern basis of accounting included:
•
obtaining an understanding of relevant controls relating to the assessment of going
concern models, including the review of the inputs and assumptions used in those
models;
•
obtaining management’s board-approved three-year cash flow forecasts and
covenant compliance forecasts, including sensitivity analysis;
•
assessing the appropriateness of forecast assumptions by:
–
reading analyst reports, industry data and other external information and
comparing these with management’s estimates;
–
comparing forecast sales with recent historical financial information to consider
accuracy of forecasting;
–
testing the underlying data generated to prepare the forecast scenarios and to
determine whether there was adequate support for the assumptions underlying
theforecast;
–
reviewing correspondence relating to the availability of the Group’s financing
arrangements;
–
assessing the impact of macro-economic conditions on the business;
–
considering the results of the sensitivity analyses performed;
–
challenging management’s assessment of the cash flow impact of the cyber
incident post year end, and any potential future impact upon management’s
trading forecasts; and
•
evaluating the appropriateness of the Group’s disclosures on going concern in the
financial statements.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s and Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’
statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going
concern are described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on
the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
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Report on the audit of the financial statements continued
5. Key audit matters continued
5.1. Accounting for the Store Estate Programme
Key audit
matter
description
In February 2018, the Board approved a list of stores marked for
closure as part of its Store Estate Programme. The total charge
recognised in connection with this closure programme in previous
periods was £963 million. A further net charge of £84 million has
been recognised in adjusting items in the current period due to:
•
new stores being assessed as probable for closure and the
update of estimates made considering known developments in
the exit strategy, including current trading performance,
negotiations with landlords and changes in the retail property
market;
•
strip out and dilapidation costs, as management update their
assessment of costs associated with restoring stores to their
original condition prior to disposal; and
•
accelerated depreciation and impairment of buildings and
fixtures and fittings in respect of additional stores added to the
programme.
Further information is set out in notes 1, where this matter is also
disclosed as a key source of estimation uncertainty, 5 and 15 to
the financial statements.
Our key audit matter was focused on the specific assumptions
applied in the discounted cash flow analysis prepared by the
entity including the discount rate, expected sublet income, sublet
lease incentives, void periods, freehold sales proceeds, leasehold
surrender costs, store closure costs and dilapidations costs.
The Audit & Risk Committee considers this to be a significant
matter. This is a significant matter considered by the Audit & Risk
Committee on page 79.
How the scope
of ouraudit
responded to
the key audit
matter
In responding to the identified key audit matter, we completed
the following audit procedures:
•
obtained an understanding of relevant controls relating to the
review and approval of the Group’s Store Estate Programme
model;
•
performed enquiries of the Board and inspected the latest
strategic plans, Board and relevant sub-committee minutes of
meetings;
•
with the involvement of our real estate specialists, we evaluated
the appropriateness of the entity’s judgements for a
representative sample of properties and benchmarked with
reference to external data;
•
assessed the mechanical accuracy of discounted cash flow
models and other key provision calculations;
•
assessed the reasonableness of key inputs to the discounted
cash flow models including the discount rate, store closure
costs, freehold sales proceeds, leasehold surrender costs,
expected sublet income, sublet lease incentives, void periods,
and dilapidations costs with reference to available evidence;
•
recalculated the closing provision for a representative sample
of stores;
•
evaluated the accuracy and completeness of provisions
recorded considering the status of the Group’s Store Estate
plan; and
•
assessed the completeness and accuracy of disclosures within
the financial statements in accordance with IFRS.
Key
observations
We are satisfied that the Group’s estimate of the store exit charges,
and the associated disclosures are appropriate.
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5. Key audit matters continued
5.2. Disclosure of adjusting items as part of alternative performance measures
Key audit
matter
description
The Group has presented an alternative performance measure
being profit before tax and adjusting items of £875.5 million
(2024: £716.4 million), which is derived from profit before tax of
£511.8 million (2024: profit before tax of £672.5 million) adjusted
for a number of items totalling £363.7 million (2024: £43.9 million)
which the Group considers meet their definition of an ‘adjusting
item’. Judgement is exercised by the entity in determining the
classification of such items in accordance with guidance issued by
the FRC and ESMA. We consider there to be a risk of fraud in the
reporting of adjusting items within the alternative performance
measures.
In determining profit before tax and adjusting items, we identified
the following risks:
•
the identification and classification of items as ‘adjusting’ as
part of the presentation of alternative performance measures
may be inappropriate, distorting the reported results;
•
the omission of items which are considered material, one-off or
significant in nature, distorting the alternative performance
measures; and
•
the clarity and detail of disclosures in respect of adjusting
items as part of alternative performance measures may be
insufficient, preventing investors from obtaining a clear
understanding of the Group’s results and performance.
The Group’s policy regarding adjusting items is set out in note 1,
where this is also highlighted as a critical accounting judgement.
This is a significant matter considered by the Audit & Risk
Committee on page 79.
How the scope
of our audit
responded to
the key audit
matter
In responding to the identified key audit matter, we completed
the following audit procedures:
•
obtained an understanding of relevant controls, relating to the
identification and disclosure of adjusting items within
alternative performance measures;
•
evaluated the rationale applied in identifying items as adjusting
and completed an independent assessment as to the selection
and presentation of adjusting items based on their nature;
•
assessed the identification and consistency of items reported
as adjusting period on period, with reference to guidance
published by ESMA and the FRC;
•
tested a sample of adjusting items through agreement to
supporting evidence;
•
benchmarked certain adjusting items identified by the entity
with comparable companies;
•
use of our cumulative audit knowledge to identify other
transactions outside of the normal course of business, or which
display characteristics of being material, significant or one-off
in nature;
•
considered the impact of the classification of programmes as
adjusting items, as this affects the KPIs used in directors’
remuneration targets and could result in management bias; and
•
assessed the completeness and accuracy of disclosures within
the financial statements in accordance with IFRS.
Key
observations
The value of adjusting items results in a material difference
between the statutory and adjusted results. We are satisfied the
adjusting items in their classification and presentation is
consistent with the Group’s policy and the amounts are
appropriate.
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5. Key audit matters continued
5.3. Valuation of the Group’s interest in Ocado Retail Limited
Key audit
matter
description
As at 29 March 2025 the Group held a 50% interest in Ocado Retail
Limited (ORL). The remaining 50% interest is held by Ocado Group
Plc (Ocado Group). Ocado Retail is treated as an associate and the
Group applies the equity method of accounting in accordance
with IAS 28 Investments in associates and joint ventures.
At the reporting date the carrying value of the investment is
£385m following the recognition of a £249m impairment charge
in adjusting items.
Under IAS 28, the Group is required to assess the value of its
investment at each reporting date; specifically considering
whether objective evidence of impairment exists.
The Group has estimated the recoverable amount of its
investment, with the assistance of independent professional
valuers, derived from a discounted cash flow based on the
five-year plan prepared by ORL management. The valuation of
the investment is dependent on estimates of future trading
performance for which a degree of estimation uncertainty exists.
The key assumptions applied by management in relation to the
cash flows used in the impairment review are:
•
revenue;
•
fulfilment and delivery costs, and
•
discount rate.
Further details on the Group’s accounting policy and the
impairment of the investment in Ocado Retail are included in
Note 5 and 29.
This is a significant matter considered by the Audit & Risk
Committee on page 80.
How the scope
of our audit
responded to
the key audit
matter
In responding to the identified key audit matter, we completed
the following audit procedures:
•
obtained an understanding of the relevant controls over the
valuation of the ORL business, including those relevant to the
judgement applied by management in the impairment review;
•
obtained an understanding of the basis of preparation of the
cash flow forecasts used in the valuation of the ORL business,
including the associated governance process for their
compilation and approval, and the sensitivities applied by
Group management;
•
tested and challenged the key assumptions in the cash flow
forecasts including revenue; fulfilment and delivery cost; and
the discount rate, with reference to historical performance and
external benchmarking data (where applicable);
•
performing sensitivity analyses to assess the impact on
impairment of a change in the key assumptions applied to the
cash flow scenarios;
•
assessed the appropriateness of the methodology applied to
the valuation and impairment assessment in accordance with
IAS 28 and IAS 36;
•
assessed the competence, capabilities and objectivity of the
Group’s Independent professional valuers;
•
engaged our valuation experts to assess the appropriateness of
the valuation methodology and key valuation assumptions,
including the discount rate applied, and to assess the
mechanical accuracy of the model; and
•
assessed the completeness and accuracy of disclosures within
the financial statements in accordance with IFRS.
Key
observations
We are satisfied that the valuation of the ORL business, resulting
impairment charge and the associated disclosure, are reasonable.
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6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that
makes it probable that the economic decisions of a reasonably knowledgeable person
would be changed or influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial
statements as a whole as follows:
Group financial statements Parent Company financial statements
Materiality £37.0 million (2024:
£34.0million)
£33.3 million (2024:
£30.6million)
Basis for
determining
materiality
Using professional
judgement, we determined
materiality to be £37.0m
based on 4.23% of profit
before tax and adjusting
items. (2024: 4.75%). The
increase in materiality
primarily reflects the
year-on-year increase in the
profitability of the Group.
We have used 3% of net assets
in both the current and the
prior period, capped at 90% of
Group materiality, as the basis
for materiality.
Rationale for the
benchmark
applied
As a listed business, profit
before tax is typically the
most appropriate benchmark
to determine materiality,
being the primary measure
of performance for key
stakeholders and is used by
investors and other readers
of the financial statements.
In the prior period we
considered a number of
different metrics including
profit before tax, profit
before tax and adjusting
items, earnings before
interest, tax and amortisation
(“EBITDA”), and revenue.
Following the stabilisation of
profitability, we considered
profit before tax and
adjusting items the most
appropriate benchmark in
determining materiality.
Net assets are used as the
benchmark as the Parent
Company operates primarily
as a holding company for the
Group and we therefore
consider this as the key metric
for the Parent Company.
We capped materiality at 90%
of Group materiality to
reduce the risk of a material
error arising as a result of the
consolidation of the Parent
Company’s result in the
Group financial statements.
Adjusted profit
before tax
£875.5m
Group Materiality
£37m
Component Performance
Materiality Range £20m to
£24m
Audit Committee
Reporting Threshold
£1.9m
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6. Our application of materiality continued
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the
probability that, in aggregate, uncorrected and undetected misstatements exceed the
materiality for the financial statements as a whole.
Group financial statements Parent Company financial statements
Performance
materiality
65% (2024: 65%) of Group
materiality
65% (2024: 65%) of Parent
Company materiality
Basis and
rationale for
determining
performance
materiality
In determining performance materiality, we considered the
following factors:
•
our cumulative knowledge of the Group and its environment,
including industry specific trends;
•
reliability on internal control over financial reporting;
•
the stability in key management personnel;
•
the centralisation in the Group’s financial reporting controls
and processes; and
•
the low level of misstatements identified in prior periods, both
corrected and uncorrected.
6.3. Error reporting threshold
We agreed with the Audit & Risk Committee that we would report to the Committee all
audit differences in excess of £1.9 million (2024: £1.7 million), as well as differences below
that threshold that, in our view, warranted reporting on qualitative grounds. We also
report to the Audit & Risk Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our audit was scoped by obtaining an understanding of the Group and its environment, including
Group-wide controls, and assessing the risks of material misstatement at the Group level.
Based on our assessment we have focused our audit on the UK and India businesses
which were subject to an audit of the entire financial information and specified audit
procedures respectively. We have performed our audit of the UK component using a
performance materiality of £21.6 million (or 90% of Group performance materiality)
(2024: £19.9 million), and our specified audit procedures in India using a component
performance materiality of £5.0 million (2024: £5.0 million).
The Group holds 50% of the ordinary shares of Ocado Retail Limited (ORL). This interest is
accounted for as an investment in associate in accordance with IAS 28 on the basis that the
shareholders’ agreement gives control over ORL to Ocado Group plc. In the current period
the Group recorded a share of loss of associate from ORL of £43.6 million (2024: £79.9 million)
and was subject to specified audit procedures.
At a Group level, we tested the consolidation and performed reviews at group level on
the remaining aggregated financial information not subject to audit.
Audit of the entire
fin ancial information 92%
Specified audit
procedures 1%
Review at group level 7%
Audit of the entire
fin ancial information 96%
Specified audit
procedures 1%
Review at group level 3%
Audit of the entire
fin ancial information 79%
Specified audit
procedures 0%
Review at group level 21%
Audit of the entire
fin ancial information 96%
Specified audit
procedures 1%
Review at group level 3%
Audit of the entire
fin ancial information 72%
Specified audit
procedures 0%
Review at group level 28%
Revenue
Profit before tax
Total liabilities
Adjusted profit before tax
Total assets
7.2. Our consideration of the control environment
Our audit strategy is to rely on controls over certain processes within a number of UK
business cycles. As part of our controls testing, we obtained an understanding of the
Group’s processes and tested controls through a combination of tests of inquiry,
observation, inspection, and re-performance.
In addition to the above, we also obtained an understanding of certain controls relating
to key audit areas including those noted in section 5, and inventory provisions, going
concern, pensions, store impairment, and financial reporting processes.
Given the importance of information technology (“IT”) to the recording of financial
information and transactions, we have tested General IT controls relating to certain of the
Group’s IT systems where relevant to our audit work. We have been able to place IT
controls reliance across these systems to support the audit of procurement, sales to cash
and fixed assets business cycles.
All control deficiencies and control improvements have been reported to management
and the Audit and Risk Committee. The Group continues to invest in responding and
addressing our observations.
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7. An overview of the scope of our audit continued
7.2. Our consideration of the control environment continued
In response to a cyber incident, which occurred post year-end, the Group has set out its
consideration of the systems of internal control during FY25 in the Audit & Risk
Committee’s statement at page 76.
We have held discussions with the Group’s IT, legal and finance teams, together with
management’s cyber experts, and performed procedures with the assistance of our IT
specialists, to understand the cause and timing of the cyber incident, which formed the
basis of our challenge of whether this was a post year-end event. We also discussed the
impact of the cyber incident and considered management’s assessment regarding the
availability and integrity of key information and data used in the financial reporting.
7.3. Our consideration of climate-related risks
The Group continues to reassess the potential impacts of climate change and set
targets which the directors consider to be aligned with the Paris Agreement. During the
year the group submitted new short and long-term targets for both scope 1 and 3 to
Science Based Target Initiatives (SBTi) under their new Forest, Land and Agriculture
(FLAG) guidance. These were approved by SBTi as set out in the Task Force on Climate-
Related Financial Disclosures (‘TCFD’) disclosures pages 38-50.
The Group considers that the most likely impact on the financial statements will be in
relation to its three-year cash flow forecasts and has included the impact within these
forecasts where appropriate. Whilst at this stage there is significant uncertainty
regarding what the long-term impact of climate change initiatives may be, the forecasts
reflect the entity’s best estimate of the impact on the financial statements as explained
in note 1.
As part of our audit procedures, we have obtained the entity’s climate-related risk
assessment and held discussions with management to understand the process of
identifying climate-related risks, the determination of mitigating actions and the
impact on the Group’s financial statements. We performed our own qualitative risk
assessment of the potential impact of climate change on the Group’s account balances
and classes of transaction and did not identify any reasonable possible risks of material
misstatement. Our procedures were performed with the involvement of our climate-
change specialists and included reading disclosures included in the Strategic Report to
consider whether they are materially consistent with the financial statements and our
knowledge obtained in the audit.
In considering the disclosures presented as part of the Strategic Report, we engaged
our climate-change specialists to assess compliance with the TCFD and CFD
requirements, and the recommendations made by both the Task Force and FRC as set
out in their thematic reviews. We have also assessed whether these disclosures reflect
our understanding of the Group’s approach to climate.
We did not identify climate-related risk as a separate key audit matter in our audit given
the nature of the Group’s operations and knowledge gained of its impact on critical
accounting estimates and judgements during our risk assessment procedures and audit
procedures.
7.4. Working with other auditors
We have two component audit teams: Deloitte UK and Deloitte India. We have issued
detailed instructions to both component audit teams to perform audit procedures. Due
to the non-co-terminus year-end of ORL, we have performed a review of the component
auditor’s files for the period ended 1 December 2024 and the reporting received from
the component auditor for the period subsequent to 1 December 2024.
We have engaged regularly with the component auditors throughout the audit process,
determining the nature, timing, and extent of the audit procedures (involved in risk
assessment of the components, in particular significant and higher risk areas) to be
performed and to review their component reporting.
8. Other information
The other information comprises the information included in the annual report, other
than the financial statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements, or our
knowledge obtained in the course of the audit, or otherwise appears to be materially
misstated.
If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are
responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the
Group’s and the Parent Company’s ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is
located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined above, to
detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed
below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, we considered the following:
•
the nature of the industry and sector, control environment and business performance
including the design of the Group’s remuneration policies, key drivers for directors’
remuneration, bonus levels and performance targets;
•
the Group’s own assessment of the risks that irregularities may occur either as a result
of fraud or error that was approved by the board;
•
results of our enquiries of management, the directors, internal audit and the Audit &
Risk Committee about their own identification and assessment of the risks of
irregularities, including those that are specific to the Group’s sector;
•
any matters we identified having obtained and reviewed the Group’s documentation
of their policies and procedures relating to:
–
identifying, evaluating and complying with laws and regulations and whether they
were aware of any instances of non-compliance;
–
detecting and responding to the risks of fraud and whether they have knowledge of
any actual, suspected or alleged fraud;
–
the internal controls established to mitigate risks of fraud or non-compliance with
laws and regulations;
–
the post year-end cyber incident (page 182 of Annual Report); and
•
the matters discussed among the audit engagement team and relevant internal
specialists, including tax, valuations, pensions, IT, climate-change and analytics
specialists regarding how and where fraud might occur in the financial statements
and any potential indicators of fraud.
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11. Extent to which the audit was considered capable of detecting
irregularities, including fraud continued
As a result of these procedures, we considered the opportunities and incentives that
may exist within the organisation for fraud and identified the greatest potential for
fraud in the disclosure of adjusting items as part of alternative performance measures.
In common with all audits under ISAs (UK), we are also required to perform specific
procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the
Group operates in, focusing on provisions of those laws and regulations that had a
direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the UK
Companies Act, Financial Conduct Authority regulations, UK Listing Rules, pensions
and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a
direct effect on the financial statements but compliance with which may be
fundamental to the Group’s ability to operate or to avoid a material penalty. These
included the competition and anti-bribery laws, data protection, Groceries Supply Code
of Practice, and employment, environmental and health and safety regulations.
11.2. Audit response to risks identified
As a result of performing the above, we identified the disclosure of adjusting items as
part of alternative performance measures as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report explains the matter in more detail
and describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the
following:
•
reviewing the financial statement disclosures and testing to supporting
documentation to assess compliance with provisions of relevant laws and regulations
described as having a direct effect on the financial statements;
•
enquiring of management, the Audit & Risk Committee and in-house legal counsel
concerning actual and potential litigation and claims;
•
performing analytical procedures to identify any unusual or unexpected relationships
that may indicate risks of material misstatement due to fraud;
•
reading minutes of meetings of those charged with governance, reviewing internal
audit reports, and reviewing correspondence with HMRC;
•
assessing the Board’s response to the cyber incident (set out in section 7.2); and
•
in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the
judgements made in making accounting estimates are indicative of a potential bias;
and evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud
risks to all engagement team members including internal specialists and component
audit teams and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 119
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has
been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the
financial year for which the financial statements are prepared is consistent with
the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit, we have not
identified any material misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate Governance Statement
relating to the Group’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of
the following elements of the Corporate Governance Statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
•
the directors’ statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified set
out on page 108;
•
the directors’ explanation as to its assessment of the Group’s prospects, the period
this assessment covers and why the period is appropriate set out on page108;
•
the directors’ statement on fair, balanced and understandable set out on page 80;
•
the board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 52;
•
the section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 81; and
•
the section describing the work of the Audit & Risk Committee set out on page76.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
we have not received all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain
disclosures of directors’ remuneration have not been made or the part of the Directors’
Remuneration Report to be audited is not in agreement with the accounting records
andreturns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit & Risk Committee, we were appointed by
the shareholders to audit the financial statements for the year ending 29 March 2025
and subsequent financial periods. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm is 11 years, covering the
years ending 28 March 2015 to 29 March 2025.
15.2. Consistency of the audit report with the additional report to the Audit & Risk
committee
Our audit opinion is consistent with the additional report to the Audit & Risk Committee
we are required to provide in accordance with ISAs (UK).
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MARKS AND SPENCER GROUP PLC CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025120
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Report on other legal and regulatory requirements continued
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so
that we might state to the Company’s members those matters we are required to state
to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and
Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part
of the Electronic Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report
provides no assurance over whether the Electronic Format Annual Financial Report has
been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Jane Whitlock ACA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London
20 May 2025
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MARKS AND SPENCER GROUP PLC CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 121
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT

|  | 52 weeks | 52 weeks
|  | ended | ended
|  | 29 March 2025 | 30 March 2024
|  | Total | Total
| Notes | £m | £m
Revenue | 2, 3 | 13 , 81 6 . 8 | 13,040.1
Share of result in associate – Ocado Retail Limited | 3, 29 | (4 3 . 6) | (79.9)
Operating profit | 3, 5 | 624 . 3 | 7 14 . 2
Finance income | 5, 6 | 6 4 .7 | 146 . 7
Finance costs | 5, 6 | (177.2) | (18 8 . 4)
Profit before tax | 2, 4, 5 | 5 11 . 8 | 67 2.5
Income tax expense | 7 | (219. 9) | (24 7. 3)
Profit for the year |  | 291 . 9 | 42 5 . 2
Attributable to: |  |  |
Owners of the parent |  | 295 .7 | 431. 2
Non-controlling interests |  | (3 . 8) | (6 .0)
|  | 291 . 9 | 42 5 . 2
Earnings per share |  |  |
Basic earnings per share | 8 | 14 . 6 p | 21. 9 p
Diluted earnings per share | 8 | 14.0p | 20 . 8 p
Reconciliation of profit before tax and adjusting items: |  |  |
Profit before tax |  | 511 . 8 | 672. 5
Adjusting items | 5 | 363 .7 | 43. 9
Profit before tax and adjusting items – non-GAAP measure |  | 875 . 5 | 716 .4
Adjusted earnings per share – non-GAAP measure |  |  |
Adjusted basic earnings per share | 8 | 31. 9 p | 24 . 6 p
Adjusted diluted earnings per share | 8 | 30.6p | 23. 3p

Marks and Spencer Group plc Annual Report and Financial Statements 2025122
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

|  | 52 weeks | 52 weeks
|  | ended | ended
|  | 29 March 2025 | 30 March 2024
| Notes | £m | £m
Profit for the year |  | 291 . 9 | 42 5 . 2
Other comprehensive income/(expense): |  |  |
Items that will not be reclassified subsequently to profit or loss |  |  |
Remeasurements of retirement benefit schemes | 11 | (14 9. 2) | (41 9 . 2)
Tax on retirement benefit schemes |  | 49.7 | 104 .8
|  | (99. 5) | (31 4 . 4)
Items that may be reclassified subsequently to profit or loss |  |  |
Foreign currency translation differences |  |  |
– movements recognised in other comprehensive income |  | (8 . 3) | (11 . 5)
Cash flow hedges |  |  |
– fair value movements recognised in other comprehensive income | 21 | (19. 2) | (2 7. 5)
– reclassified and reported in profit or loss | 21 | 5 .7 | 5. 3
Tax credit on cash flow hedges |  | 2 .7 | 6 .1
|  | (19 .1) | (2 7. 6)
Other comprehensive expense for the year, net of tax |  | (11 8 . 6) | (3 42 . 0)
Total comprehensive income for the year |  | 17 3 . 3 | 83 . 2
Attributable to: |  |  |
Owners of the parent |  | 17 7. 1 | 89. 2
Non-controlling interests |  | (3 . 8) | (6 .0)
|  | 17 3 . 3 | 83 . 2

Marks and Spencer Group plc Annual Report and Financial Statements 2025 123
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|  | As at | As at
|  | 29 March | 30 March
|  | 2025 | 2024
| Notes | £m | £m
Assets |  |  |
Non-current assets |  |  |
Intangible assets | 14 | 18 7. 4 | 179. 5
Property, plant and equipment | 15 | 5, 408 . 5 | 5 ,1 9 0 .1
Investment property |  | 11 . 2 | 11 . 6
Investments in joint ventures and associates | 29 | 392 . 5 | 684. 2
Other financial assets | 16 | 21 . 3 | 12. 6
Retirement benefit assets | 11 | — | 81. 8
Trade and other receivables | 17 | 382 . 8 | 35 6.7
Derivative financial instruments | 21 | 0.1 | 0.7
Deferred tax assets | 23 | 13 . 9 | 11 . 7
|  | 6 , 4 1 7. 7 | 6 , 528 .9
Current assets |  |  |
Inventories |  | 843 . 9 | 7 76 . 9
Other financial assets | 16 | 289.5 | 12 . 3
Trade and other receivables | 17 | 3 27. 5 | 302 . 0
Derivative financial instruments | 21 | 7. 2 | 6.8
Current tax assets |  | 71.1 | 32. 9
Cash and cash equivalents | 18 | 864 . 5 | 1,022.4
|  | 2 , 403 .7 | 2,15 3 . 3
Total assets |  | 8 , 821 . 4 | 8,682.2
Liabilities |  |  |
Current liabilities |  |  |
Trade and other payables | 19 | 2 , 3 70 . 3 | 2 , 1 0 7. 9
Partnership liability to the Marks & Spencer UK |  |  |
Pension Scheme | 12 | — | 88.8
Borrowings and other financial liabilities | 20 | 355 . 8 | 250. 4
Derivative financial instruments | 21 | 2 5 .1 | 20.0
Provisions | 22 | 2 5 .1 | 47. 6
Current tax liabilities |  | 1.2 | 1.5
|  | 2 ,777 . 5 | 2 , 51 6 . 2

|  | As at | As at
|  | 29 March | 30 March
|  | 2025 | 2024
| Notes | £m | £m
Non-current liabilities |  |  |
Retirement benefit deficit | 11 | 12 2 . 7 | 4.6
Trade and other payables | 19 | 18 . 9 | 11 6 . 7
Borrowings and other financial liabilities | 20 | 2 , 58 8 .7 | 2, 882.8
Derivative financial instruments | 21 | 16 . 6 | 21. 9
Provisions | 22 | 14 6 . 2 | 1 0 4 .1
Deferred tax liabilities | 23 | 199 . 4 | 205 . 8
|  | 3 ,092 . 5 | 3, 335.9
Total liabilities |  | 5,870.0 | 5 , 8 52 .1
Net assets |  | 2 , 951 . 4 | 2, 830.1
Equity |  |  |
Issued share capital | 24 | 20 .6 | 20. 5
Share premium account |  | 982 .7 | 9 6 7. 0
Capital redemption reserve |  | 2,680. 4 | 2,680.4
Hedging reserve | 21 | (7. 5) | (8 . 4)
Cost of hedging reserve | 21 | 7. 0 | 5.4
Other reserve |  | (6 , 5 42 . 2) | (6,54 2.2)
Foreign exchange reserve |  | (8 9. 4) | (81 .1)
Retained earnings |  | 5, 888. 5 | 5,78 9. 6
Equity attributable to owners of the parent |  | 2 , 9 4 0.1 | 2, 831.2
Non-controlling interests |  | 11 . 3 | (1 .1)
Total equity |  | 2 , 951 . 4 | 2, 830.1

The financial statements were approved by the Board and authorised for issue on
20 May 2025. The financial statements also comprise notes 1 to 32.
Stuart Machin
Chief Executive Officer
Marks and Spencer Group plc Annual Report and Financial Statements 2025124
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

| Ordinary | Share | Capital |  |  |  | Foreign |  |  | Non- |
| share | premium | redemption | Hedging | Cost of | Other | exchange | Retained |  | controlling |
| capital | account | reserve | reserve | hedging | res e r ve ¹ | reserve | earnings | Total | interest | Total
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m
As at 2 April 2023 | 19. 8 | 910 .7 | 2,680. 4 | (31 . 9) | 4. 2 | (6 , 5 42 . 2) | (69. 6) | 5 , 70 5 . 0 | 2 , 6 76 . 4 | 4.4 | 2 ,680. 8
Profit for the year | — | — | — | — | — | — | — | 431. 2 | 431 . 2 | (6. 0) | 42 5 . 2
Other comprehensive (expense)/income: |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation |  |  |  |  |  |  |  |  |  |  |
– movements recognised in other comprehensive income | — | — | — | — | — | — | (11 . 5) | — | (11 . 5) | — | (11 . 5)
Remeasurements of retirement benefit |  |  |  |  |  |  |  |  |  |  |
schemes | — | — | — | — | — | — | — | (41 9 . 2) | (41 9 . 2) | — | (41 9 . 2)
Tax on retirement benefit schemes | — | — | — | — | — | — | — | 10 4. 8 | 104 .8 | — | 104 . 8
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |
– fair value movement in other comprehensive income | — | — | — | (2 9.1) | 1.6 | — | — | — | (2 7. 5) | — | (2 7. 5)
– reclassified and reported in profit or loss | — | — | — | 5.3 | — | — | — | — | 5. 3 | — | 5. 3
Tax on cash flow hedges | — | — | — | 6.5 | (0. 4) | — | — | — | 6 .1 | — | 6 .1
Other comprehensive (expense)/income | — | — | — | (17. 3) | 1.2 | — | (11 . 5) | (314 . 4) | (342 . 0) | — | (3 42 . 0)
Total comprehensive (expense)/income | — | — | — | (17. 3) | 1.2 | — | (11 . 5) | 116 . 8 | 89. 2 | (6 . 0) | 83 . 2
Cash flow hedges recognised in inventories | — | — | — | 54.4 | — | — | — | — | 54.4 | — | 54.4
Tax on cash flow hedges recognised in inventories | — | — | — | (13 . 6) | — | — | — | — | (13 . 6) | — | (13 . 6)
Transactions with owners: |  |  |  |  |  |  |  |  |  |  |
Dividends | — | — | — | — | — | — | — | (19. 6) | (19. 6) | — | (19. 6)
Transactions with non-controlling |  |  |  |  |  |  |  |  |  |  |
shareholders | — | — | — | — | — | — | — | — | — | 0. 5 | 0. 5
Shares issued in respect of employee share |  |  |  |  |  |  |  |  |  |  |
options | 0.7 | 56. 3 | — | — | — | — | — | — | 5 7. 0 | — | 5 7. 0
Purchase of shares held by employee trusts | — | — | — | — | — | — | — | (83 .1) | (83 .1) | — | (8 3 .1)
Credit for share-based payments | — | — | — | — | — | — | — | 48 . 3 | 48. 3 | — | 48. 3
Deferred tax on share schemes | — | — | — | — | — | — | — | 22. 2 | 22. 2 | — | 22.2
As at 30 March 2024 | 20. 5 | 9 6 7. 0 | 2 ,680. 4 | (8 . 4) | 5.4 | (6 , 5 42 . 2) | (8 1 .1) | 5 ,78 9. 6 | 2 , 831. 2 | (1 .1) | 2 , 83 0 .1

1 The “Other reserve” was originally created as part of the capital restructuring that took place in 2002. It represents the difference between the nominal value of the shares issued prior to the capital reduction by the
Company (being the carrying value of the investment in Marks and Spencer plc) and the share capital, share premium and capital redemption reserve of Marks and Spencer plc at the date of the transaction.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 125
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED

| Ordinary | Share | Capital |  |  |  | Foreign |  |  | Non- |
| share | premium | redemption | Hedging | Cost of | Other | exchange | Retained |  | controlling |
| capital | account | reserve | reserve | hedging | re se r ve ¹ | reserve | earnings | Total | interest | Total
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m
As at 31 March 2024 | 20 . 5 | 9 6 7. 0 | 2 ,680. 4 | (8 . 4) | 5.4 | (6 , 5 42 . 2) | (8 1. 1) | 5 , 78 9. 6 | 2 , 8 31. 2 | (1 .1) | 2 , 8 30 .1
Profit for the year | — | — | — | — | — | — | — | 295 .7 | 295 .7 | (3. 8) | 291 . 9
Other comprehensive (expense)/income: |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation |  |  |  |  |  |  |  |  |  |  |
– movements recognised in other comprehensive income | — | — | — | — | — | — | (8 . 3) | — | (8 . 3) | — | (8 . 3)
Remeasurements of retirement benefit schemes | — | — | — | — | — | — | — | (149 . 2) | (14 9. 2) | — | (149 . 2)
Tax on retirement benefit schemes | — | — | — | — | — | — | — | 49.7 | 49. 7 | — | 49 .7
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |
– fair value movement in other comprehensiveincome | — | — | — | (21 . 4) | 2.2 | — | — | — | (19. 2) | — | (19. 2)
– reclassified and reported in profit or loss | — | — | — | 5.7 | — | — | — | — | 5.7 | — | 5 .7
Tax on cash flow hedges | — | — | — | 3.3 | (0. 6) | — | — | — | 2.7 | — | 2 .7
Other comprehensive (expense)/income | — | — | — | (12 . 4) | 1.6 | — | (8 . 3) | (99. 5) | (118 . 6) | — | (11 8 . 6)
Total comprehensive (expense)/income | — | — | — | (12 . 4) | 1. 6 | — | (8 . 3) | 196 . 2 | 17 7. 1 | (3. 8) | 173 . 3
Cash flow hedges recognised in inventories | — | — | — | 17. 7 | — | — | — | — | 17. 7 | — | 1 7. 7
Tax on cash flow hedges recognised in inventories | — | — | — | (4 . 4) | — | — | — | — | (4. 4) | — | (4 . 4)
Transactions with owners: |  |  |  |  |  |  |  |  |  |  |
Dividends | — | — | — | — | — | — | — | (60. 5) | (60 . 5) | — | (6 0. 5)
Transactions with non-controlling |  |  |  |  |  |  |  |  |  |  |
shareholders | — | — | — | — | — | — | — | (15.9) | (1 5.9) | 16 . 2 | 0. 3
Shares issued in respect of employee share |  |  |  |  |  |  |  |  |  |  |
options | 0.1 | 15 .7 | — | — | — | — | — | — | 15 . 8 | — | 15 . 8
Purchase of shares held by employee trusts | — | — | — | — | — | — | — | (81 . 3) | (81. 3) | — | (81. 3)
Credit for share-based payments | — | — | — | — | — | — | — | 52 . 4 | 52 . 4 | — | 52 . 4
Tax on share schemes | — | — | — | — | — | — | — | 8.0 | 8 .0 | — | 8 .0
As at 29 March 2025 | 20.6 | 982 .7 | 2,680. 4 | (7. 5) | 7. 0 | (6 , 5 42 . 2) | (89 . 4) | 5,888. 5 | 2 , 9 4 0.1 | 11. 3 | 2 , 9 51 . 4

1 The “Other reserve” was originally created as part of the capital restructuring that took place in 2002. It represents the difference between the nominal value of the shares issued prior to the capital reduction by the
Company (being the carrying value of the investment in Marks and Spencer plc) and the share capital, share premium and capital redemption reserve of Marks and Spencer plc at the date of the transaction.
Marks and Spencer Group plc Annual Report and Financial Statements 2025126
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS

|  | 52 weeks | 52 weeks
|  | ended | ended
|  | 29 March | 30 March
|  | 2025 | 2024
| Notes | £m | £m
Cash flows from operating activities |  |  |
Cash generated from operations | 26 | 1, 521. 3 | 1, 492. 9
Income tax paid |  | (208 . 3) | (191 . 2)
Net cash inflow from operating activities |  | 1 , 313 . 0 | 1 , 3 01. 7
Cash flows from investing activities |  |  |
Proceeds on property disposals |  | 48. 3 | 6 .1
Purchase of property, plant and equipment |  | (40 8 . 4) | (359 . 5)
Purchase of intangible assets |  | (98 . 5) | (69. 8)
(Purchase)/sale of current financial assets |  | (277.2) | 0.7
Purchase of non-current financial assets |  | (12 . 5) | (2.6)
Proceeds on disposal of non-current financial assets |  | 0.6 | —
Loans to related parties | 28 | — | (62. 0)
Interest received |  | 51. 6 | 51 . 8
Net cash used in investing activities |  | (69 6 .1) | (43 5 . 3)
Cash flows from financing activities |  |  |
Interest paid 1 |  | (15 8 .1) | (185 . 0)
Redemption of Medium-Term Notes 2 |  | (1 8 7. 8) | (395.6)
Repayment of lease liabilities |  | (258 .6) | (243 . 5)
Payment of partnership liability to the Marks & Spencer UK Pension Scheme | 12 | (4 0 . 5) | (4 0.0)
Equity dividends paid |  | (60 . 5) | (19.6)
Shares issued on exercise of employee share options | 24 | 15 . 8 | 5 7. 0
Transactions with non-controlling interest |  | (2 .6) | —
Purchase of own shares by employee trust |  | (81. 3) | (8 3 .1)
Net cash used in financing activities |  | (773 . 6) | (9 0 9. 8)
Net cash outflow from activities |  | (156 .7) | (43 . 4)
Effects of exchange rate changes |  | (1 . 2) | (2.1)
Opening net cash |  | 1, 022 . 4 | 1 , 0 6 7. 9
Closing net cash | 27 | 86 4 .5 | 1,022.4

1 Includes interest paid on lease liabilities of £1 03 . 4m (last year: £102. 0 m).
2 Includes £19 0. 3m of outstanding 2025 and 2026 notes repurchased in June 2024, resulting in a gain of £2. 9 m recognised within ‘interest payable on Medium-Term Notes’ in net finance costs.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 127
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
General information
Marks and Spencer Group plc (the Company) is a public limited company domiciled and
incorporated in England and Wales under the Companies Act 2006. The address of the
Company’s registered office is Waterside House, 35 North Wharf Road, London W2 1NW,
United Kingdom.
The principal activities of the Company and its subsidiaries (the Group) and the nature
of the Group’s operations are as a Fashion, Home & Beauty and Food retailer.
These financial statements are presented in sterling, which is also the Company’s
functional currency, and are rounded to the nearest hundred thousand. Foreign
operations are included in accordance with the policies set out within this note.
Basis of preparation
The financial statements have been prepared for the 52 weeks ended 29 March 2025
(last year: 52 weeks ended 30 March 2024) in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards.
The Marks and Spencer Scottish Limited Partnership has taken an exemption under
paragraph 7 of the Partnership (Accounts) Regulations 2008 from the requirement to
prepare and deliver financial statements, in accordance with the Companies Act.
The financial statements have been prepared on a going concern basis. In adopting the
going concern basis, the Board has considered the business activities as set out on
pages 12 to 21, the financial position of the Group, its cash flows, liquidity position and
borrowing facilities as set out in the Financial Review on pages 23 to 31, the Group’s financial
risk management objectives and exposures to liquidity and other financial risks as set
out in note 21 and the principal risks and uncertainties as set out on pages 54 to 59.
The Group continues to maintain a robust financial position, providing it with sufficient
access to liquidity, through a combination of cash and committed facilities, to meet its
needs in the short and medium-term. At 29 March 2025, the Group had liquidity of
£1,739.5m (last year: £1,897.4m), comprising cash and cash equivalents of £864.5m, an
undrawn committed syndicated bank revolving credit facility (RCF) of £850.0m (set to
mature in June 2027), and undrawn uncommitted facilities amounting to £25.0m.
The RCF contains a financial covenant, being the ratio of earnings before interest, tax,
depreciation and amortisation; to net interest and depreciation on right-of-use assets
under IFRS 16. The covenant is measured biannually.
In adopting the going concern basis of preparation, the Board has assessed the Group’s
cash flow forecasts, which incorporate a latest estimate of the ongoing impact of
current market conditions on the Group and include a number of assumptions,
including sales growth and customer behaviour. While trading continues to be strong, in
forming its outlook on the future financial performance, the Board considered a variety
of downsides that the Group might experience, such as a sustained economic recession
and an inability for the Group to execute the transformation plan.
Under these latest forecasts, the Group is able to operate without the need to draw on
its available facilities and without taking any supplementary mitigating actions, such as
reducing capital expenditure or other discretionary spend. The forecast cash flows also
indicate that the Group will comply with all relevant banking covenants during the
forecast period, being at least 12 months from the approval of the financial statements.
The Board has modelled a severe, but plausible, downside scenario. This downside
scenario assumes that:
•
There will be a period of economic recession in 2025/26, resulting in a reduction in
sales growth of 2.0 – 4.0% across all three business units compared to the budget and
three-year plan.
•
A delay on transformation benefits results in incremental sales expected from the
transformation declining by 7.5%, 15% and 30% respectively across the three-year period.
•
Ocado Retail Limited experiences limited customer demand, with a 5.0% reduction in
volume growth each year across the three-year period compared to the budget and
three-year plan.
Even under this severe but plausible downside scenario, the Group would continue to
have sufficient liquidity and headroom on its existing facilities and against the RCF
financial covenant for the forecast period. In addition, should such a scenario arise,
there are a range of mitigating actions that could be taken to reduce the impact. Based
on latest assessments of the expected impact of the cyber incident on the business,
and modelling a worst case impact on trade and a delayed recovery and return to
website sales, the Board considers there are sufficient mitigating actions that could be
adopted so that this downside scenario remains a plausible, but remote, outcome for
the Group.
In addition, reverse stress testing has been applied to the model to determine the
decline in sales that the Group could absorb before exhausting the Group’s total
liquidity. Such a scenario, and the sequence of events which could lead to it, is
considered to be extremely remote.
As a result, the Board expects the Group to have adequate resources to continue in
operation, meet its liabilities as they fall due, retain sufficient available cash and not
breach the covenant under the revolving credit facility for the foreseeable future, being
a period of at least 12 months from the approval of the financial statements. The Board
therefore considers it appropriate for the Group to adopt the going concern basis in
preparing its financial statements.
New accounting standards adopted by the Group
The Group has applied the following new standards and interpretations for the first time
for the annual reporting period commencing 31 March 2024:
•
Amendment to IFRS 16: Lease Liability in a Sale and Leaseback.
•
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current.
Marks and Spencer Group plc Annual Report and Financial Statements 2025128
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
New accounting standards adopted by the Group continued
•
Amendments to IAS 1: Non-current Liabilities with Covenants.
•
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements.
The adoption of the standards and interpretations listed above has not led to any
changes to the Group’s accounting policies or had any other material impact on the
financial position or performance of the Group.
New accounting standards in issue but not yet effective
New standards and interpretations that are in issue but not yet effective are listed below:
•
Amendments to IAS 21: Lack of Exchangeability.
•
Amendments to IFRS 9 and IFRS 7: Classification and Measurement of Financial
Instruments.
•
Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture.
•
IFRS 18: Presentation and Disclosure in Financial Statements.
•
IFRS 19: Subsidiaries without Public Accountability: Disclosures.
With the exception of the adoption of IFRS 18, the adoption of the above standards and
interpretations is not expected to lead to any changes to the Group’s accounting policies
nor have any other material impact on the financial position or performance of the Group.
IFRS 18 was issued in April 2024 and is effective for periods beginning on or after 1
January 2027. Early application is permitted and comparatives will require restatement.
The standard will replace IAS 1 Presentation of Financial Statements and although it will
not change how items are recognised and measured, the standard brings a focus on the
income statement and reporting of financial performance. Specifically, it classifies
income and expenses into three new defined categories – operating, investing and
financing and two new subtotals operating profit and loss and profit or loss before
financing and income tax, introduces disclosures of management defined performance
measures (MPMs) and enhances general requirements on aggregation and disaggregation.
The impact of the standard on the Group is currently being assessed and it is not yet
practicable to quantify the effect of IFRS 18 on these consolidated financial statements,
however there is no impact on presentation for the Group in the current year given the
effective date – this will be applicable for the Group’s 2027/28 Annual Report.
Alternative performance measures
In reporting financial information, the Group presents alternative performance
measures (APMs), which are not defined or specified under the requirements of IFRS.
The Group believes that these APMs, which are not considered to be a substitute for, or
superior to, IFRS measures, provide stakeholders with additional helpful information on
the performance of the business. These APMs are consistent with how the business
performance is planned and reported within the internal management reporting to the
Board and Executive Committee. Some of these measures are also used for the purpose
of setting remuneration targets.
The key APMs that the Group uses include: sales; like-for-like sales growth; adjusted
operating profit; adjusted operating margin; profit before tax and adjusting items;
adjusted basic earnings per share; net debt; net debt excluding lease liabilities; free
cash flow; free cash flow from operations; capital expenditure; and return on capital
employed. Each of these APMs, and others used by the Group, is set out in the Glossary,
including explanations of how they are calculated and how they can be reconciled to a
statutory measure where relevant.
The Group reports some financial measures, primarily International sales, on both a
reported and constant currency basis. The constant currency basis, which is an APM,
retranslates the previous year revenues at the average actual periodic exchange rates
used in the current financial year. This measure is presented as a means of eliminating
the effects of exchange rate fluctuations on the year-on-year reported results.
The Group makes certain adjustments to the statutory profit measures in order to
derive many of these APMs. The Group’s policy is to exclude items that are considered
significant in nature and/or quantum over the total expected life of the programme or
are consistent with items that were treated as adjusting in prior periods. The Group’s
definition of adjusting items is consistent with prior periods. Adjusted results are
consistent with how business performance is measured internally and presented to aid
comparability of performance. On this basis, the following items were included within
adjusting items for the 52-week period ended 29 March 2025:
•
Net charges associated with the strategic programme in relation to the review of the
store estate.
•
Significant restructuring costs and other associated costs arising from strategy or
operational changes that are not considered by the Group to be part of the normal
operating costs of the business.
•
Impairment charges and provisions that are considered to be significant in nature
and/or value to the trading performance of the business.
•
Charges and reversals of previous impairments arising from the write-off of assets
and other property charges that are significant in nature and/or value. Impairment
charges are recognised in adjusted operating profit where they relate to stores not
previously impaired or do not otherwise meet the Group’s adjusting items policy.
•
Adjustments to income from M&S Bank due to a provision recognised by M&S Bank for
the cost of providing redress to customers in respect of possible mis-selling of M&S
Bank financial products.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 129
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Alternative performance measures continued
•
Amortisation of the identified intangible assets arising as part of the investment in
Ocado Retail Limited.
•
Net finance costs incurred in relation to Gist Limited deferred and contingent consideration.
•
Share of net charges associated with Ocado Retail Limited’s UK network capacity review.
•
Net pension finance income in relation to closed scheme not considered part of
ongoing operating activities of the Group.
•
Significant charges relating to the renegotiation of the Group’s Relationship
Agreement with M&S Bank.
•
Significant charges in relation to the furniture simplification programme that are not
considered to be day-to-day operational costs of the business, mainly relating to
contractual obligations with suppliers.
•
(New) Net income associated with a significant legal settlement that is not considered
to be a normal income stream of the business.
Refer to note 5 for a summary of the adjusting items.
A summary of the Company’s and the Group’s material accounting policies is given below.
Accounting convention
The financial statements are drawn up on the historical cost basis of accounting, except
for certain financial instruments (including derivative instruments) and plan assets of
defined benefit pension schemes which are measured at fair value at the end of each
reporting period, as explained in the accounting policies below.
Basis of consolidation
The Group financial statements incorporate the financial statements of Marks and
Spencer Group plc and all its subsidiaries made up to the period end date. Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used in line with those used by the Group.
Subsidiaries
Subsidiary undertakings are all entities (including special purpose entities) over which
the Company has control. Control is achieved when the Company has the power over
the entity; is exposed, or has rights to, variable returns from its involvement with the
entity; and has the ability to use its power to affect its returns. The Company reassesses
whether or not it controls an entity if facts and circumstances indicate that there are
changes to one or more of these three elements of control. Consolidation of a
subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Subsidiary undertakings acquired
during the year are recorded using the acquisition method of accounting and their
results are included from the date of acquisition.
The separable net assets, including property, plant and equipment and intangible
assets, of the newly acquired subsidiary undertakings are incorporated into the
consolidated financial statements on the basis of the fair value as at the effective date
of control.
Intercompany transactions, balances, and unrealised gains on transactions between
Group companies are eliminated on consolidation.
Associates
An associate is an entity over which the Group has significant influence and that is
neither a subsidiary nor an interest in a joint venture. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not
control nor joint control over those policies. The results and assets and liabilities of
associates are incorporated in these financial statements using the equity method of
accounting. Under the equity method, an investment in an associate is recognised
initially in the consolidated statement of financial position at cost and adjusted
thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate. When the Group’s share of losses of an associate exceeds the
Group’s interest in that associate (which includes any long-term interests that, in
substance, form part of the Group’s net investment in the associate), the Group
discontinues recognising its share of further losses. Additional losses are recognised
only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate. Dividends received or receivable from an associate
are recognised as a reduction in the carrying amount of the investment.
Associated undertakings acquired during the year are recorded using the equity
method of accounting and their results are included from the date of acquisition. On
acquisition of the investment in an associate, any excess of the cost of the investment
over the Group’s share of the net fair value of the identifiable assets and liabilities of the
investee is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group’s share of the net fair value of the identifiable
assets and liabilities over the cost of the investment, after reassessment, is recognised
immediately in profit or loss in the period in which the investment is acquired. The
Group’s share of the net fair value of identified intangible assets is amortised over the
expected useful economic life of the assets.
The requirements of IAS 36 are applied to determine whether it is necessary to
recognise any impairment loss with respect to the Group’s investment in an associate.
When necessary, the entire carrying amount of the investment (including goodwill) is
tested for impairment in accordance with IAS 36 as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs of disposal) with its
carrying amount.
When a Group company transacts with an associate of the Group, profits and losses
resulting from the transactions with the associate are recognised only to the extent of
interests in the associate that are not related to the Group.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Revenue
Revenue comprises sales of goods to customers outside the Group less an appropriate
deduction for actual and expected returns, discounts and loyalty scheme vouchers, and
is stated net of value added tax and other sales taxes. Revenue is recognised when
performance obligations are satisfied and goods are delivered to our franchise partners
or the customer and the control of goods is transferred to the buyer. Online sales are
recognised when items are delivered, as this is when the performance obligation is
deemed to have been satisfied. Where third-party branded goods are sold on a
consignment basis, only the commission receivable is included in statutory revenue.
A right of return is not a separate performance obligation and the Group is required to
recognise revenue net of estimated returns. A refund liability and a corresponding asset
in inventory representing the right to recover products from the customer are recognised.
The Group enters into agreements which entitle other parties to operate under the
Marks & Spencer brand name for certain activities and operations, such as M&S Bank.
These contracts give rise to performance-based variable consideration. Income
dependent on the performance of the third-party operations is recognised when it is
highly probable that a significant reversal in the amount of income recognised will not
occur, and presented as other operating income.
Revenue from the rendering of supply chain services is recognised when a performance
obligation is satisfied.
Supplier income
In line with industry practice, the Group enters into agreements with suppliers to share
the costs and benefits of promotional activity and volume growth. The Group receives
income from its suppliers based on specific agreements in place. Supplier income
received is recognised as a deduction from cost of sales based on the entitlement that
has been earned up to the balance sheet date for each relevant supplier agreement.
Marketing contributions, equipment hire and other non-judgemental, fixed rate
supplier charges are not included in the Group’s definition of supplier income.
The types of supplier income recognised by the Group and the associated recognition
policies are:
A. Promotional contribution Includes supplier contributions to promotional giveaways
and pre-agreed contributions to annual ‘spend and save’ activity.
Income is recognised as a deduction to cost of sales over the relevant promotional
period. Income is calculated and invoiced at the end of the promotional period based on
actual sales or according to fixed contribution arrangements. Contributions earned, but
not invoiced, are accrued at the end of the relevant period.
B. Volume-based rebates Includes annual growth incentives, seasonal contributions
and contributions to share economies of scale resulting from moving product supply.
Annual growth incentives are calculated and invoiced at the end of the financial year,
once earned, based on fixed percentage growth targets agreed for each supplier at the
beginning of the year. They are recognised as a reduction in cost of sales in the year to
which they relate. Other volume-based rebates are agreed with the supplier and spread
over the relevant season/contract period to which they relate. Contributions earned,
but not invoiced, are accrued at the end of the relevant period.
Uncollected supplier income at the balance sheet date is classified within the financial
statements as follows:
A. Trade and other payables The majority of income due from suppliers is net against
amounts owed to that supplier as the Group has the legal right and intention to offset
these balances.
B. Trade and other receivables Supplier income that has been earned, but not invoiced,
at the balance sheet date is recognised in trade and other receivables and primarily
relates to volume-based rebates that run up to the period end.
In order to provide users of the accounts with greater understanding in this area,
additional balance sheet disclosure is provided in note 17 to the financial statements.
M&S Bank
The Group has an economic interest in M&S Bank which entitles the Group to a share of
the profits of M&S Bank after appropriate contractual deductions.
Dividends
Final dividends are recorded in the financial statements in the period in which they are
approved by the Company’s shareholders. Interim dividends are recorded in the period
in which they are approved and paid.
Pensions
Funded pension plans are in place for the Group’s UK employees and some overseas
employees.
For defined benefit (DB) pension schemes, the difference between the fair value of the
assets and the present value of the DB obligation is recognised as an asset or liability in
the statement of financial position. The DB obligation is actuarially calculated using the
projected unit credit method. An asset can be recognised as, in the event of a plan
wind-up, the pension scheme rules provide the Group with an unconditional right to a
refund of surplus assets, assuming a full settlement of plan liabilities. In the ordinary
course of business, the Trustees have no rights to wind up or change, the benefits due to
the members of the scheme. As a result, any net surplus in the UK DB scheme is
recognised in full.
The service cost of providing retirement benefits to employees during the year, together
with the cost of any curtailment, is charged to operating profit in the year. The Group no
longer incurs any service cost or curtailment costs related to the UK DB Pension
Scheme as the scheme is closed to future accrual.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 131
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Pensions continued
The net interest cost on the net retirement benefit asset/liability is calculated by
applying the discount rate, measured at the beginning of the year, to the net defined
benefit asset/liability and is included as a single net amount in finance income.
Remeasurements, being actuarial gains and losses, together with the difference
between actual investment returns and the return implied by the net interest cost, are
recognised immediately in other comprehensive income.
Payments to defined contribution retirement benefit schemes are charged as an
expense on an accruals basis.
For further details on pension schemes and the partnership liability to the Marks & Spencer
UK Pension Scheme, see notes 11 and 12.
Intangible assets
A. Goodwill Goodwill arising on consolidation represents the excess of the
consideration paid and the amount of any non-controlling interest in the acquiree over
the fair value of the identifiable assets and liabilities (including intangible assets) of the
acquired entity at the date of the acquisition. Goodwill is recognised as an asset and
assessed for impairment annually or as triggering events occur. Any impairment in
value is recognised within the income statement.
B. Acquired intangible assets Acquired intangible assets include trademarks or brands.
These assets are capitalised on acquisition at cost and amortised on a straight-line basis
over their estimated useful lives.
Acquired intangible assets are tested for impairment as triggering events occur.
Any impairment in value is recognised within the income statement.
C. Software intangibles Where computer software is not an integral part of a related
item of computer hardware, the software is treated as an intangible asset. Capitalised
software costs include external direct costs of goods and services, as well as internal
payroll-related costs for employees who are directly associated with the project. When
the Group incurs configuration and customisation costs as part of a cloud-based
software-as-a-service agreement, and where this does not result in the creation of an
asset which the Group has control over, then these costs are expensed.
Capitalised software development costs are amortised on a straight-line basis over
their expected economic lives, normally between three and five years. Computer
software under development is held at cost less any recognised impairment loss.
Any impairment in value is recognised within the income statement.
Property, plant and equipment
The Group’s policy is to state property, plant and equipment at cost less accumulated
depreciation and any recognised impairment loss. Property is not revalued for
accounting purposes. Assets in the course of construction are held at cost less any
recognised impairment loss. Costs include professional fees and, for qualifying assets,
borrowing costs. Leasehold buildings with lease premiums and ongoing peppercorn
lease payments are considered in-substance purchases and are therefore included
within the buildings category of property, plant and equipment.
Depreciation is provided to write off the cost of tangible non-current assets (including
investment properties), less estimated residual values on a straight-line basis as follows:
•
Freehold land – not depreciated.
•
Buildings – depreciated to their residual value over their estimated remaining
economic lives of 10-50 years.
•
Fixtures, fittings and equipment – 3-25 years, according to the estimated economic
life of the asset.
Residual values and useful economic lives are reviewed annually. Depreciation is
charged on all additions to, or disposals of, depreciating assets in the year of purchase
or disposal.
Any impairment in value, or reversal of an impairment, is recognised within the
income statement.
Leasing
The Group recognises a right-of-use asset and corresponding liability at the date at
which a leased asset is made available for use by the Group, except for short-term
leases (defined as leases with a lease term of 12 months or less) and leases of low-value
assets. For these leases, the Group recognises the lease payments as an operating
expense on a straight-line basis over the term of the lease.
Lease liabilities are measured at the present value of the future lease payments,
excluding any payments relating to non-lease components. Future lease payments
include fixed payments, in-substance fixed payments, and variable lease payments that
are based on an index or a rate, less any lease incentives receivable. Lease liabilities also
take into account amounts payable under residual value guarantees and payments to
exercise options to the extent that it is reasonably certain that such payments will be
made. The payments are discounted at the rate implicit in the lease or, where that
cannot be readily determined, at an incremental borrowing rate.
Right-of-use assets are measured initially at cost based on the value of the associated
lease liability, adjusted for any payments made before inception, initial direct costs and
an estimate of the dismantling, removal and restoration costs required in the terms of
the lease. The Group presents right-of-use assets in ‘property, plant and equipment’ in
the consolidated statement of financial position.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Leasing continued
Subsequent to initial recognition, the lease liability is reduced for payments made and
increased to reflect interest on the lease liability (using the effective interest method).
The related right-of-use asset is depreciated over the term of the lease or, if shorter, the
useful economic life of the leased asset. The lease term shall include the period of an
extension option where it is reasonably certain that the option will be exercised. Where
the lease contains a purchase option, the asset is written off over the useful life of the
asset when it is reasonably certain that the purchase option will be exercised.
The Group remeasures the lease liability (and makes a corresponding adjustment to the
related right-of-use asset) whenever:
•
The lease term has changed or there is a change in the assessment of exercise of a
purchase option, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
•
The lease payments change due to changes in an index or rate or a change in
expected payment under a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease payments using the initial
discount rate (unless the lease payments’ change is due to a change in a floating
interest rate, in which case a revised discount rate is used).
•
A lease contract is modified and the lease modification is not accounted for as a
separate lease, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
Leases for which the Group is a lessor are classified as finance or operating leases. A
lease is classified as a finance lease if it transfers substantially all the risks and rewards
of ownership to the lessee, and classified as an operating lease if it does not. When the
Group is an intermediate lessor, it accounts for the head lease and the sublease as two
separate contracts. The sublease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease.
Amounts due from lessees under finance leases are recognised as receivables at the
amount of the Group’s net investment in the leases. Finance lease income is allocated to
accounting periods so as to reflect a constant periodic rate of return on the Group’s net
investment in the lease. Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease.
Cash and cash equivalents
Cash and cash equivalents are held for the purpose of meeting short-term cash
commitments and include short-term deposits with banks and other financial
institutions, with an initial maturity of three months or less, money market funds and
credit card payments received within 48 hours. Bank transactions are recorded on their
settlement date.
Inventories
Inventories are valued on a weighted average cost basis and carried at the lower of cost
and net realisable value. Cost includes all direct expenditure and other attributable
costs incurred in bringing inventories to their present location and condition. All
inventories are finished goods. Certain purchases of inventories may be subject to cash
flow hedges for foreign exchange risk. The initial cost of hedged inventory is adjusted
by the associated hedging gain or loss transferred from the cash flow hedge reserve
(basis adjustment).
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past
event, and it is probable that the Group will be required to settle that obligation.
Provisions are measured at the best estimate of the expenditure required to settle the
obligation at the end of the reporting period, and are discounted to present value where
the effect is material.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. A fair
value for the equity-settled share awards is measured at the date of grant. The Group
measures the fair value of each award using the Black-Scholes model where
appropriate.
The fair value of each award is recognised as an expense over the vesting period on a
straight-line basis, after allowing for an estimate of the share awards that will eventually
vest. The level of vesting is reviewed at each reporting period and the charge is adjusted
to reflect actual and estimated levels of vesting.
Foreign currencies
The financial statements are presented in sterling which is the Company’s functional
currency.
The results of overseas subsidiaries are translated at the weighted average of monthly
exchange rates for revenue and profits. The statements of financial position of overseas
subsidiaries are translated at year-end exchange rates. The resulting exchange
differences are booked into reserves and reported in the consolidated statement of
comprehensive income. On disposal of an overseas subsidiary the related cumulative
translation differences recognised in reserves are reclassified to profit or loss and are
recognised as part of the gain or loss on disposal.
Transactions denominated in foreign currencies are translated at the exchange rate at
the date of the transaction. Foreign currency monetary assets and liabilities held at the
end of the reporting period are translated at the closing balance sheet rate. The
resulting exchange gain or loss is recognised within the income statement.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 133
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Taxation
Tax expense comprises current and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity, in which case the related tax is recognised
in other comprehensive income or directly in equity.
Provision is made for uncertain tax positions when it is considered probable that there
will be a future outflow of funds to a tax authority. The provision is calculated using the
single best estimate where that outcome is more likely than not and a weighted average
probability in other circumstances. The position is reviewed on an ongoing basis, to
ensure appropriate provision is made for each known tax risk.
Deferred tax is accounted for using a temporary difference approach, and is the tax
expected to be payable or recoverable on temporary differences between the carrying
amount of assets and liabilities in the statement of financial position and the
corresponding tax bases used in the computation of taxable profit. Deferred tax is
calculated based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, applying tax rates and laws enacted, or substantively
enacted, at the end of the reporting period.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax liabilities are recognised for taxable temporary differences arising on
investments in subsidiaries, associates and joint ventures, except where the reversal of
the temporary difference can be controlled by the Group and it is probable that the
difference will not reverse in the foreseeable future. In addition, deferred tax liabilities
are not recognised on temporary differences that arise from goodwill which is not
deductible for tax purposes.
Deferred tax assets are recognised to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences can be utilised. The
carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are not recognised in respect of temporary
differences that arise on initial recognition of assets and liabilities acquired other than
in a business combination.
Financial instruments
Financial assets and liabilities are recognised in the Group’s statement of financial
position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets are initially classified as at fair value through profit and loss, fair value
through other comprehensive income or amortised cost depending on the Group’s
business model for managing the financial asset and its cash flow characteristics. Financial
assets that are held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are measured at amortised cost.
The table below sets out the Group’s accounting classification of each class of its
financial assets and liabilities:

| Note | Measurement
Financial assets: |  |
Other investments | 16 | FVTPL 1
Loans to related parties | 17 | Amortised cost
Trade receivables | 17 | Amortised cost
Lease receivables | 17 | Amortised cost
Other receivables | 17 | Amortised cost
Cash and cash equivalents | 18 | Amortised cost 2
Derivative financial instruments | 21 | FVTPL
Financial liabilities: |  |
Borrowings and overdrafts | 20 | Amortised cost
Trade payables | 19 | Amortised cost
Other payables | 19 | Amortised cost
Contingent consideration | 19 | FVTPL
Accruals | 19 | Amortised cost
Lease liabilities | 20 | Amortised cost
Derivative financial instruments | 21 | FVTPL

1 Fair value through profit or loss.
2 Deposits held in low-volatility net asset value money market funds are classified as FVTPL.
A. Trade and other receivables Trade receivables are recorded initially at transaction
price and subsequently measured at amortised cost, except those which, due to
factoring arrangements, are held within a ‘hold to collect and sell’ business model and
are measured at fair value through other comprehensive income (FVOCI). Trade
receivables measured at amortised cost are carried at nominal value less an allowance
for any doubtful debts. The allowance for doubtful debts is recognised based on
management’s expectation of losses without regard to whether an impairment trigger
happened or not (an expected credit loss model).
B. Other financial assets Other financial assets consist of loans receivable, venture
capital investments and short-term investments with a maturity date of more than 90
days. Financial assets that do not meet the criteria for being measured at amortised
cost are measured at fair value through profit or loss (FVTPL) with gains and losses
arising from changes in fair value included in the income statement for the period.
Marks and Spencer Group plc Annual Report and Financial Statements 2025134
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Financial instruments continued
C. Classification of financial liabilities and equity Financial liabilities and equity
instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities.
D. Bank borrowings Interest-bearing bank loans and overdrafts are initially recorded at fair
value, which equals the proceeds received, net of direct issue costs. They are subsequently
held at amortised cost. Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for using an effective interest rate
method and are added to, or deducted from, the carrying amount of the instrument.
E. Loan notes Long-term loans are initially measured at fair value net of direct issue
costs and are subsequently held at amortised cost. If the loan is designated in a fair
value hedge relationship, the carrying value of the loan is adjusted for fair value gains
or losses attributable to the risk being hedged.
F. Trade payables Trade payables are recorded initially at fair value and subsequently
measured at amortised cost. Generally, this results in their recognition at their nominal value.
G. Equity instruments Equity instruments issued by the Group are recorded at the
consideration received, net of direct issue costs.
Derivative financial instruments and hedging activities
The Group primarily uses cross-currency swaps and forward foreign currency contracts
to manage its exposures to fluctuations in interest rates and foreign exchange rates.
These instruments are initially recognised at fair value on the trade date and are
subsequently remeasured at their fair value at the end of the reporting period. The
method of recognising the resulting gain or loss is dependent on whether the derivative
is designated as a hedging instrument and the nature of the item being hedged.
The Group designates certain hedging derivatives as either:
•
A hedge of a highly probable forecast transaction or change in the cash flows of a
recognised asset or liability (a cash flow hedge); or
•
A hedge of the exposure to change in the fair value of a recognised asset or liability (a
fair value hedge).
At the inception of a hedging relationship, the hedging instrument and the hedged item
are documented, along with the risk management objectives, and strategy for
undertaking various hedge transactions and prospective effectiveness testing is
performed. During the life of the hedging relationship, prospective effectiveness
testing is performed to ensure that the instrument remains an effective hedge of the
transaction. Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in the income statement as they arise.
A. Cash flow hedges Changes in the fair value of derivative financial instruments that
are designated and effective as hedges of future cash flows are recognised in other
comprehensive income. The element of the change in fair value which relates to the
foreign currency basis spread is recognised in the cost of hedging reserve, with the
remaining change in fair value recognised in the hedging reserve and any ineffective
portion is recognised immediately in the income statement in finance costs. If the firm
commitment or forecast transaction that is the subject of a cash flow hedge results in
the recognition of a non-financial asset or liability, then, at the time the asset or liability
is recognised, the associated gains or losses on the derivative that had previously been
recognised in other comprehensive income and accumulated in the cash flow hedge
reserve are removed directly from equity and included in the initial measurement of the
asset or liability. If the hedged item is transaction related, the foreign currency basis
spread is reclassified to profit or loss when the hedged item affects profit or loss. If the
hedged item is time period related, then the amount accumulated in the cost of
hedging reserve is reclassified to profit or loss on a systematic and rational basis. Those
reclassified amounts are recognised in profit or loss in the same line as the hedged item.
If the hedged item is a non-financial item, then the amount accumulated in the cost of
hedging reserve is removed directly from equity and included in the initial carrying
amount of the recognised non-financial item.
For hedges that do not result in the recognition of an asset or a liability, amounts
deferred in the cash flow hedge reserve are recognised in the income statement in the
same period in which the hedged items affect net profit or loss.
B. Fair value hedges Changes in the fair value of a derivative instrument designated in a
fair value hedge are recognised in the income statement. The hedged item is adjusted
for changes in fair value attributable to the risk being hedged with the corresponding
entry in the income statement.
Changes in the fair value of derivative financial instruments that do not qualify for
hedge accounting are recognised in the income statement as they arise.
C. Discontinuance of hedge accounting Hedge accounting is discontinued when the
hedge relationship no longer qualifies for hedge accounting. This includes when the
hedging instrument expires or is sold, terminated or exercised, or when occurrence of
the forecast transaction is no longer highly probable. The Group cannot voluntarily
de-designate a hedging relationship.
When a cash flow hedge is discontinued, any cumulative gain or loss on the hedging
instrument accumulated in the cash flow hedge reserve is retained in equity until the
forecast transaction occurs. Subsequent changes in the fair value are recognised in the
income statement. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss accumulated in the cash flow hedge reserve is transferred to the
income statement for the period.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Derivative financial instruments and hedging activities continued
When a fair value hedge is discontinued, the fair value adjustment to the carrying
amount of the hedged item arising from the hedged risk is amortised to the income
statement based on the recalculated effective interest rate at that date.
The Group does not use derivatives to hedge income statement translation exposures.
Reserves
The following describes the nature and purpose of each reserve within equity:
A. Share premium account Proceeds received in excess of the nominal value of shares
issued, net of any transaction costs.
B. Capital redemption reserve Amounts transferred from share capital on redemption
or repurchase of issued shares.
C. Hedging reserve Cumulative gains and losses on hedging instruments deemed
effective in cash flow hedges.
D. Cost of hedging Cumulative gains and losses on the portion excluded from the
designated hedging instrument that relates to changes in the foreign currency basis.
E. Other reserve Originally created as part of the capital restructuring that took place in
2002. It represents the difference between the nominal value of the shares issued prior
to the capital reduction by the Company (being the carrying value of the investment in
Marks and Spencer plc) and the share capital, share premium and capital redemption
reserve of Marks and Spencer plc at the date of the transaction.
F. Foreign exchange reserve Gains and losses arising on retranslating the net assets of
overseas operations into sterling.
G. Retained earnings All other net gains and losses and transactions with owners (e.g.
dividends) not recognised elsewhere.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of consolidated financial statements requires the Group to make
estimates and judgements that affect the application of policies and reported amounts.
Critical judgements represent key decisions made by management in the application of
the Group accounting policies. Where a significant risk of materially different outcomes
exists due to management assumptions or sources of estimation uncertainty, this will
represent a key source of estimation uncertainty. Estimates and judgements are
continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates.
The estimates which have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next 12 months are discussed on the
following page.
Critical accounting judgements
Adjusting items
The directors believe that the adjusted profit and earnings per share measures provide
additional useful information to shareholders on the performance of the business.
These measures are consistent with how business performance is measured internally
by the Board and Executive Committee. The profit before tax and adjusting items
measure is not a recognised profit measure under IFRS and may not be directly
comparable with adjusted profit measures used by other companies. The classification
of adjusting items requires significant management judgement after considering the
nature and intentions of a transaction. The Group’s definitions of adjusting items are
outlined within both the Group accounting policies and the Glossary. These definitions
have been applied consistently year on year.
Note 5 provides further details on current year adjusting items and their adherence to
Group policy.
UK defined benefit pension (deficit)/surplus
Where a surplus on a defined benefit scheme arises, the rights of the Trustees to
prevent the Group obtaining a refund of that surplus in the future are considered in
determining whether it is necessary to restrict the amount of the surplus that is
recognised, or recognise an additional minimum funding liability. The UK defined
benefit scheme is in deficit of £122.7m at 29 March 2025.
Following consultation with external advisers, the directors have made the judgement
that if the scheme is in a surplus, these amounts meet the requirements of
recoverability on the basis that paragraph 11(b) of IFRIC 14 applies, enabling a refund of
surplus assuming the gradual settlement of the scheme liabilities over time until all
members have left the scheme.
Assessment of control over Ocado Retail Limited
At the reporting date, the directors assessed that the Group had significant influence
over Ocado Retail Limited and therefore accounted for the investment as an associate
(see note 29). This assessment was based on the current rights held in the period by the
respective shareholders and required judgement in assessing these rights. These rights
included determinative rights held by Ocado Group Plc, after agreed dispute resolution
procedures, in relation to the approval of the Ocado Retail Limited business plan and
budget and the appointment and removal of Ocado Retail Limited’s Chief Executive
Officer. Subsequent to the year end, on 6 April 2025, Ocado Group Plc gave up those
rights to the Group, resulting in a change in the status of the investment in Ocado Retail
Limited from associate to subsidiary. See notes 29 and 30 for further details.
Determining the lease term
The Group determines the lease term as the non-cancellable term of the lease, together
with any periods covered by an option to extend the lease if it is reasonably certain to be
exercised, or any periods covered by an option to terminate the lease if it is reasonably
certain not to be exercised.
Marks and Spencer Group plc Annual Report and Financial Statements 2025136
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Determining the lease term continued
The Group has several lease contracts for land and buildings that include extension and
termination options. The Group applies judgement in evaluating whether it is
reasonably certain whether or not to exercise the option to renew or terminate the lease.
That is, it considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination, including: whether there are significant
penalties to terminate (or not extend); whether any leasehold improvements are
expected to have a significant remaining value; historical lease durations; the
importance of the underlying asset to the Group’s operations; and the costs and
business disruption required to replace the leased asset.
Most renewal periods and periods covered by termination options are included as part of
the lease term for leases of land and buildings. The Group typically exercises its option to
renew (or does not exercise its option to terminate) for these leases because there will be
a significant negative effect on trading if a replacement property is not readily available.
The lease term is reassessed if a significant event or a significant change in circumstances
occurs which affects the assessment of reasonable certainty, for example if a store is
identified to be closed as part of the store estate strategic programme.
Key sources of estimation uncertainty
Climate change impact
In preparing the consolidated financial statements, the Group has considered the
impact of climate change, particularly in the context of the TCFD disclosures set out on
pages 38 to 50 and the Group’s sustainability targets. The Group’s existing fixed asset
replacement programme is phased over several years and therefore any changes in the
requirements associated with climate change would not have a material impact in any
given year. The costs expected to be incurred in connection with the Group’s commitments
are included within the Group’s budget and three-year plan which have been used to
support the impairment reviews of non-current assets and the going concern and
viability assessments. Further disclosures in relation to the impact of climate change on
the impairment assessment of intangibles and property, plant and equipment are
included in notes 14 and 15. Given the identified risks are expected to be present in the
medium to long-term, the impact of climate change on the going concern period and
viability of the Group over the next three years is not expected to be material and is
therefore not currently classified as a key source of estimation uncertainty.
Store estate programme
The Group is undertaking a significant strategic programme to review its store estate,
resulting in a net charge of £84.4m (last year: £93.0m) in the year. A significant level of
estimation has been used to determine the charges to be recognised in the year. The most
significant judgement that impacts the charge is that the stores identified as part of
the programme are more likely than not to close. Further significant closure costs and
impairment charges may be recorded in future years, depending on decisions made about
further store closures and the successful delivery of the transformation programme.
Where a store closure has been announced, there is a reduced level of estimation
uncertainty as the programme actions are to be taken over a shorter and more
immediate timeframe. Further significant estimation uncertainty arises in respect of
determining the recoverable amount of assets and the costs to be incurred as part of
the programme. Significant assumptions have been made including:
•
Reassessment of the useful lives of store fixed assets and closure dates.
•
Estimation in respect of the expected shorter-term trading value in use, including
assumptions with regard to the period of trading as well as changes to future sales,
gross margin and operating costs.
•
Estimation of the sale proceeds for freehold stores which is dependent upon
location-specific factors, timing of likely exit and future changes to the retail
property market valuations.
•
Estimation of the value of dilapidation payments required for leasehold store exits,
which is dependent on a number of factors including the extent of modifications of
the store, the terms of the lease agreement, and the condition of the property.
The assumption most likely to have a material impact is the closure date. See notes 5
and 15 for further detail.
Post-retirement benefits
The determination of pension net interest income and the defined benefit obligation of
the Group’s defined benefit pension schemes depends on the selection of certain
assumptions which include the discount rate, inflation rate and mortality rates.
Differences arising from actual experiences or future changes in assumptions will be
reflected in subsequent periods. The fair value of unquoted investments within total
plan assets is estimated with consideration of fair value estimates provided by the
manager of the investment or fund. See note 11 for further details on the impact of
changes in the key assumptions and estimates.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 137
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 Segmental information
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reporting on components of the Group that are regularly reviewed by the chief
operating decision-maker to allocate resources to the segments and to assess their performance.
The chief operating decision-maker has been identified as the Executive Committee. The Executive Committee reviews the Group’s internal reporting in order to assess
performance and allocate resources across each operating segment.
The Group’s reportable operating segments have therefore been identified as follows:
•
Fashion, Home & Beauty – comprises the retailing of womenswear, menswear, lingerie, kidswear, beauty and home products through UK and ROI retail stores and online.
•
Food – includes the results of the UK and ROI retail food business, UK Food franchise operations and UK supply chain services, with the following main categories: Meat, Fish,
Protein Deli and Dairy; Produce & Horticulture; Meals, Frozen and ‘food on the move’; Core Basket; Impulse & Events; Beers, wines & spirits; Hospitality; and direct sales to Ocado
Retail Limited.
•
International – consists of Marks and Spencer owned businesses in Europe (excluding Ireland) and Asia and the international franchise operations.
•
Ocado – includes the Group’s share of profits or losses from the investment in Ocado Retail Limited.
Other business activities and operating segments, including M&S Bank are combined and presented in “All other segments”. Finance income and costs are not allocated to
segments as each is managed on a centralised basis.
The Executive Committee assesses the performance of the operating segments based on a measure of adjusted operating profit. This measurement basis excludes the effects of
adjusting items from the operating segments.
The following is an analysis of the Group’s revenue and results by reportable segment:

|  |  | 52 weeks ended 29 March 2025 |  |  |  |  |  | 52 weeks ended 30 March 2024 |  |  |
| UK & ROI |  |  |  |  |  | UK & ROI |  |  |  |  |
| Fashion, |  |  |  |  |  | Fashion, |  |  |  |  |
| Home & | UK & |  |  | All other |  | Home & | UK & |  |  | All other |
| Beauty 4 | ROI Food | International | Ocado | segments | Group | Beauty 3,4 | ROI Food 3 | International 3 | Ocado | segments | Group
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m
Sales 1 | 4,235.3 | 9,021.0 | 658.0 | — | — | 13,914.3 | 4,091.4 | 8,298.8 | 719.1 | — | — | 13,109.3
Revenue | 4,137.8 | 9,021.0 | 658.0 | — | — | 13,816.8 | 4,022.2 | 8,298.8 | 719.1 | — | — | 13,040.1
Adjusted operating profit/(loss) 2 | 475.3 | 484.1 | 46.3 | (28.7) | 7.5 | 984.5 | 437.5 | 388.4 | 47.8 | (37.3) | 2.2 | 838.6
Finance income before adjusting |  |  |  |  |  |  |  |  |  |  |  |
items |  |  |  |  |  | 60.6 |  |  |  |  |  | 58.0
Finance costs before adjusting items |  |  |  |  |  | (169.6) |  |  |  |  |  | (180.2)
Profit/(loss) before tax and adjusting items | 475.3 | 484.1 | 46.3 | (28.7) | 7.5 | 875.5 | 437.5 | 388.4 | 47.8 | (37.3) | 2.2 | 716.4
Adjusting items |  |  |  |  |  | (363.7) |  |  |  |  |  | (43.9)
Profit/(loss) before tax | 475.3 | 484.1 | 46.3 | (28.7) | 7.5 | 511.8 | 437.5 | 388.4 | 47.8 | (37.3) | 2.2 | 672.5

1 Sales is revenue stated prior to adjustments for UK Fashion, Home & Beauty brand consignment sales of £97.5m (last year: £69.2m). There are no brand consignment sales in ROI.
2 Adjusted operating profit/(loss) is stated as gross profit less operating costs prior to adjusting items. At reportable segment level costs are allocated where directly attributable or based on an appropriate cost
driver for the cost.
3 The segments have been restated as the Group no longer includes the Republic of Ireland within the International segment and instead includes the Republic of Ireland within the Fashion, Home & Beauty and Food segments.
4 The UK and ROI Clothing & Home segment has been renamed UK and ROI Fashion, Home & Beauty during the year.
Marks and Spencer Group plc Annual Report and Financial Statements 2025138
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 Segmental information continued
Other segmental information

|  |  | 52 weeks ended 29 March 2025 |  |  |  |  |  | 52 weeks ended 30 March 2024 |  |  |
| UK & ROI |  |  |  |  |  | UK & ROI |  |  |  |  |
| Fashion, |  |  |  |  |  | Fashion, |  |  |  |  |
| Home & | UK & |  |  | All other |  | Home & | UK & |  |  | All other |
| Beauty 4 | ROI Food | International | Ocado | segments | Group | Beauty 3,4 | ROI Food 3 | International 3 | Ocado | segments | Group
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m
Additions to property, plant and equipment, and intangible assets |  |  |  |  |  |  |  |  |  |  |  |
(excluding goodwill and right-of- use assets) | 266.7 | 315.0 | 7.4 | — | — | 589.1 | 196.3 | 203.8 | 13.3 | — | — | 413.4
Depreciation and amortisation 1,2 | (200.6) | (240.9) | (30.7) | — | — | (472.2) | (223.5) | (241.6) | (36.5) | — | — | (501.6)
Impairment charges, impairment |  |  |  |  |  |  |  |  |  |  |  |
reversals and asset disposals 1 | (106.3) | (34.6) | — | — | — | (140.9) | (43.4) | (29.0) | — | — | — | (72.4)

1 These costs are allocated to a reportable segment where they are directly attributable. Where costs are not directly attributable, a proportional allocation is made to each segment based on an appropriate cost driver.
2 Includes £0.4m (last year: £0.2m) depreciation and impairments on investment property.
3 The segments have been restated as the Group no longer includes the Republic of Ireland within the International segment and instead includes the Republic of Ireland within the Fashion, Home and Beauty and
Food segments.
4 The UK and ROI Clothing & Home segment has been renamed UK and ROI Fashion, Home & Beauty during the year.
Segment assets and liabilities, including investments in associates and joint ventures, are not disclosed because they are not reported to or reviewed by the Executive Committee.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 139
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 Expense analysis

| 2025 | 2024
| Total | Total
| £m | £m
Revenue | 13,816.8 | 13,040.1
Cost of sales 1, 2 | (9,208.9) | (8,711.9)
Gross profit | 4,607.9 | 4,328.2
Selling and administrative expenses | (3,989.5) | (3,557.7)
Other operating income | 49.5 | 23.6
Share of results of Ocado Retail Limited | (43.6) | (79.9)
Operating profit | 624.3 | 714.2

The figures above include £360.2m (last year: £124.4m) adjusting item charges within
operating profit (see note 5). These are further analysed against the categories of selling
and administrative expenses (£351.8m; last year: £81.8m), other operating income (£6.5m;
last year: £nil) and share of results of Ocado Retail Limited (£14.9m; last year: £42.6m).
The selling and administrative expenses are further analysed below:

| 2025 | 2024
| Total | Total
| £m | £m
Employee costs 1 | 1,614.9 | 1,505.9
Occupancy costs | 451.6 | 493.8
Repairs, renewals and maintenance of property | 136.0 | 134.5
Depreciation, amortisation and asset impairments and disposals 2, 3 | 812.7 | 571.5
IT costs 4 | 325.1 | 280.6
Marketing costs | 261.2 | 249.4
Other costs 2, 4, 5 | 388.0 | 322.0
Selling and administrative expenses | 3,989.5 | 3,557.7

1 There are an additional £282.2m (last year: £268.2m) employee costs recorded within cost of sales.
These costs are included within the aggregate remuneration disclosures in note 10A.
2 Last year is restated to reflect the correct classification of certain employee costs related to
Gist Limited and Gist Distribution Limited.
3 Includes £0.4m (last year: £0.2m) depreciation and £nil (last year £nil) impairments charged on
investment property. There has been a reclassification of FY24 depreciation from other costs (£35.7m)
to depreciation, amortisation and asset impairments and disposals.
4 Last year is restated to reflect the correct classification of £51m of IT costs that were previously included
under ‘Other costs’.
5 Includes costs such as logistics, professional fees and sundry costs.
Adjusting items categorised as selling and administrative expenses are further analysed
as employee costs of £5.2m (last year: income of £1.9m); occupancy income of £2.1m
(last year: cost of £20.6m); depreciation, amortisation and asset impairments and
disposals £316.8m (last year: £29.6m); and other costs of £31.9m (last year: £33.5m).
4 Profit before taxation
The following items have been included in arriving at profit before taxation:

| 2025 | 2024
| £m | £m
Net foreign exchange (gains)/loss | (1.8) | (0.4)
Cost of inventories recognised as an expense | 7,842.4 | 7,419. 2
Cost of inventories recognised as an expense in respect |  |
of write-downs of inventory to net realisable value | 325.2 | 300.6
Depreciation of property, plant, and equipment 1 : |  |
– owned assets | 265.7 | 275.0
– right-of-use assets | 142.0 | 172.1
Amortisation of intangible assets | 64.5 | 54.7
Impairments of property, plant and equipment | 48.0 | 24.0
Impairments reversals of property, plant and equipment | (19.4) | (32.0)
Disposals of property, plant and equipment | 63.6 | 49.2
Disposals of intangible assets | 3.3 | 5.6
Impairments of right-of-use assets | 47.0 | 21.7
Impairment reversals of right-of-use assets | (4.3) | (13.6)

1 Includes £0.4m (last year: £0.2m) depreciation charged on investment property.
Included in administrative expenses is the auditor’s remuneration, including expenses
for audit and non-audit services, payable to the Company’s auditor Deloitte LLP and its
associates as follows:

| 2025 | 2024
| £m | £m
Annual audit of the Company and the consolidated |  |
financial statements 1 | 2.4 | 2.2
Audit of subsidiary companies 1 | 0.6 | 0.8
Total audit fees | 3.0 | 3.0
Audit-related assurance services | 0.5 | 0.3
Total non-audit services fees | 0.5 | 0.3
Total audit and non-audit services | 3.5 | 3.3

1 Additional incremental fees and scope change-related charges are included in LY figures as they relate
to the FY24 audit fee, however they were charged within FY25.
Marks and Spencer Group plc Annual Report and Financial Statements 2025140
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 Adjusting items
The total adjusting items reported for the 52-week period ended 29 March 2025 is a net
charge of £363.7m (last year: net charge of £43.9m). The adjustments made to reported
profit before tax to arrive at adjusted profit are:

|  | 2025 | 2024
| Notes | £m | £m
Included in share of result of associate – Ocado |  |  |
Retail Limited |  |  |
Amortisation and fair value adjustments arising as part of the investment in Ocado Retail Limited | 29 | (12.9) | (12.9)
Ocado Retail Limited – UK network capacity review | 29 | (2.0) | (29.7)
|  | (14.9) | (42.6)
Included in operating profit |  |  |
Strategic programmes – Store estate | 15, 22 | (84.4) | (93.0)
Strategic programmes – International reset | 22 | (20.6) | —
Strategic programmes – Digital and Technology |  |  |
transformation |  | (10.2) | —
Strategic programmes – Organisation | 17 | — | (3.5)
Strategic programmes – UK logistics | 25, 22 | — | 5.3
Strategic programmes – Furniture simplification | 22 | 11.1 | (18.3)
Store impairments, impairment reversals and other property charges | 15 | 2.3 | 35.1
Impairment of investment in Ocado Retail Limited | 29 | (248.5) | —
M&S Bank transformation and insurance mis-selling |  |  |
provisions |  | (15.5) | ( 7.0)
Acquisition of Gist Limited |  | — | (0.4)
Legal settlement |  | 20.5 | —
|  | (345.3) | (81.8)
Included in net finance income/(costs) |  |  |
Pension net finance income | 11 | 4.1 | 24.0
Remeasurement of Ocado Retail Limited |  |  |
contingent consideration |  | — | 64.7
Net finance costs incurred in relation to Gist |  |  |
Limited deferred and contingent consideration |  | (7.6) | (8.2)
|  | (3.5) | 80.5
Adjustments to profit before tax |  | (363.7) | (43.9)

Amortisation and fair value adjustments arising as part of the investment
in Ocado Retail Limited (£12.9m)
Intangible assets of £366.0m were acquired as part of the investment in Ocado Retail
Limited in 2019/20 relating to the Ocado brand and acquired customer relationships.
These intangibles are being amortised over their useful economic lives of 10 – 40 years
with an amortisation charge of £17.2m (last year: £17.2m) recognised in the period and a
related deferred tax credit of £4.3m (last year: £4.3m).
The amortisation charge and changes in the related deferred tax liability are included
within the Group’s share of the profit or loss of the associate and are considered to be
adjusting items as they are based on judgements about their value and economic life
and are not related to the Group’s underlying trading performance. These charges are
reported as adjusting items on the basis that they are significant in quantum and to aid
comparability from one period to the next.
Ocado Retail Limited – UK network capacity review (£2.0m)
On 25 April 2023, Ocado Retail Limited announced the plan to cease operation at its
Customer Fulfilment Centre (CFC) in Hatfield as part of the wider review of UK network
capacity. During H2 2023/24, Ocado Retail Limited also undertook a strategy and
capacity review for the Zoom network.
As a result, Ocado Retail Limited has recorded impairment charges, restructuring costs
and other related costs of closure. In the period a charge of £2.0m has been recognised
(last year: £29.7m).
The Group’s share of these costs, reported within the Group’s ‘share of result of
associate – Ocado Retail Limited’, are considered to be adjusting items as they are
one-off in nature and significant in value to the results of the Group and to the Ocado
segment. No further charges are expected in this programme.
Strategic programmes – Store estate (£84.4m)
In November 2016, the Group announced a strategic programme to transform and
rotate the store estate with the overall objective to improve our store estate to better
meet our customers’ needs. The Group has incurred charges of £1,047m in the nine years
up to March 2025 under this programme primarily relating to closure costs associated
with stores identified as part of the strategic transformation plans.
The Group has recognised a charge of £84.4m in the period in relation to those stores
identified as part of the rotation plans. The charge primarily reflects the latest view of
store closure plans and latest assumptions for estimated store closure costs, as well as
charges relating to the impairment of buildings and fixtures and fittings, and depreciation
as a result of shortening the useful economic life of stores based on the most recent
approved exit routes.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 141
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 Adjusting items continued
Strategic programmes – Store estate (£84.4m) continued
Further charges relating to the closure and rotation of the store estate are anticipated
over the next six years as the programme progresses, the quantum of which is subject to
change throughout the programme period as the Group gets greater certainty of
circumstances that need to be in place to make closure financially viable. Future
charges will not include Foodhall closures at a lease event where there is opportunity
for a better location, as this is not in the scope of the programme.
As at 29 March 2025, the total closure programme now consists of 220 stores, 139 of
which have already closed. Further charges of c.£256m are estimated within the next six
financial years, bringing anticipated total programme costs since 2016 to c.£1.3bn. In
addition, where store exit routes in the next six years lead to the recognition of gains on
exit, particularly those relating to asset management, these credits will also be
recognised within adjusting items as part of the programme. The anticipated total
programme costs to date do not include any costs that may arise in relation to a further
c.20 stores currently under consideration for closure within the next six years. At this
stage these c.20 stores remain commercially supportable and in the event of a decision
to close the store, the exit routes are not yet certain.
These costs are reported as adjusting items on the basis that they are significant in
quantum, relate to a strategic initiative focused on reviewing our store estate and to aid
comparability from one period to the next. The programme includes all stores within
the programme to be closed by 2030/31.
Strategic programmes – International reset (£20.6m)
In September 2024 the Group announced a reset of priorities for the International
business. This included closures of two European distribution centres, the exiting of
legacy franchise businesses not aligned to the strategy and investing in technology
relating to the strategy.
During the year the Group has incurred £20.6m of one-off charges that are not
considered to be day-to-day operational costs of the business, which mainly related to
contractual obligations due to the closure of the European distribution centres and the
write-off of certain assets no longer required.
These costs are adjusting items as they are significant to the International business and
the business would not have incurred these costs without the strategy reset. Further
costs of c.£5m are expected in 2025/26.
Strategic programmes – Digital and Technology transformation (£10.2m)
During 2024/25, to reduce costs and transform our business, the Group confirmed our
desire to build the Digital and Technology team we need for the future, investing in our
core foundations and business platforms. We will reset our operating model under the
new leadership team, bringing more capabilities in house, changing how we are
structured and how we operate in service of the business.
In total we are targeting to deliver £100m of structural cost savings over the next five
years, with an element of these savings coming from the new operating model and
resetting our partnerships. During 2024/25, as part of the programme, the Group has
incurred £6.9m of consultancy costs. The review of structures is expected to result in a
proposed reduction of 34 roles across the Digital and Technology department, with a
charge of £2.1m recognised in the period primarily for redundancy and exit costs
associated with these changes. The provision is expected to be fully utilised during
2025/26. Further charges of c.£21m are expected in relation to this programme to
2027/28, taking total programme costs to c.£31m.
These costs are considered to be adjusting items as the costs are part of the strategic
programme, are significant in value and would distort the year-on-year profitability of
the business.
Strategic programmes – Furniture simplification (£11.1m credit)
In March 2024 the Group withdrew from its two-person furniture delivery operation.
Following this the Group will no longer sell bulky products through its existing ‘two-person
delivery network’.
A net credit of £11.1m has been recognised in the period, mainly reflecting the settlement
of the contractual obligations with suppliers and the profit on disposal of a distribution
centre. As part of this closure the Group has incurred total programme net one-off charges
of £7.2m that are not considered to be day-to-day operational costs of the business.
These costs are adjusting items as they relate to a significant withdrawal of an operation
within the UK and ROI Fashion, Home & Beauty segment and the business would not
have incurred these costs but for the closure. No further charges are expected in this
programme.
Store impairments, impairment reversals and property charges
(£2.3m credit)
The Group has recognised a number of charges and credits in the period associated with
the carrying value of items of property, plant and equipment.
The Group has performed impairment testing based on the latest Board-approved budget
and three-year plan future cash flow projections for UK, ROI and International stores
(excluding those stores that have been captured as part of the store estate programme).
As a result, store impairment testing has identified stores where the current and anticipated
future performance does not support the carrying value of the stores. A charge of £0.2m
(last year: £0.5m) has been incurred primarily in respect of the impairment of assets
associated with these stores. In addition, a credit of £2.5m (last year: £35.6m) has been
recognised for the reversal of store impairments incurred in previous periods, where
revised future cash flow projections more than support the carrying value of the stores,
reflecting improved trading expectations compared to those assumed at the prior year
end. Refer to note 15 for further details on the impairments.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 Adjusting items continued
Store impairments, impairment reversals and property charges
(£2.3mcredit) continued
The charges/credits have been classified as an adjusting item on the basis of the
significant quantum of the charge/credit in the period to the results of the Group. Any
future charges or reversals relating to stores previously impaired within adjusting items
will continue to be recognised within adjusting items in line with the original charge. Any
future charges or reversals relating to stores not previously impaired within adjusting
items or not otherwise meeting the Group’s adjusting items policy will be recognised in
the underlying results.
Impairment of investment in Ocado Retail Limited (£248.5m)
The Group has recognised an impairment charge of £248.5m against its investment in
Ocado Retail Limited (ORL).
Ahead of the expected consolidation of ORL in April 2025 (see note 29), and in
accordance with the relevant accounting standards, the Group performed a valuation
exercise of ORL, which triggered a full impairment test of the Group’s existing
investment in ORL.
The enterprise value of the business has been based on the value of the cash flows that
ORL is expected to generate in the future. This valuation was performed using the latest
ORL Board-approved five-year cash flow forecast, adjusted for certain management
assumptions, and having regard to historical ORL performance, future achievable
growth and the impact of committed initiatives. A post-tax discount rate of 9.0% was
applied, based on a market participant view of comparable companies to ORL.
The Group determined that the recoverable amount of its investment in ORL is £385.0m
and as a result has recognised an impairment charge of £248.5m. Refer to note 29 for
further details on the impairment.
The impairment charge has been classified as an adjusting item on the basis it is one-off
and significant in nature, and value, to the results of the Group and to the Ocado segment.
M&S Bank transformation and insurance mis-selling provisions (£15.5m)
The Group has an economic interest in Marks and Spencer Financial Services plc (trading
as M&S Bank), a wholly owned subsidiary of HSBC UK Bank plc (HSBC UK), by way of a
Relationship Agreement that entitles the Group to a share of the profits of M&S Bank
after appropriate deductions.
On 9 April 2024, the Group and HSBC UK agreed a new seven-year deal focused on
enhancing M&S’ credit offering and payment solutions through M&S Bank and bringing
together digital payments and loyalty for M&S customers.
As previously disclosed, a deficit had accumulated since September 2012, primarily
relating to liabilities recognised by M&S Bank for redress to customers in respect of
possible mis-selling of financial products. Under the terms of the renegotiated
Relationship Agreement, the Group has agreed to settle the deficit by the end of the
new contract. Other one-off fees are also payable to M&S Bank under the renegotiated
Relationship Agreement which will be recognised as a reduction to income over the
term of contract.
Costs of £15.5m have been recognised in the period, predominantly relating to the
settlement of the deficit. Total programme costs to date are £20.5m with future net
charges of £88.3m expected over the next six financial years.
All of these costs are considered to be adjusting items as they are significant in
quantum and have crystallised as a result of major business change linked to M&S Bank.
Recognition of these costs within adjusting items is consistent with the disclosure of
costs relating to the deficit previously recognised within adjusting items. Furthermore,
these costs are significant in value to the results of both the Group and to the ‘all other
segments’ segment.
Legal settlement (£20.5m credit)
During the period an agreement was reached in relation to damages from an independent
third party following its involvement in anti-competitive behaviour that adversely
impacted the Group. The income from this was offset by legal and professional fees
incurred in relation to this claim and net income of £20.5m was recognised.
This net income is an adjusting item as it is significant in value, related to a litigation
settlement and is not considered to be a normal income stream of the business. No future
charges/credits are expected in relation to this settlement.
Net pension finance income (£4.1m credit)
In the period net finance income of £4.1m was recognised (last year: £24.0m).
The net pension finance income or expense can fluctuate significantly each year due to
changes in external market factors that are outside management’s control. Furthermore,
as the scheme is now closed, it is not considered to be part of the ongoing operating
activities of the Group.
Therefore, consistent with how management assesses the performance of the business,
the net pension finance income is considered to be an adjusting item.
Net finance costs incurred in relation to Gist Limited deferred and
contingent consideration (£7.6m)
Deferred consideration, resulting from the acquisition of Gist Limited, is held at
amortised cost, whilst the contingent consideration is remeasured at fair value at each
reporting date with the changes in fair value recognised in profit or loss. A charge of
£7.6m (last year: £8.2m) has been recognised in the period, representing the discount
unwind of the deferred consideration and revaluation of the contingent consideration
payable. See note 21 for further details. The discount unwind and change in fair value is
considered to be an adjusting item as it relates to a major transaction and consequently
is not considered representative of the normal operating performance of the Group.
The discount unwind and remeasurement will be recognised in adjusting items until the
final payments are made.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 143
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 Finance income/(costs)

| 2025 | 2024
| £m | £m
Bank and other interest receivable | 54.9 | 52.3
Interest income of subleases | 5.7 | 5.7
Finance income before adjusting items | 60.6 | 58.0
Finance income in adjusting items | 4.1 | 88.7
Finance income | 64.7 | 146.7
Other finance costs | (4.6) | (6.3)
Interest payable on syndicated bank facility | (4.6) | (4.8)
Interest payable on Medium-Term Notes | (36.7) | (42.2)
Interest payable on lease liabilities | (115.9) | (116.2)
Unwind of discount on provisions | (6.4) | (6.6)
Unwind of discount on Partnership liability to the Marks & |  |
Spencer UK Pension Scheme (see note 12) | (1.4) | (4.1)
Finance costs before adjusting items | (169.6) | (180.2)
Finance costs in adjusting items | (7.6) | (8.2)
Finance costs | (177.2) | (188.4)
Net finance costs | (112.5) | (41.7)

7 Income tax expense
A. Taxation charge

| 2025 | 2024
| £m | £m
Current tax |  |
UK corporation tax on profits for the year at 25% (last year: 25%) |  |
– current year | 157.2 | 151.8
– adjustments in respect of prior years | (0.3) | (8.4)
UK current tax | 156.9 | 143.4
Overseas current taxation |  |
– current year | 6.5 | 9.6
– adjustments in respect of prior years | (0.5) | (2.9)
Total current taxation | 162.9 | 150.1
Deferred tax |  |
– origination and reversal of temporary differences | 49.9 | 65.6
– adjustments in respect of prior years | 7.0 | 31.6
– changes in tax rate | 0.1 | —
Total deferred tax (see note 23) | 57.0 | 97.2
Total income tax expense | 219.9 | 247.3

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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
7 Income tax expense continued
B. Taxation reconciliation
The effective tax rate was 43.0% (last year: 36.8%) and is explained below.

| 2025 | 2024
| £m | £m
Profit before tax | 511.8 | 672.5
Notional taxation at standard UK corporation tax rate of 25% |  |
(last year: 25%) | 128.0 | 168.1
Depreciation and other amounts in relation to land and buildings that do not qualify for tax relief | (3.9) | 21.1
Depreciation and other amounts in relation to other fixed |  |
assets that do not qualify for tax relief | 13.5 | 11.2
Other income and expenses that are not taxable or allowable |  |
for tax purposes | (6.6) | 17.9
Joint venture results accounted for as profit after tax | 7.1 | 8.6
Overseas profits taxed at rates different from those of the UK | (3.0) | (3.3)
Movement in unrecognised deferred tax assets | 0.1 | (1.1)
Controlled foreign companies charge | 1.3 | 2.1
Pillar 2 top-up tax | 0.3 | —
Adjustments to the current and deferred tax charges in respect |  |
of prior periods | 6.2 | 2.4
Adjusting items: |  |
– Store and strategic programme impairments and other property charges where no tax relief is available | 5.8 | 1.3
– Cost incurred on acquisition of Gist | 1.9 | 0.3
– Other strategic programme income and expenses that are not taxable or allowable for tax purposes | 6.6 | 6.4
– Amortisation arising as a part of the investment in Ocado |  |
Retail Limited | 3.2 | 3.2
– Release of Ocado contingent consideration | — | (8.7)
– Joint venture results accounted for as profit after tax | 0.5 | —
– Impairment of investment in Ocado Retail Limited | 62.1 | —
– Adjustments to the land and buildings deferred tax due |  |
to adjusting items | (3.2) | —
– Adjustments to the current and deferred tax charges |  |
in respect of prior periods | — | 17.8
Total income tax expense | 219.9 | 247.3

The effective tax rate in respect of the profit before adjusting items was 26.7% (last year: 33.2%).
The Group has applied the temporary exemption under IAS 12 in relation to the accounting
for deferred taxes arising from the implementation of the Pillar Two rules, so that the
Group neither recognises nor discloses information about deferred tax assets and
liabilities related to Pillar Two.
The Group has performed an assessment of the Group’s potential exposure to Pillar Two
income taxes. The assessment of the potential exposure to Pillar Two income taxes is
based on the most recent tax filings, country-by-country reporting and financial
statements for the constituent entities in the Group. Based on the assessment, the
Pillar Two effective tax rates in most of the jurisdictions in which the Group operated are
above 15%. However, there are a limited number of jurisdictions where the transitional
safe harbour relief does not apply and the Pillar Two effective tax rate is close to 15%.
The Group does not expect a material exposure to Pillar Two income taxes in those
jurisdictions and a top up tax liability of £0.3m has been included in the total tax balance.
C. Current tax reconciliation
The current tax reconciliation shows the tax effect of the main adjustments made to the
Group’s accounting profits in order to arrive at its taxable profits. The reconciling items
differ from those in note 7B as the effects of deferred tax temporary differences are
ignored below.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
7 Income tax expense continued
C. Current tax reconciliation continued

| 2025 | 2024
| £m | £m
Profit before tax | 511.8 | 672.5
Notional taxation at standard UK corporation tax rate of 25% |  |
(last year: 25%) | 128.0 | 168.1
Disallowable accounting depreciation and other similar items | 68.4 | 66.6
Deductible capital allowances | (122.9) | (108.0)
Adjustments in relation to employee share schemes | 8.9 | (2.4)
Adjustments in relation to employee pension schemes | (0.2) | 14.6
Overseas profits taxed at rates different from those of the UK | (3.0) | (3.3)
Joint venture results accounted for as profit after tax | 7.1 | 8.6
Utilisation or increase of unrecognised losses | 0.1 | —
Other income and expenses that are not taxable or allowable | (3.9) | 15.4
Controlled foreign companies charge | 1.3 | 2.1
Pillar 2 top-up tax | 0.3 | —
Adjusting items: |  |
– UK store and strategic programme impairments and other property charges where no tax relief is available | 6.3 | 4.5
– Employee pension scheme | (1.0) | (6.0)
– Store estate lease surrender payments | 4.8 | 6.0
– Other strategic programme income and expenses that are not taxable or allowable for tax purposes | 1.8 | 0.4
– Cost incurred on acquisition of Gist | 1.9 | 0.3
– Amortisation arising as a part of the investment in Ocado |  |
Retail Limited | 3.2 | 10.7
– Release of Ocado contingent consideration | — | (16.2)
– Joint venture results accounted for as profit after tax | 0.5 | —
– Impairment of investment in Ocado Retail Limited | 62.1 | —
Current year current tax charge | 163.7 | 161.4
Represented by: |  |
UK current year current tax | 157.2 | 151.8
Overseas current year current tax | 6.5 | 9.6
| 163.7 | 161.4
UK adjustments in respect of prior years | (0.3) | (8.4)
Overseas adjustments in respect of prior years | (0.5) | (2.9)
Total current taxation (note 7A) | 162.9 | 150.1

8 Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax and the
weighted average number of ordinary shares in issue during the year.
The adjusted earnings per share figures have also been calculated based on earnings
before adjusting items that are significant in nature and/or quantum and are considered
distortive to underlying results (see note 5). These have been presented to provide
shareholders with an additional measure of the Group’s year-on-year performance.
For diluted earnings per share, the weighted average number of ordinary shares in issue
is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has
four types of dilutive potential ordinary shares, being: those share options granted to
employees where the exercise price is less than the average market price of the
Company’s ordinary shares during the year; unvested shares granted under the
Deferred Share Bonus Plan; unvested shares granted under the Restricted Share Plan;
and unvested shares within the Performance Share Plan that have met the relevant
performance conditions at the end of the reporting period.
Details of the adjusted earnings per share are set out below:

| 2025 | 2024
| £m | £m
Profit attributable to equity shareholders of the Company | 295.7 | 431.2
Add/(less): |  |
Adjusting items (see note 5) | 363.7 | 43.9
Tax on adjusting items | (14.0) | 9.5
Profit before adjusting items attributable to equity |  |
shareholders of the Company | 645.4 | 484.6
| Million | Million
Weighted average number of ordinary shares in issue | 2,021.9 | 1,973.2
Potentially dilutive share options under Group’s share option |  |
schemes | 88.8 | 102.7
Weighted average number of diluted ordinary shares | 2,110.7 | 2,075.9
| Pence | Pence
Basic earnings per share | 14.6 | 21.9
Diluted earnings per share | 14.0 | 20.8
Adjusted basic earnings per share | 31.9 | 24.6
Adjusted diluted earnings per share | 30.6 | 23.3

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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9 Dividends

| 2025 | 2024 | 2025 | 2024
| per share | per share | £m | £m
Dividends on equity ordinary shares |  |  |  |
Paid interim dividend | 1.0p | 1.0p | 20.3 | 19.6
Paid final dividend | 2.0p | — | 40.2 | —
| 3.0p | 1.0p | 60.5 | 19.6

The directors have approved a final dividend of 2 .6 p per share (last year: 2.0p per share),
which, in line with the requirements of IAS 10 Events after the Reporting Period, has not
been recognised within these results. This final dividend of c.£53.4m (last year: £40.2m)
will be paid on 4 July 2025 to shareholders whose names are on the Register of Members
at the close of business on 30 May 2025. The ordinary shares will be quoted ex-dividend
on 29 May 2025.
A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to
invest their dividends in the shares of the Company. For those shareholders electing to
receive the DRIP, the last date for receipt of a new election is 13 June 2025.
10 Employees
A. Aggregate remuneration
The aggregate remuneration and associated costs of Group employees (including the
Executive Committee) were:

| 2025 | 2024
| £m | £m
Wages and salaries | 1,835.8 | 1,738.1
Social security costs | 151.2 | 128.7
Pension costs | 112.7 | 104.0
Share-based payments (see note 13) | 44.4 | 42.3
Employee welfare and other personnel costs | 51.2 | 47.5
Capitalised staffing costs | (26.7) | (20.5)
Total aggregate remuneration 1 | 2,168.6 | 2,040.1

1 Excludes amounts recognised within adjusting items of £5.2m cost (last year: £1.9m income)
(see notes 3 and 5).
Details of key management compensation are given in note 28.
B. Average monthly number of employees

| 2025 | 2024
UK stores |  |
– management and supervisory categories | 4,847 | 4,915
– other UK support centre | 51,520 | 52,150
– management and supervisory categories | 3,725 | 3,709
– other UK operations | 898 | 917
– management and supervisory categories | 759 | 723
– other | 6,544 | 6,491
Overseas | 5,040 | 5,392
Total average number of employees | 73,333 | 74,297

If the number of hours worked was converted on the basis of a normal working week, the
equivalent average number of full-time employees would have been 51,279 (last year: 52,639).
11 Retirement benefits
The Group provides pension arrangements for the benefit of its UK employees through
the Your M&S Pension Saving Plan (a defined contribution (DC) arrangement) and prior
to 2017, through the Marks & Spencer Pension Scheme (UK DB Pension Scheme) (a defined
benefit (DB) arrangement).
The legacy UK DB Pension Scheme operated on a final pensionable salary basis and is
governed by a Trustee board which is independent of the Group. The UK DB Pension
Scheme closed to future accrual on 1 April 2017. There will be no further service charges
relating to the scheme and no future monthly employer contributions for current
service. At year end, the UK DB Pension Scheme had no active members (last year: nil),
44,327 deferred members (last year: 46,779) and 54,762 pensioners (last year: 54,085).
The DC plan is a pension plan under which the Group pays contributions to an
independently administered fund. Such contributions are based upon a fixed percentage
of employees’ pay. The Group has no legal or constructive obligations to pay further
contributions to the fund once the contributions have been paid. Members’ benefits are
determined by the amount of contributions paid by the Group and the member, together
with the investment returns earned on the contributions arising from the performance
of each individual’s investments and how each member chooses to receive their
retirement benefits. As a result, actuarial risk (that benefits will be lower than expected)
and investment risk (that assets invested in will not perform in line with expectations)
fall on the employee. At the year end, the DC arrangement had some 50,513 active
members (last year: 50,641) and some 68,861 deferred members (last year: 64,473).
Marks and Spencer Group plc Annual Report and Financial Statements 2025 147
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Retirement benefits continued
The Group also operates a small legacy funded DB pension scheme in the Republic of Ireland.
This scheme closed to future accrual on 31 October 2013. Other retirement benefits also
include a UK post-retirement healthcare scheme and unfunded retirement benefits.
The total Group retirement benefit cost was £71.4m (last year: £45.9m). Of this, costs of
£1.2m (last year: income of £18.9m) relates to the UK DB Pension Scheme, costs of
£67.0m (last year: costs of £61.7m) to the UK DC plan and costs of £3.2m (last year: costs
of £3.1m) to other retirement benefit schemes.
The Group considers two measures of the pension deficit. The accounting position is
shown on the Group balance sheet. The funding position, calculated at the triennial
actuarial valuation, is used to agree contributions made to the schemes. The two
measures will vary because they are for different purposes, and are calculated at
different dates and in different ways. The key calculation difference is that the funding
position considers the expected returns of scheme assets when calculating the liability,
whereas the accounting position calculated under IAS 19 discounts liabilities is based on
corporate bond yields.
The most recent actuarial valuation of the UK DB Pension Scheme was carried out as at
31 March 2024 and showed a funding surplus of £288m. This is a reduction compared to
the previous position at 31 March 2021 (funding surplus of £687m), primarily due to net
investment experience. The Company and Trustee have confirmed, in line with the
current funding arrangement, that no further contributions will be required to fund past
service as a result of this valuation (other than those already contractually committed
under the existing Marks and Spencer Scottish Limited Partnership arrangements – see
note 12).
By funding its DB pension schemes, the Group is exposed to the risk that the cost of
meeting its obligations is higher than anticipated. This could occur for several reasons,
for example:
•
Investment returns on the schemes’ assets may be lower than anticipated, especially if
falls in asset values are not matched by similar falls in the value of the schemes’ liabilities.
•
The level of price inflation may be higher than that assumed, resulting in higher
payments from the schemes.
•
Scheme members may live longer than assumed, for example, due to advances in
healthcare. Members may also exercise (or not exercise) options in a way that leads to
increases in the schemes’ liabilities, for example, through early retirement or
commutation of pension for cash.
•
Legislative changes could also lead to an increase in the schemes’ liabilities.
In addition, the Group is exposed to additional risks through its obligation to the UK DB
Pension Scheme via its interest in the Scottish Limited Partnership (see note 12). In particular,
under the legal terms of the Partnership, a default by the Group on the rental payments
to the Partnership or a future change in legislation could trigger earlier or higher payments
to the pension scheme, or an increase in the collateral to be provided by the Group.
With the pensioner buy-in policies purchased in September 2020, April 2019 and March
2018, the Scheme has now, in total, insured around 70% of the pensioner cash flow
liabilities for pensions in payment. The buy-in policies cover specific pensioner liabilities
and pass all risks to an insurer in exchange for a fixed premium payment, thus reducing
the Group’s exposure to changes in longevity, interest rates, inflation and other factors.
The Group is aware of a UK High Court legal ruling in June 2023 between Virgin Media
Limited and NTL Pension Trustees II Limited, which decided that certain historical rule
amendments were invalid if they were not accompanied by the actuarial certifications.
The ruling was subject to appeal and in July 2024 the Court of Appeal confirmed the UK
High Court legal ruling from June 2023. The Group is working with the Trustee and its
legal advisers to assess the impact of the ruling and this work is ongoing. As the
outcome of the assessment is still unknown, no adjustments have been made to the
Group financial statements at 29 March 2025.
A. Pensions and other post-retirement liabilities

| 2025 | 2024
| £m | £m
Total market value of assets | 5,292.8 | 6,108.9
Present value of scheme liabilities | (5,411.7) | (6,027.1)
Net funded pension plan (liability)/asset | (118.9) | 81.8
Unfunded retirement benefits | (2.1) | (2.2)
Post-retirement healthcare | (1.7) | (2.4)
Net retirement benefit (deficit)/surplus | (122.7) | 77.2
Analysed in the statement of financial position as: |  |
Retirement benefit asset | — | 81.8
Retirement benefit deficit | (122.7) | (4.6)
Net retirement benefit (deficit)/surplus | (122.7) | 77.2

Marks and Spencer Group plc Annual Report and Financial Statements 2025148
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Retirement benefits continued
A. Pensions and other post-retirement liabilities continued
In the event of a plan wind-up, the pension scheme rules provide Marks and Spencer plc
with an unconditional right to a refund of surplus assets assuming the full settlement of
plan liabilities. In the ordinary course of business, the Trustee has no right to wind up or
change the benefits due to members of the scheme. As a result, any net surplus in the
UK DB Pension Scheme is recognised in full.
B. Scheme assets
Changes in the fair value of the scheme assets are as follows:

| 2025 | 2024
| £m | £m
Fair value of scheme assets at start of year | 6,108.9 | 6,781.9
Interest income based on discount rate | 283.4 | 313.4
Actual return on scheme assets excluding amounts included in net interest income 1 | (722.9) | (6 47.8)
Changes in asset ceiling | 5.8 | (2.5)
Employer contributions 2 | (49.3) | 0.5
Benefits paid | (327.7) | (331.8)
Administration costs | (5.2) | (5.2)
Exchange movement | (0.2) | 0.4
Fair value of scheme assets at end of year | 5,292.8 | 6,108.9

1 The actual return on scheme assets was a loss of £439.5m (last year: £334.4m).
2 Includes replacement of first Partnership interest of £49.7m.
C. Pensions and other post-retirement liabilities
Changes in the present value of retirement benefit obligations are as follows:

| 2025 | 2024
| £m | £m
Present value of obligation at start of year | 6,031.7 | 6,304.5
Current service cost | 0.1 | 0.1
Administration costs | — | 0.2
Interest cost | 279.3 | 289.4
Benefits paid | (327.7) | (331.8)
Actuarial loss – experience | 111.7 | 5.5
Actuarial loss/(gain) – demographic assumptions | 5.0 | (102.0)
Actuarial gain – financial assumptions | (684.6) | (134.6)
Exchange movement | — | 0.4
Present value of obligation at end of year | 5,415.5 | 6,031.7
Analysed as: |  |
Present value of pension scheme liabilities | 5,411.7 | 6,027.1
Unfunded pension plans | 2.1 | 2.2
Post-retirement healthcare | 1.7 | 2.4
Present value of obligation at end of year | 5,415.5 | 6,031.7

The average duration of the defined benefit obligation at 29 March 2025 is 12.0 years
(last year: 13.0 years).
Marks and Spencer Group plc Annual Report and Financial Statements 2025 149
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Retirement benefits continued
D. Analysis of assets
The investment strategy of the UK DB Pension Scheme is driven by its liability profile, including its inflation-linked pension benefits. In addition to its interest in the Scottish Limited
Partnership (refer to note 12), the scheme invests in different types of bond (including corporate bonds and gilts) and derivative instruments (including inflation, interest rate,
cross-currency and total return swaps) in order to align movements in the value of its assets with movements in its liabilities arising from changes in market conditions. Broadly, the
scheme has hedging that covers 98% of interest rate movements and 99% of inflation movements, as measured on the Trustee’s funding assumptions which use a discount rate
derived from gilt yields.
The fair value of the total plan assets at the end of the reporting period for each category is as follows:

|  | 2025 |  |  | 2024 |
| Quoted | Unquoted | Total | Quoted | Unquoted | Total
| £m | £m | £m | £m | £m | £m
Debt investments |  |  |  |  |  |
– Government bonds net of repurchase agreements 1 | 3,283.5 | (1,855.8) | 1,427.7 | 1,706.0 | (106.2) | 1,599.8
– Corporate bonds | 11.0 | 87.9 | 98.9 | 12.4 | 1.1 | 13.5
– Asset backed securities and structured debt | — | 220.8 | 220.8 | — | 258.8 | 258.8
Scottish Limited Partnership interest (see note 12) | — | — | — | — | 88.5 | 88.5
Equity investments |  |  |  |  |  |
– Developed markets | — | — | — | 13.2 | — | 13.2
Growth asset funds |  |  |  |  |  |
– Global property | — | 161.3 | 161.3 | — | 219.3 | 219.3
– Hedge and reinsurance | — | 295.9 | 295.9 | 5.7 | 314.5 | 320.2
– Private equity and infrastructure | — | 122.6 | 122.6 | — | 148.1 | 148.1
Derivatives |  |  |  |  |  |
– Interest and inflation rate swaps | 21.5 | — | 21.5 | 168.1 | — | 168.1
– Foreign exchange contracts and other derivatives | 23.3 | — | 23.3 | (3.5) | — | (3.5)
Cash and cash equivalents | 160.5 | — | 160.5 | 230.7 | — | 230.7
Other – Buy-in insurance | — | 1,935.0 | 1,935.0 | — | 2,026.3 | 2,026.3
– Secure income asset funds | — | 965.7 | 965.7 | — | 1,064.4 | 1,064.4
Total 2 | 3,499.8 | 1,933.4 | 5,433.2 | 2,132.6 | 4,014.8 | 6,147.4

1 Repurchase agreements were £1,855.8m (last year: £106.2m).
2 The difference between the total assets of £5,433.2m above compared to £5,292.8m is £140.4m.This relates to the cap applied to the Irish DB scheme and therefore the actuarial gain is not recognised.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Retirement benefits continued
D. Analysis of assets continued
The fair values of the above equity and debt investments are based on publicly available
market prices wherever available. Unquoted investments, hedge funds and reinsurance
funds are stated at fair value estimates provided by the manager of the investment or
fund. Property includes both quoted and unquoted investments. The fair value of the
Scottish Limited Partnership interest is based on the expected cash flows and
benchmark asset-backed credit spreads. It is the policy of the scheme to hedge a
proportion of interest rate and inflation risk. The scheme reduces its foreign currency
exposure using forward foreign exchange contracts.
E. Financial assumptions
The financial assumptions for the UK DB Pension Scheme and the most recent actuarial
valuations of the other post-retirement schemes have been updated by independent
qualified actuaries to take account of the requirements of IAS 19 Employee Benefits in
order to assess the liabilities of the schemes and are as follows:

| 2025 | 2024
| % | %
Rate of increase in pensions in payment for service | 2.0-3.0 | 2.1-3.1
Discount rate | 5.75 | 4.80
Inflation rate (RPI) | 3.10 | 3.20
Long-term healthcare cost increases | 7.10 | 7.20

F. Demographic assumptions
The UK demographic assumptions are mainly in line with those adopted for the last
formal actuarial valuation of the scheme performed as at 31 March 2024. The UK
post-retirement mortality assumptions are based on an analysis of the pensioner
mortality trends under the scheme for the period to March 2024. The specific mortality
rates used are based on the VITA lite tables, with future projections based on up-to-date
industry models, parameterised to reflect scheme data. The life expectancies
underlying the valuation are as follows:

|  | 2025 | 2024
Current pensioners (at age 65) | – male | 22.5 | 21.7
| – female | 23.9 | 24.1
Future pensioners – currently in deferred status |  |  |
(atage 65) | – male | 23.7 | 23.0
| – female | 25.3 | 25.5

G. Sensitivity analysis
The table below summarises the estimated impact of reasonably possible changes in
the significant actuarial assumptions on the UK DB Pension Scheme surplus:

| 2025 | 2024
| £m | £m
Decrease in scheme surplus caused by a decrease in the discount rate of 0.25% | (20.0) | (30.0)
Increase in scheme surplus caused by an increase in the discount rate of 0.25% | 15.0 | 25.0
Decrease in scheme surplus caused by a decrease in the discount rate of 1.0% | (80.0) | (120.0)
Increase in scheme surplus caused by an increase in the discount rate of 1.0% | 70.0 | 100.0
Decrease in scheme surplus caused by a decrease in the inflation rate of 0.25% | (10.0) | (20.0)
Decrease in scheme surplus caused by a decrease in the inflation rate of 0.5% | (20.0) | (40.0)
Increase in scheme surplus caused by decrease in the average |  |
life expectancy of one year | 110.0 | 130.0

The sensitivity analysis above is based on a change in one assumption while holding all
others constant. Therefore, interdependencies between the assumptions have not been
taken into account within the analysis. The sensitivities reflect the range of recent
assumption movements and illustrate that the financial assumption sensitivities do not
move in a linear fashion .
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 Retirement benefits continued
H. Analysis of amounts charged against profits
Amounts recognised in comprehensive income in respect of defined benefit retirement
plans are as follows:

| 2025 | 2024
| £m | £m
Current service cost | 0.1 | 0.1
Administration costs | 5.2 | 5.2
Net interest income | (4.1) | (24.0)
Total | 1.2 | (18.7)
Remeasurement on the net defined benefit (deficit)/surplus: |  |
Actual return on scheme assets excluding amounts included in net interest income | 722.9 | 6 47.8
Actuarial loss/(gain) – demographic assumptions | 5.0 | (102.0)
Actuarial loss – experience | 111.7 | 5.5
Actuarial gain – financial assumptions | (684.6) | (134.6)
Change in asset ceiling | (5.8) | 2.5
Components of defined benefit expense recognised in other comprehensive income | 149.2 | 419.2

12 Marks and Spencer Scottish Limited Partnership
Marks and Spencer plc is a general partner and the Marks & Spencer UK Pension Scheme
is a limited partner of the Marks and Spencer Scottish Limited Partnership (the Partnership).
Under the Partnership agreement, the limited partners have no involvement in the
management of the business and shall not take any part in the control of the Partnership.
The general partner is responsible for the management and control of the Partnership
and, as such, the Partnership is consolidated into the results of the Group.
The Partnership holds £1.3bn (last year: £1.3bn) of properties at book value which have
been leased back to Marks and Spencer plc. The Group retains control over these properties,
including the flexibility to substitute alternative properties into the Partnership.
In February 2025 the Group and the Pension Scheme Trustees agreed a change to the
Partners’ entitlements to distributions from the Partnership. The first limited Partnership
interest and second limited Partnership interest were replaced by a third limited
Partnership interest. The table below shows the impact on 2024/25.

| First | Second |
| Partnership | Partnership |
| interest | interest | Total
| £m | £m | £m
Distributions due in 2024/25 before amendment to Partners’ entitlements | 89.7 | 36.4 | 126.1
Actual pension scheme distributions paid in 2024/25 | (40.5) | — | (40.5)
Distributions no longer due to be paid | 49.2 | 36.4 | 85.6

The first limited Partnership interest (held by the Marks & Spencer UK Pension Scheme),
previously entitled the Pension Scheme to receive £89.7m in June 2024. During the period,
the Group and the Pension Scheme Trustees agreed to amend the distribution dates as
part of the restructure so that the Pension Scheme received £40.0m in June 2024 and
£0.5m in February 2025 and is entitled to no further distributions under this interest.
The second Partnership interest (also held by the Marks & Spencer UK Pension Scheme),
previously entitled the Pension Scheme to receive a further annual distribution of
£36.4m from June 2017 until June 2031. During the period, the Group and the Pension
Scheme Trustees agreed to amend the distribution dates as part of the restructure so
that the Pension Scheme received no distributions in the year and is entitled to no
further distributions.
The new third Partnership interest (also held by the Marks & Spencer UK Pension
Scheme) entitles the Pension Scheme to receive £45.0m in June 2025 and June 2026,
and £55.0m in June 2027 and June 2028. From June 2029 to June 2035 the Pension
Scheme is entitled to receive either £55.0m or £nil, depending on the funding level of
the Pension Scheme as at the latest reporting date. Under certain circumstances these
amounts may be retained in the Partnership, with the distribution determined by the
future funding position of the pension scheme.
The Partnership liability in relation to the first interest of £nil (last year: £88.8m) was
included as a financial liability in the Group’s financial statements as it was a transferable
financial instrument and measured at amortised cost, being the net present value of the
future expected distributions from the Partnership. During the year to 29 March 2025 an
interest charge of £1.4m (last year: £4.1m) was recognised in the income statement
representing the unwinding of the discount included in this obligation. The first limited
Partnership interest of the Pension Scheme was included within the UK DB Pension
Scheme assets, valued at £nil (last year: £88.5m).
The second Partnership interest was not a transferable financial instrument as the
Scheme Trustee does not have the right to transfer it to any party other than a
successor Trustee. It was therefore not included as a plan asset within the UK DB
Pension Scheme surplus reported in accordance with IAS 19. Similarly, the associated
liability was not included on the Group’s statement of financial position, rather the
annual distribution was recognised as a contribution to the scheme each year.
The third Partnership interest is not a transferable financial instrument as the Scheme
Trustee does not have the right to transfer it to any party other than a successor Trustee.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12 Marks and Spencer Scottish Limited Partnership continued
It is therefore not included as a plan asset within the UK DB Pension Scheme deficit
reported in accordance with IAS 19. Similarly, the associated liability is not included on
the Group’s statement of financial position, rather the annual distribution is recognised
as a contribution to the scheme each year.
13 Share-based payments
This year a charge of £44.4m was recognised for share based payments (last year: £42.3m).
Of the total share-based payments charge, £8.4m (last year: £6.9m) relates to the UK
Save As You Earn Share Option scheme, £15.0m (last year: £18.7m) relates to Performance
Share Plans, £2.8m (last year: £3.2m) relates to Restricted Share Plans, £18.2m relates to
Deferred Share Bonus Schemes (last year: £13.4m) and £nil relates to Republic of Ireland
Save As You Earn Share Option Scheme (last year: charge of £0.1m).
In addition, a charge of £8.0m was recognised in relation to Annual Bonus Schemes
under the Deferred Share Bonus Scheme (last year: £6.0m). The Annual Bonus for
2024/25 is due to be granted in July 2025. Further details of the option and share
schemes that the Group operates are provided in the Remuneration Report.
A. Save As You Earn scheme – £8.4m
The Save As You Earn (SAYE) scheme was approved by shareholders for a further 10 years
at the 2017 Annual General Meeting (AGM). Under the terms of the scheme, the Board
may offer options to purchase ordinary shares in the Company once in each financial
year to those employees who enter into an His Majesty’s Revenue & Customs (HMRC)
approved SAYE savings contract. The scheme allows participants to save up to a maximum
of £500 (last year: £500) each month. The price at which options may be offered is 80%
of the average mid-market price for the three consecutive dealing days preceding the
offer date. The options may normally be exercised during the six-month period after the
completion of the SAYE contract.

| 2025 |  |  | 2024 |
|  | Weighted |  |  | Weighted
| Number of | average | Number of | average
| options | exercise price | options | exercise price
Outstanding at beginning of the year | 46,087,264 | 143.2p | 107,052,423 | 94.3p
Granted | 15,194,241 | 303.0p | 16,992,982 | 204.0p
Exercised | (14,624,581) | 108.0p | (69,4 | 47,176) | 83.7p
Forfeited | (3,573,848) | 191.7p | (4,293,304) | 119.4p
Expired | (650,756) | 93.2p | (4,217,661) | 149.4p
Outstanding at end of year | 42,432,320 | 209.3p | 46,087,26 | 4 | 143.2p
Exercisable at end of year | 1,944,316 | 186.3p |  | 9,196,010 | 83.2p

For SAYE share options exercised during the period, the weighted average share price at
the date of exercise was 299.9p (last year: 238.7p).
The fair values of the options granted during the year have been calculated using the
Black-Scholes model assuming the inputs shown below:

| 2025 | 2024
| 3-year plan | 3-year plan
Grant date | Dec 24 | Dec 23
Share price at grant date | 379p | 255p
Exercise price | 303p | 204p
Option life in years | 3 years | 3 years
Risk-free rate | 4.1% | 3.9%
Expected volatility | 33.5% | 37.6%
Expected dividend yield | 0.9% | 1.2%
Fair value of option | 121p | 87p

Volatility has been estimated by taking the historical volatility in the Company’s share
price over a three-year period.
The resulting fair value is expensed over the service period of three years on the
assumption that 30% (last year: 30%) of options will lapse over the service period as
employees leave the Group.
Outstanding options granted under the UK Employee SAYE Scheme are as follows:

|  |  |  | Weighted average remaining contractual life |
| Number of options |  |  | (years) |
Options granted 1 | 2025 | 2024 | 2025 | 2024 | Option price
February 2020 | — | 17,994 | — | (0.7) | 151p
February 2021 | 32,266 | 11,607,154 | (0.7) | 0.3 | 82p
February 2022 | 1,840,721 | 5,609,211 | 0.3 | 1.3 | 189p
February 2023 | 11,306,393 | 12,381,002 | 1.3 | 2.3 | 99p
February 2024 | 14,687,727 | 16,471,903 | 2.3 | 3.3 | 204p
February 2025 | 14,565,213 | — | 3.3 | — | 303p
| 42,432,320 | 46,087,264 | 2.3 | 2.1 | 209p

1 For the purpose of the above table, the option granted date is the contract start date.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 153
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 Share-based payments continued
B. Performance Share Plan* – £15.0m
The Performance Share Plan (PSP) is the primary long-term incentive plan for approximately
150 of the most senior managers within the Group. It was first approved by shareholders
at the 2005 AGM and again at the 2020 AGM. Under the plan, annual awards, based on a
percentage of salary, may be offered. The extent to which an award vests is measured
over a three-year period against financial targets which for 2024/25 included Earnings
Per Share (EPS), Return on Capital Employed (ROCE), Total Shareholder Return (TSR)
and strategic measures. The value of any dividends earned on the vested shares during
the three years may also be paid on vesting. Further details are set out in the
Remuneration Report. Awards under this plan have been made in each year since 2005.
More information is available in relation to this plan within the Remuneration Report.
During the year, 9,450,064 shares (last year: 13,926,961) were awarded under the plan.
The weighted average fair value of the shares awarded was 289.0p (last year: 192.4p). As
at 29 March 2025, 35,353,856 shares (last year: 41,854,500) were outstanding under the plan.
Movement during the year of share options granted under the PSP Scheme are as follows:

| 2025 | 2024
| Number of | Number of
| options | options
Outstanding at beginning of the year | 41,854,500 | 47,532,523
Granted | 9,450,064 | 13,926,961
Exercised | (12,196,576) | (7,429,851)
Lapsed | (3,754,132) | (12,175,133)
Outstanding at end of year | 35,353,856 | 41,854,500

C. Deferred Share Bonus Plan* – £18.2m
The Deferred Share Bonus Plan (DSBP) was first introduced in 2005/06 as part of the
Annual Bonus Scheme and was approved by shareholders at the 2020 AGM. It may be
operated for approximately 5,040 of the most senior managers within the Group. As
part of the plan, the managers are required to defer a proportion of any bonus paid into
shares which will be held for three years. There are no further performance conditions
on these shares, other than continued employment within the Group and the value of
any dividends earned on the vested shares during the deferred period may also be
paid on vesting. More information is available in relation to this plan within the
Remuneration Report.
During the year, 13,079,225 shares (last year: 18,919,979) have been awarded under the
plan in relation to the annual bonus. As at 29 March 2025, 48,494,977 shares (last year:
40,631,579) were outstanding under the plan.
D. Restricted Share Plan* – £2.8m
The Restricted Share Plan (RSP) was established in 2000 as part of the reward strategy
for retention and recruitment of senior managers who are vital to the success of the
business and the plan was approved by shareholders at the 2020 AGM. The plan
operates for the senior management team. Awards vest at the end of the restricted
period (typically between one and three years) subject to the participant still being in
employment of the Company on the relevant vesting date. The value of any dividends
earned on the vested shares during the restricted period may also be paid on vesting.
More information is available in relation to this plan within the Remuneration Report.
During the year, 1,713,749 shares (last year: 824,300) have been awarded under the plan.
The weighted average fair value of the shares awarded was 340p (last year: 45.9p). As at
29 March 2025, 2,296,945 shares (last year: 3,450,543) were outstanding under the plan.
E. Marks and Spencer Employee Benefit Trust
The Marks and Spencer Employee Benefit Trust (the Trust) holds 40,584,818 (last year:
31,840,513) shares with a book value of £0.4m (last year: £0.3m) and a market value of
£143.9m (last year: £84.4m). These shares were acquired by the Trust in the market and
are shown as a reduction in retained earnings in the consolidated statement of financial
position. Awards are granted to employees at the discretion of Marks and Spencer plc
and the Trust agrees to satisfy the awards in accordance with the wishes of Marks and
Spencer plc under senior executive share schemes. Dividends are waived on all of
these shares.
F. ShareBuy
ShareBuy, the Company’s Share Incentive Plan, enables the participants to buy shares
directly from their gross salary. This scheme does not attract an IFRS 2 charge.
* All awards both this year and last year were conditional shares. For the purposes of calculating the
number of shares awarded, the share price used is the average of the mid-market price for the five
consecutive dealing days preceding the grant date.
Marks and Spencer Group plc Annual Report and Financial Statements 2025154
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 Intangible assets

|  |  |  | Computer |
|  |  |  | software |
|  |  | Computer | under |
| Goodwill | Brands | software | development | Total
| £m | £m | £m | £m | £m
At 1 April 2023 |  |  |  |  |
Cost | 140.6 | 118.7 | 1,612.5 | 92.2 | 1,964.0
Accumulated amortisation, impairments and disposals | (112.2) | (113.7) | (1,542.9) | (32.1) | (1,800.9)
Net book value | 28.4 | 5.0 | 69.6 | 60.1 | 163.1
Year ended 30 March 2024 |  |  |  |  |
Opening net book value | 28.4 | 5.0 | 69.6 | 60.1 | 163.1
Additions | — | — | 1.0 | 68.8 | 69.8
Transfers and reclassifications | — | — | 89.3 | (82.2) | 7.1
Disposals | — | — | (5.6) | — | (5.6)
Amortisation charge | — | (0.7) | (54.0) | — | (54.7)
Exchange difference | — | — | (0.2) | — | (0.2)
Closing net book value | 28.4 | 4.3 | 100.1 | 46.7 | 179.5
At 30 March 2024 |  |  |  |  |
Cost | 140.6 | 118.7 | 1,702.5 | 78.8 | 2,040.6
Accumulated amortisation, impairments and disposals | (112.2) | (114.4) | (1,602.4) | (32.1) | (1,861.1)
Net book value | 28.4 | 4.3 | 100.1 | 46.7 | 179.5
Year ended 29 March 2025 |  |  |  |  |
Opening net book value | 28.4 | 4.3 | 100.1 | 46.7 | 179.5
Additions | — | — | 2.0 | 96.5 | 98.5
Transfers and reclassifications | — | — | 103.4 | (125.9) | (22.5)
Disposals | — | — | (3.3) | — | (3.3)
Amortisation charge | — | (0.7) | (63.8) | — | (64.5)
Exchange difference | — | — | (0.3) | — | (0.3)
Closing net book value | 28.4 | 3.6 | 138.1 | 17.3 | 187.4
At 29 March 2025 |  |  |  |  |
Cost | 140.6 | 118.7 | 1,807.9 | 49.4 | 2,116.6
Accumulated amortisation, impairments and disposals | (112.2) | (115.1) | (1,669.8) | (32.1) | (1,929.2)
Net book value | 28.4 | 3.6 | 138.1 | 17.3 | 187.4

Marks and Spencer Group plc Annual Report and Financial Statements 2025 155
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 Intangible assets continued
Goodwill related to the following assets and groups of cash generating units (CGUs):

|  |  |  |  | Total
| per una | India | Sports Edit | Other | Goodwill
| £m | £m | £m | £m | £m
Net book value at 30 March 2024 and 29 March 2025 | 16.5 | 6.4 | 4.8 | 0.7 | 28.4

Goodwill impairment testing
Goodwill is not amortised but is tested annually for impairment with the recoverable amount being determined from value in use calculations.
The goodwill balance relates to the goodwill recognised on the acquisition of per una £16.5m (last year: £16.5m), India £6.4m (last year: £6.4m), Sports Edit £4.8m (last year: £4.8m)
and other £0.7m (last year: £0.7m).
Goodwill for India is monitored by management at a country level, including the combined retail and wholesale businesses, and has been tested for impairment on that basis.
The per una brand is a definite life intangible asset amortised on a straight-line basis over a period of 15 years. The brand intangible was acquired for a cost of £80.0m and has been
fully amortised. It is held at a net book value of £nil (last year: £nil). The per una goodwill of £16.5m is tested for annually for impairment.
The cash flows used for impairment testing are based on the Group’s latest budget and forecast cash flows, covering a three-year period, which have regard to historical
performance and knowledge of the current market, together with the Group’s views on the future achievable growth and the impact of committed cash flows. The cash flows
include ongoing capital expenditure required to maintain the store network, but exclude any growth capital initiatives not committed.
Cash flows beyond this three-year period are extrapolated using a long-term growth rate based on the Group’s current view of achievable long-term growth. The Group’s current
view of achievable long-term growth for per una is 2.0% (last year: 2.0%), which is the same as the overall Group long-term growth rate of 2.0% (last year: 2.0%). The Group’s current
view of achievable long-term growth for India is 5.5% (last year: 5.5%).
Management estimates discount rates that reflect the current market assessment of the time value of money and the risks specific to each asset or CGU. The pre-tax discount rates
are derived from the Group’s post-tax weighted average cost of capital (“WACC”) which has been calculated using the capital asset pricing model, the inputs of which include a
country risk-free rate, equity risk premium, Group size premium and a risk adjustment (beta). The post-tax WACC is subsequently grossed up to a pre-tax rate and was 14.5% for per
una (last year: 13.5%) and 16.7% for India (last year: 16.1%).
The immediately quantifiable impacts of climate change and costs expected to be incurred in connection with our net zero commitments, are included within the Group’s budget
and three-year plan which have been used to support the impairment reviews, with no material impact on cash flows.
Management has performed sensitivity analysis on the key assumptions in the impairment model using reasonably possible changes in these key assumptions, both individually
and in combination. Management has considered reasonably possible changes in key assumptions that would cause the carrying amounts of goodwill or brands to exceed the value
in use for each asset. For both per una and India respectively, there are no reasonably possible changes in key assumptions that would lead to an impairment and the assumptions
do not give rise to a key source of estimation uncertainty.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 Property, plant and equipment
The Group’s property, plant and equipment of £5,408.5m (last year: £5,190.1m) consists
of owned assets of £3,910.9m (last year: £3,760.8m) and right-of-use assets of £1,497.6m
(last year: £1,429.3m).
Property, plant and equipment – owned

|  | Fixtures, | Assets in the |
| Land and | fittings and | course of |
| buildings | equipment | construction | Total
| £m | £m | £m | £m
At 1 April 2023 |  |  |  |
Cost | 2,911.4 | 5,532.3 | 160.6 | 8,604.3
Accumulated depreciation, impairments and disposals | (843.8) | (3,994.6) | (18.2) | (4,856.6)
Net book value | 2,067.6 | 1,537.7 | 142.4 | 3,747.7
Year ended 30 March 2024 |  |  |  |
Opening net book value | 2,067.6 | 1,537.7 | 142.4 | 3,747.7
Additions | 3.4 | 26.9 | 313.3 | 343.6
Transfers and reclassifications | 10.3 | 304.9 | (324.0) | (8.8)
Disposals | (46.5) | (1.6) | (1.1) | (49.2)
Impairment reversals | 19.2 | 12.8 | — | 32.0
Impairment charge | (9.1) | (14.9) | — | (24.0)
Depreciation charge | (32.5) | (242.3) | — | (274.8)
Exchange difference | (3.5) | (2.1) | (0.1) | (5.7)
Closing net book value | 2,008.9 | 1,621.4 | 130.5 | 3,760.8
At 30 March 2024 |  |  |  |
Cost | 2,852.7 | 5,709.5 | 148.8 | 8,711.0
Accumulated depreciation, impairments and disposals | (843.8) | (4,088.1) | (18.3) | (4,950.2)
Net book value | 2,008.9 | 1,621.4 | 130.5 | 3,760.8

|  | Fixtures, | Assets in the |
| Land and | fittings and | course of |
| buildings | equipment | construction | Total
| £m | £m | £m | £m
Year ended 29 March 2025 |  |  |  |
Opening net book value | 2,008.9 | 1,621.4 | 130.5 | 3,760.8
Additions | 5.1 | 27.7 | 457.8 | 490.6
Transfers and reclassifications | 33.9 | 302.3 | (315.1) | 21.1
Disposals | (33.8) | (29.8) | — | (63.6)
Impairment reversals | 8.5 | 10.9 | — | 19.4
Impairment charge | (33.3) | (14.7) | — | (48.0)
Depreciation charge | (7.9) | (257.4) | — | (265.3)
Exchange difference | (2.5) | (1.6) | — | (4.1)
Closing net book value | 1,978.9 | 1,658.8 | 273.2 | 3,910.9
At 29 March 2025 |  |  |  |
Cost | 2,786.4 | 5,745.8 | 292.5 | 8,824.7
Accumulated depreciation, impairments and disposals | (807.5) | (4,088.0) | (18.3) | (4,913.8)
Net book value | 1,978.9 | 1,657.8 | 274.2 | 3,910.9

Disposals in the year include assets with gross book value of £388.7m (last year: £216.1m) .
Marks and Spencer Group plc Annual Report and Financial Statements 2025 157
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 Property, plant and equipment continued
Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

|  | Fixtures, |
| Land and | fittings and |
| buildings | equipment | Total
Right-of-use assets | £m | £m | £m
At 1 April 2023 | 1,389.8 | 66.2 | 1,456.0
Additions | 161.1 | 15.0 | 176.1
Transfers and reclassifications | 1.7 | — | 1.7
Disposals | (17.6) | — | (17.6)
Impairment reversals | 13.6 | — | 13.6
Impairment charge | (21.7) | — | (21.7)
Depreciation charge | (148.8) | (23.3) | (172.1)
Exchange difference | (6.6) | (0.1) | (6.7)
At 30 March 2024 | 1,371.5 | 57.8 | 1,429.3
Additions | 215.3 | 44.7 | 260.0
Transfers and reclassifications | 1.5 | — | 1.5
Disposals | (2.7) | — | (2.7)
Impairment reversals | 1.2 | 3.1 | 4.3
Impairment charge | (14.9) | (32.1) | (47.0)
Depreciation charge | (141.0) | (1.0) | (142.0)
Exchange difference | (5.8) | — | (5.8)
At 29 March 2025 | 1,425.1 | 72.5 | 1,497.6

Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes, the Group has determined that each store is a separate CGU, with the exception of Outlet stores, which are considered together as one CGU. Click
& Collect sales are included in the cash flows of the relevant CGU.
Each CGU is tested for impairment at the balance sheet date if any indicators of impairment and impairment reversal have been identified. Stores identified within the Group’s store
estate programme are automatically tested for impairment (see note 5).
The value in use of each CGU is calculated based on the Group’s latest budget and forecast cash flows, covering a three-year period, which have regard to historic performance and
knowledge of the current market, together with the Group’s views on the future achievable growth and the impact of committed initiatives. The cash flows include ongoing capital
expenditure required to maintain the store network, but exclude any growth capital initiatives not committed. Cash flows beyond this three-year period are extrapolated using a
long-term growth rate based on management’s future expectations, with reference to forecast GDP growth. These growth rates do not exceed the long-term growth rate for the
Group’s retail businesses in the relevant territory. If the CGU relates to a store which the Group has identified as part of the store estate programme, the value in use calculated has
been modified by estimation of the future cash flows up to the point where it is estimated that trade will cease and then estimation of the timing and amount of costs associated
with closure detailed fully in note 5.
Marks and Spencer Group plc Annual Report and Financial Statements 2025158
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 Property, plant and equipment continued
Impairment of property, plant and equipment and right-of-use
assetscontinued
The immediately quantifiable impacts of climate change and costs expected to be
incurred in connection with our net zero commitments, are included within the Group’s
budget and three-year plan which have been used to support the impairment reviews,
with no material impact on cash flows. We also expect any potential store
refurbishments to be phased over multiple years and therefore any changes required
due to climate change would not have a material impact in any given year and the
warehouse and support centres are located in areas which we would not expect to be
physically impacted by climate change. As a consequence there has been no material
impact in the forecast cash flows used for impairment testing.
The key assumptions in the value in use calculations are the growth rates of sales and
gross profit margins, changes in the operating cost base, long-term growth rates and
the risk-adjusted pre-tax discount rate. The pre-tax discount rates are derived from the
Group’s weighted average cost of capital, which has been calculated using the capital
asset pricing model, the inputs of which include a country risk-free rate, equity risk
premium, Group size premium and a risk adjustment (beta). The pre-tax discount rates
range from 8.0% to 19.3% (last year: 7.3% to 17.6%). If the CGU relates to a store which the
Group has identified as part of the store estate programme, the additional key
assumptions in the value-in-use calculations are costs associated with closure, the
disposal proceeds from store exits and the timing of the store exits.
Impairments – UK stores excluding the store estate programme
During the year, the Group has recognised an impairment charge of £4.5m and impairment
reversals of £2.5m in property, plant and equipment as a result of UK store impairment
testing unrelated to the store estate programme (last year: impairment charge of £0.5m
and impairment reversals of £31.5m). The impaired stores were impaired to their value in
use recoverable amount of £4.0m, which is their carrying value at year end. The stores with
impairment reversals were written back to the lower of their value in use recoverable
amount, and the carrying value if the impairment had not occurred, of £2.5m. £4.3m (last
year: £nil) of the impairment charge was included in underlying expenses, with a £0.2m
impairment charge and a £2.5m impairment reversal (last year: £0.5m impairment charge
and £31.5m impairment reversal) included in adjusting items.
For UK stores, when considering both impairment charges and reversals, cash flows beyond
the three-year period are extrapolated using the Group’s current view of achievable
long-term growth of 2.0%, adjusted to 0% where management believes the current trading
performance and future expectations of the store do not support the growth rate of 2.0%.
The rate used to discount the forecast cash flows for UK stores is 13.6% (last year: 12.5%).
The cash flows used within the impairment model are based on assumptions which are
sources of estimation uncertainty and small movements in these assumptions could
lead to further impairments. Management has performed sensitivity analysis on the key
assumptions in the impairment model using reasonably possible changes in these key
assumptions across the UK store portfolio.
Neither an increase or reduction in sales of 5% from the three-year plan in year 3, a 250 basis
point increase in the discount rate, a 25 basis point increase or reduction in gross profit
margin from year 3 onwards, result in a significant change to the impairment charge or
impairment reversal, individually or in combination with the other reasonably possible
scenarios considered.
Impairments – store estate programme
During the year, the Group has recognised an impairment charge of £90.5m and
impairment reversals of £21.1m relating to the ongoing store estate programme (last
year: impairment charge of £37.0m and impairment reversals of £14.1m). These stores
were impaired to their value in use recoverable amount of £225.2m, which is their
carrying value at year end. The impairment charge relates to the store closure
programme and has been recognised as part of the £84.4m store estate charge within
adjusting items (see note 5). Impairment reversals predominantly reflect changes to
expected store closure dates and improved trading expectations compared to those
assumed at the end of the prior year end.
Where the planned closure date for a store is outside the three-year plan period, no
growth rate is applied. The rate used to discount the forecast cash flows for UK stores is
8.0% (last year: 7.3%).
As disclosed in the accounting policies (note 1), the cash flows used within the
impairment models for the store estate programme are based on assumptions which
are sources of estimation uncertainty and small movements in these assumptions could
lead to further impairments. Management has performed sensitivity analysis on the key
assumptions in the impairment model using reasonably possible changes in these key
assumptions across the store estate programme.
A delay of 12 months in the date of each store exit would result in a decrease in the
impairment charge of £34.4m.
Neither an increase or decrease of 5% in planned sales in years 2 and 3 (where relevant),
a 250 basis point increase in the discount rate, a 25 basis point reduction in gross profit
margin during the period of trading nor a 2% increase in the costs associated with exiting
a store would result in a significant increase to the impairment charge, individually or in
combination with the other reasonably possible scenarios considered.
Impairments – International stores
During the year the Group recognised an impairment charge of £nil (last year: £0.7m) in
International stores as a result of store impairment testing.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 159
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 Other financial assets

| 2025 | 2024
| £m | £m
Non-current |  |
Other investments¹ | 21.3 | 12.6
| 21.3 | 12.6
Current |  |
Other investments 2, 3 | 286.5 | 12.3
Unlisted Investments | 3.0 | —
| 289.5 | 12.3

1 Includes £11.6m (last year £9.4m) of venture capital investments managed by True Capital Limited and
£9.7m (last year £nil) of Eurochange RCF figure. See note 21 for further details.
2 Includes £5.3m (last year £4.7m) of money market deposits held by Marks and Spencer plc in an escrow
account.
3 Includes £274.5m of money market funds due to mature >90 days .
17 Trade and other receivables

| 2025 | 2024
| £m | £m
Non-current |  |
Lease receivables – net of provision for impairment | 63.7 | 62.0
Other receivables | 27.1 | 1.9
Loans to related parties (see note 28) | 100.7 | 92.2
Prepayments | 191.3 | 200.6
| 382.8 | 356.7
Current |  |
Trade receivables | 140.6 | 137. 2
Less: provision for impairment of receivables | (0.9) | (1.3)
Trade receivables – net | 139.7 | 135.9
Lease receivables – net of provision for impairment | 0.4 | 1.0
Other receivables | 39.1 | 37.0
Prepayments | 127.1 | 109.0
Accrued income | 21.2 | 19.1
| 327.5 | 302.0

The directors consider that the carrying amount of trade and other receivables
approximates their fair value. The Group’s assessment of any expected credit losses is
included in note 21b. Included in accrued income is £9.2m (last year: £6.0m) of accrued
supplier income relating to rebates that have been earned but not yet invoiced. An
immaterial amount of supplier income that has been invoiced but not yet settled
against future trade creditor balances is included within trade creditors, where there is a
right to offset.
The Group entered into finance leasing arrangements as a lessor for surplus office
space in the Merchant Square building in London, which is sub-let for the remaining
duration of the lease.
The maturity analysis of the Group’s lease receivables is as follows:

| 2025 | 2024
| £m | £m
Timing of cash flows |  |
Within one year | 6.1 | 4.7
Between one and two years | 7.8 | 6.1
Between two and three years | 7.8 | 7.8
Between three to four years | 7.8 | 7.8
Between four to five years | 9.4 | 7.8
More than five years | 96.1 | 105.5
Total undiscounted cash flows | 135.0 | 139.7
Effect of discounting | (56.7) | (62.5)
Present value of lease payments receivable | 78.3 | 77.2
Less: provision for impairment of receivables | (14.2) | (14.2)
Net investment in the lease | 64.1 | 63.0

Included within trade and other receivables is £1.6m (last year: £1.3m) which, due to
non-recourse factoring arrangements in place, are held within a ‘hold to collect and sell’
business model and are measured at FVOCI.
18 Cash and cash equivalents
Cash and cash equivalents are £864.5m (last year: £1,022.4m). The carrying amount of
these assets approximates their fair value.
The effective interest rate on short-term bank deposits is 4.6% (last year: 5.3%). These
deposits have an average maturity of 23 days (last year: 15 days).
Marks and Spencer Group plc Annual Report and Financial Statements 2025160
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19 Trade and other payables

| 2025 | 2024
| £m | £m
Current |  |
Trade payables | 796.3 | 762.3
Other payables | 579.3 | 363.5
Social security and other taxes | 83.6 | 80.1
Contract liabilities from gift card sales | 215.1 | 203.2
Accruals | 653.1 | 648.9
Deferred income | 42.9 | 49.9
| 2,370.3 | 2,107.9
Non-current |  |
Other payables | 1.1 | 103.6
Deferred income | 17.8 | 13.1
| 18.9 | 116.7

Included within current other payables is £110.1m (last year: £6.9m) of deferred and
contingent consideration and within non-current other payables £nil (last year: £102.2m)
of deferred and contingent consideration, both relating to the acquisition of Gist
Limited. See note 21(d) for further details.
A contract liability arises in respect of gift cards and voucher schemes as payment has
been received for a performance obligation which will be performed at a later point
in time.

| 2025 | 2024
| £m | £m
Opening balance | 203.2 | 189.2
Issues | 461.1 | 456.7
Released to the income statement in respect of gift cards and vouchers issued before 30 March 2024 | (128.2) | (128.7)
Released to the income statement in respect of gift cards and vouchers issued after 30 March 2024 | (321.0) | (314.0)
Closing balance | 215.1 | 203.2

The Group has entered supplier finance arrangements that permit the suppliers to
obtain payment from the banks for the amounts billed up to 75 days before the invoice
due date subject to a discount dependent upon market interest rates and the
outstanding period until the invoice falls due.
The Group repays the banks the full invoice amount on the scheduled payment date as
required by the invoice. As the arrangements do not permit the Group to extend finance
from the banks by paying them later than the Group would have paid its suppliers, the
Group considers amounts payable to the banks should be presented as part of trade
and other payables.
As at 29 March 2025, £360.3m (last year: £284.1m) of trade payables were amounts owed
under these arrangements. During the year, the maximum facility available at any one
time under the arrangements was £533.5m (last year: £441.4m).

| 2025 | 2024
| £m | £m
% of trade payables that were amounts owed under supplier |  |
finance arrangements | 45% | N/A
Carrying amount of the financial liabilities that are subject to supplier finance arrangements |  |
Presented as part of ‘Trade payables’, including: | 360.3 | 284.1
Trade payables for which suppliers have already received |  |
payment from the finance provider | 313.5 | N/A
Range of payment due dates | Days |
For liabilities presented as part of ‘Trade payables’: |  |
Liabilities that are part of supplier finance arrangements | 28 – 75 | N/A
Comparable trade payables that are not part of supplier |  |
finance arrangements | 28 – 75 | N/A

Changes in liabilities that are subject to supplier finance arrangements are primarily
attributable to additions resulting from purchases of goods and services and subsequent
cash settlements. There were no material non-cash changes in these liabilities.
The Group does not face a significant liquidity risk as a result of its supplier finance
arrangements as the arrangements do not result in a change in payment terms
for suppliers.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 161
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
20 Borrowings and other financial liabilities

| 2025 | 2024
| £m | £m
Current |  |
Lease liabilities | 228.0 | 220.3
4.75% £400m Medium-Term Notes 2025 1,2 | 105.7 | —
Interest accrued on Medium-Term Notes | 22.1 | 30.1
| 355.8 | 250.4
Non-current |  |
4.75% £400m Medium-Term Notes 2025 1,2 | — | 205.6
3.75% £300m Medium-Term Notes 2026 1 | 109.2 | 200.8
3.25% £250m Medium-Term notes 2027 1 | 249.3 | 248.9
7.125% US$300m Medium-Term notes 2037 3,4 | 252.0 | 251.8
Revaluation of Medium-Term Notes 5 | (21.2) | (15.5)
Lease liabilities | 1,999.4 | 1,991.2
| 2,588.7 | 2,882.8
Total | 2,944.5 | 3,133.2

1 These notes are issued under Marks and Spencer plc’s £3bn Euro Medium-Term Note programme and
all pay interest annually.
2 The Group occasionally enters into interest rate swaps to manage interest rate exposure. At year end,
£0.2m (last year: £2.1m) of fair value adjustment for terminated hedges to be amortised over the
remaining debt maturity.
3 Interest on these bonds is payable biannually.
4 US$300m Medium-Term Note exposure swapped to sterling (fixed-to-fixed cross-currency interest
rate swaps). Refer to note 21 for further details.
5 Revaluation consists of cumulative foreign exchange gain on revaluation of the 7.125% US$300m
Medium-Term Notes 2037 of £21.2m (last year: £15.5m).
Leases
The Group leases various stores, offices, warehouses and equipment with varying terms,
escalation clauses and renewal rights.
The Group has certain leases with lease terms of 12 months or less and leases of assets
with low values. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’
recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements during
the period.

| 2025 | 2024
| £m | £m
Opening lease liabilities | 2,211.5 | 2,281.6
Additions | 261.0 | 176.0
Interest expense relating to lease liabilities | 120.1 | 120.0
Payments | (343.0) | (345.5)
Disposals | (14.6) | (12.8)
Exchange difference | (7.6) | (7.8)
| 2,227.4 | 2,211.5
Current | 228.0 | 220.3
Non-current | 1,999.4 | 1,991.2

The maturity analysis of lease liabilities is disclosed in note 21(a).
Future cash outflows related to the post-break clause period included in
the lease liability
The Group holds certain leases that contain break clause options to provide operational
flexibility. In accordance with IFRS 16, the Group has calculated the full lease term,
beyond break, to represent the reasonably certain lease term (except for those stores
identified as part of the store estate programme) within the total £2,227.4m of lease
liabilities held on the balance sheet.
The following amounts were recognised in profit or loss:

| 2025 | 2024
| £m | £m
Expenses relating to short-term leases | 13.4 | 15.5
Expenses relating to low-value assets | 0.1 | 0.1
Expenses relating to variable consideration | 5.9 | 5.8

21 Financial instruments
Treasury policy
The Group operates a centralised treasury function to manage the Group’s funding
requirements and financial risks in line with the Board-approved treasury policies and
procedures, and their delegated authorities.
The Group’s financial instruments, other than derivatives, comprise borrowings, cash
and liquid resources and various items such as trade receivables and trade payables
that arise directly from its operations. The main purpose of these financial instruments
is to finance the Group’s operations.
Marks and Spencer Group plc Annual Report and Financial Statements 2025162
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Treasury policy continued
The Group treasury function also enters into derivative transactions, principally cross-currency swaps and forward currency contracts. The purpose of these transactions is to
manage the interest rate and foreign currency risks arising from the Group’s operations and financing.
It remains the Group’s policy not to hold or issue financial instruments for trading purposes, except where financial constraints necessitate the need to liquidate any outstanding
investments. The treasury function is managed as a cost centre and does not engage in speculative trading.
Financial risk management
The principal financial risks faced by the Group are liquidity and funding, counterparty, foreign currency and interest rate risks. The policies and strategies for managing these risks
are summarised on the following pages:
(a) Liquidity & funding risk
The risk that the Group could be unable to settle or meet its obligations as they fall due:
•
The Group’s funding strategy ensures a mix of funding sources offering sufficient headroom, maturity and flexibility, and cost-effectiveness to match the requirements of the Group.
•
Marks and Spencer plc is financed by a combination of retained profits, bank borrowings, Medium-Term Notes and committed syndicated bank facilities.
•
Operating subsidiaries are financed by a combination of retained profits, bank borrowings and intercompany loans.
The Group has a committed syndicated bank revolving credit facility of £850.0m with a current maturity date of 13 June 2027. The facility contains a financial covenant, being the
ratio of earnings before interest, tax, depreciation and amortisation; to net interest and depreciation on right-of-use assets under IFRS 16. The covenant is measured biannually. The
Group was not in breach of this metric at the reporting date.
The revolving credit facility includes four sustainability metrics where the margin payable on the facility is adjusted to reflect the Group’s performance against ESG targets material
to the Group’s Plan A objectives. Any adjustment to the margin relating to these metrics would not be material to the Group.
The Group also has a number of uncommitted facilities available to it. At year end, these amounted to £25.0m (last year: £25.0m), all of which are due to be reviewed within a year. At
the balance sheet date, a sterling equivalent of £nil (last year: £nil) was drawn under the committed facilities and £nil (last year: £nil) was drawn under the uncommitted facilities.
In addition to the existing borrowings, the Group has a Euro Medium-Term Note programme of £3bn, of which £0.5bn (last year: £0.7bn) was in issuance as at the balance sheet date.
The initial rate of interest is fixed at the date of issue and the Notes are referred to as fixed rate borrowings throughout the Annual Report as the coupon does not change with
movements in benchmark interest rates. However, the rate of interest on certain Notes varies both up and down in response to third-party credit ratings (to above/below Baa3 or
above/below BBB-) that reflect the relative deterioration or improvement in the Group’s cost of credit and the interest payable on these Notes increases or decreases from the next
interest payment date following a relevant credit rating downgrade or upgrade. As the original contractual terms of these Notes provide for changes in cash flows to be reset to
reflect the relative deterioration or improvement in the Group’s cost of credit, the Group considers these Notes to be floating rate instruments when determining amortised cost
under IFRS 9 and consequently the Group applied IFRS 9 paragraph B5.4.5, which requires no adjustment to the carrying amount of the liabilities or immediate impact on profit and
loss. If the Group had determined these Notes to be fixed rate instruments, the Notes would be remeasured to reflect the revised cash flows discounted at the original effective
rate. This would result in a higher initial interest expense to profit or loss, offset by lower interest charges subsequently, when compared to the Group’s treatment.
Ocado Retail Limited, an associate of the Group, entered into a £30.0m revolving credit facility on 9 May 2024, of which £nil was drawn at 29 March 2025. The Group, along with
Ocado Group plc, jointly guarantee the facility. Last year, the facility had expired.
The table below summarises the contractual maturity of the Group’s non-derivative financial liabilities and derivatives translated at the year end spot rate, excluding trade
payables, other payables and accruals. The carrying value of all trade payables, other payables (excluding contingent consideration payable) and accruals of £1,919.7m (last year:
£1,769.2m) is equal to their contractual undiscounted cash flows (see note 19) which are due within one year. Contingent consideration (see the fair value hierarchy section within
note 21) and deferred consideration of £110.1m (last year: £6.9m) is expected to become payable within one year and £nil (last year: £102.2m) between two and five years.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 163
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
(a) Liquidity & funding risk continued

|  |  | Partnership |  |  |  |
|  |  | liability to |  |  |  |
|  |  | the Marks | Total |  |  |
|  |  | & Spencer | borrowings |  |  |
|  |  | UK Pension | and other |  | Cash outflow | Total
| Medium-Term | Lease | Scheme | financial | Cash inflow on | on | derivative
| Notes | liabilities 1 | (note 12) | liabilities | derivatives 2 | derivatives 2 | liabilities
| £m | £m | £m | £m | £m | £m | £m
Timing of cash flows |  |  |  |  |  |  |
Within one year | (47.9) | (331.2) | (89.7) | (468.8) | 1,334.7 | (1,355.6) | (20.9)
Between one and two years | (251.6) | (317.0) | — | (568.6) | 83.7 | (84.1) | (0.4)
Between two and five years | (532.3) | (742.7) | — | (1,275.0) | 50.7 | (51.1) | (0.4)
More than five years | (389.6) | (2,847.7) | — | (3,237.3) | 389.6 | (406.2) | (16.6)
Total undiscounted cash flows | (1,221.4) | (4,238.6) | (89.7) | (5,549.7) | 1,858.7 | (1,897.0) | (38.3)
Effect of discounting | 299.7 | 2,027.1 | 0.9 | 2, 327.7 |  |  |
At 30 March 2024 | (921.7) | (2,211.5) | (88.8) | (3,222.0) |  |  |
Timing of cash flows |  |  |  |  |  |  |
Within one year | (143.7) | (291.7) | — | (435.4) | 1,449.1 | (1,464.5) | (15.4)
Between one and two years | (141.2) | (286.6) | — | (427.8) | 254.3 | (261.4) | (7.1)
Between two and five years | (310.8) | (614.7) | — | (925.5) | 49.5 | (51.1) | (1.6)
More than five years | (363.9) | (2,689.7) | — | (3,053.6) | 363.8 | (389.2) | (25.4)
Total undiscounted cash flows | (959.6) | (3,882.7) | — | (4,842.3) | 2,116.7 | (2,166.2) | (49.5)
Effect of discounting | 242.5 | 1,655.3 | — | 1,897.8 |  |  |
At 29 March 2025 | (717.1) | (2,227.4) | — | (2,944.5) |  |  |

1 Total undiscounted lease payments of £699.6m relating to the period post-break clause and the earliest contractual lease exit point, are included in lease liabilities. These undiscounted lease payments should be
excluded when determining the Group’s contractual indebtedness under these leases, where there is a contractual right to break. Furthermore, £75.9m of these payments relate to leases where, following the break
clause, the Group will have the ability to exit the lease at any point before the lease expiry with a maximum of six months’ notice.
2 Cash inflows and outflows on derivative instruments that require gross settlement (such as cross currency swaps and forward foreign exchange contracts) are disclosed gross. Cash inflows and outflows on
derivative instruments that settle on a net basis are disclosed net .
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21 Financial instruments continued
(b) Counterparty risk
Counterparty risk exists where the Group can suffer financial loss through the default or non-performance of the counterparties with whom it transacts.
Exposures are managed in accordance with the Group treasury policy, which limits the value that can be placed with each approved counterparty to minimise the risk of loss.
The minimum long-term rating for all counterparties is long-term Standard & Poor’s (S&P)/Moody’s A-/A3 (BBB+/Baa1 for committed lending banks). In the event of a rating by one
agency being different from the other, the lower rating is used. Limits are reviewed regularly by senior management. The credit risk of these financial instruments is estimated as
the fair value of the assets resulting from the contracts.
The table below analyses the Group’s short-term investments and derivative assets by credit exposure, excluding bank balances, store cash and cash in transit.

|  |  |  |  | Credit rating of counterparty |  |  |  |
| AAA | AA+ | AA | AA- | A+ | A | A- | BBB | Total
| £m | £m | £m | £m | £m | £m | £m | £m | £m
Cash and cash equivalents 1 | 116.7 | — | — | 130.9 | 242.2 | 95.6 | 197.2 | — | 782.6
Other Investments 2 | — | — | — | 3.0 | 8.0 | 1.3 | — | — | 12.3
Derivative assets 3 | — | — | — | 0.9 | 6.0 | 0.3 | 0.2 | 0.1 | 7.5
At 30 March 2024 | 116.7 | — | — | 134.8 | 256.2 | 97.2 | 197.4 | 0.1 | 802.4
| AAA | AA+ | AA | AA— | A+ | A | A— | BBB | Total
| £m | £m | £m | £m | £m | £m | £m | £m | £m
Cash and cash equivalents 1 | 98.0 | — | — | 111.6 | 203.2 | 240.6 | 0.8 | — | 654.2
Other Investments 2 | — | — | — | 146.9 | 49.7 | 89.9 | — | — | 286.5
Derivative assets 3 | — | — | — | 2.4 | 3.3 | 1.2 | — | 0.4 | 7.3
At 29 March 2025 | 98.0 | — | — | 260.9 | 256.2 | 331.7 | 0.8 | 0.4 | 948.0

1 Includes cash on deposit and money market funds held by various group entities. Excludes cash in hand and in transit of £210.3m (last year: £239.8m).
2 Relates to money market deposits held by various group entities.
3 Standard & Poor’s equivalent rating shown as reference to the majority credit rating of the counterparty from either Standard & Poor’s, Moody’s or Fitch where applicable.
The Group has a very low retail credit risk due to transactions principally being of high volume, low value and short maturity.
The maximum exposure to credit risk at the balance sheet date was as follows: trade receivables £140.6m (last year: £137.2m), lease receivables £64.1m (last year: £63.0m), other
receivables (including loans to related parties) £166.9m (last year: £131.1m), cash and cash equivalents £864.5m (last year: £1,022.4m) and derivatives £7.3m (last year: £7.5m).
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21 Financial instruments continued
Impairment of financial assets
The credit risk management practices of the Group include internal review and reporting of the ageing of trade and other receivables by days past due by a centralised accounts
receivable function and grouped by respective contractual revenue stream, along with liaison with the debtors by the credit control function.
The Group applies the IFRS 9 simplified approach in measuring expected credit losses which use a lifetime expected credit loss allowance for all trade receivables and lease receivables.
To measure expected credit losses, trade receivables have been grouped by shared credit risk characteristics along the lines of differing revenue streams such as international
franchise, UK franchise, food, corporate and sundry, as well as by geographical location and days past due. In addition to the expected credit losses calculated using a provision
matrix, the Group may provide additional provision for the receivables of particular customers if the deterioration of financial position was observed. The Group’s trade receivables
are of very low credit risk due to transactions being principally of high volume, low value and short maturity. Therefore, it also has very low concentration risk.
The expected loss rates are determined based on the average write-offs as a proportion of average debt over a period of 36 months prior to the reporting date. The historical loss
rates are adjusted for current and forward-looking information where significant. The Group considers GDP growth, unemployment, sales growth and bankruptcy rates of the
countries in which goods are sold to be the most relevant factors and, where the impact of these is significant, adjusts the historical loss rates based on expected changes in
these factors.
Historical experience has indicated that debts aged 180 days or over are generally not recoverable. The Group has incorporated this into the expected loss model through a uniform
loss rate for ageing buckets below 180 days dependent on the revenue stream and country and providing for 100% of debt aged more than 180 days past due. Where the Group
specifically holds insurance or holds the legal right of offset with debtors which are also creditors, the loss provision is applied only to the extent of the uninsured or net exposure.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there may be no reasonable expectation of recovery include the failure of the
debtor to engage in a payment plan and failure to make contractual payments within 180 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit and subsequent recoveries are credited to the same line item.

|  | Up to 30 days | 31-60 days | 61-90 days | 91-180 days | 181 days or |
| Current | past due | past due | past due | past due | more past due | Total
30 March 2024 | £m | £m | £m | £m | £m | £m | £m
Gross carrying amount – trade receivables | 119.3 | 9.3 | 4.3 | 0.7 | 3.1 | 0.5 | 137. 2
Expected loss rate | 0.1% | 0.8% | 4.5% | 8.9% | 11.0% | 100.0% | 0.9%
Lifetime expected credit loss | 0.1 | 0.1 | 0.2 | 0.1 | 0.3 | 0.5 | 1.3
Net carrying amount | 119.2 | 9.2 | 4.1 | 0.6 | 2.8 | — | 135.9

|  | Up to 30 days | 31-60 days | 61-90 days | 91-180 days | 181 days or |
| Current | past due | past due | past due | past due | more past due | Total
29 March 2025 | £m | £m | £m | £m | £m | £m | £m
Gross carrying amount – trade receivables | 127.8 | 5.2 | 3.3 | 3.3 | 1.0 | — | 140.6
Expected loss rate | 0.7% | 0.6% | 0.1% | 0.2% | 0.2% | 100.0% | 0.6%
Lifetime expected credit loss | 0.9 | — | — | — | — | — | 0.9
Net carrying amount | 126.9 | 5.2 | 3.3 | 3.3 | 1.0 | — | 139.7

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21 Financial instruments continued
Impairment of financial assets continued
The closing loss allowances for trade receivables reconciles to the opening loss
allowances as follows:

| 2025 | 2024
Trade receivables expected loss provision | £m | £m
Opening loss allowance | 1.3 | 5.4
Decrease in loss allowance recognised in profit and loss during the year | — | (2.3)
Receivables written off during the year as uncollectable | (0.4) | (1.8)
Closing loss allowance | 0.9 | 1.3

The closing loss allowances for lease receivables reconciles to the opening loss
allowances as follows:

| 2025 | 2024
Lease receivables expected loss provision | £m | £m
Opening loss allowance | 14.2 | 10.7
Increase in loss allowance recognised in profit and loss during the year 1 | — | 3.5
Closing loss allowance | 14.2 | 14.2

1 Relates to the sub-let of previously closed offices associated with the strategic programme to
centralise the Group’s London Head Office functions (see note 17).
The provision for other receivables is highly immaterial (it can be quantified) and
therefore no disclosure is provided.
(c) Foreign currency risk
Transactional foreign currency exposure arises primarily from the import of goods
sourced from overseas suppliers and also from the export of goods from the UK to
overseas subsidiaries. The most significant exposure is to the US dollar, incurred in the
sourcing of Fashion, Home & Beauty products from Asia.
Group Treasury hedges these Fashion, Home & Beauty foreign currency exposures
principally using forward foreign exchange contracts progressively based on dynamic
forecasts from the business. Hedging is generally carried out in the six months before
the period when purchase orders are entered into.
Other exposures arising from the export of goods to overseas subsidiaries are also
hedged progressively over the course of the year before they are incurred. As at the
balance sheet date, the gross notional value in sterling terms of forward foreign
exchange sell or buy contracts amounted to £2,210.6m (last year: £2,011.0m) with
a weighted average maturity date of seven months (last year: seven months).
Gains and losses in equity on forward foreign exchange contracts designated in cash
flow hedge relationships as at 29 March 2025 will be reclassified to the income statement
at various dates over the following 14 months (last year: 14 months) from the balance
sheet date.
The foreign exchange forwards are designated as cash flow hedges of highly probable
forecast transactions. Both spot and forward points are designated in the hedge
relationship; under IFRS 9 the currency basis spread may be excluded from the hedge
relationship and recognised in other comprehensive income – cost of hedging reserve.
The change in the fair value of the hedging instrument, to the degree effective, is
deferred in equity and subsequently either reclassified to profit or loss or removed from
equity and included in the initial cost of inventory as part of the “basis adjustment”.
This will be realised in the income statement once the hedged item is sold. The Group
has considered and elected not to recognise the currency basis spread element in the
cost of hedging reserve, owing to the relatively short-dated nature of the hedging
instruments.
The Group regularly reviews the foreign exchange hedging portfolio to confirm whether
the underlying transactions remain highly probable. Any identified instance of over-hedging
or ineffectiveness would result in immediate recycling to the income statement.
A change in the timing of a forecast item does not disqualify a hedge relationship nor
the assertion of “highly probable” as there remains an economic relationship between
the underlying transaction and the derivative.
The foreign exchange forwards are recognised at fair value. The Group has considered
and elected to apply credit/debit valuation adjustments. The risks at the reporting date
are representative of the financial year.
The Group also holds a number of cross-currency swaps to designate its fixed rate US
dollar debt to fixed rate sterling debt. These are reported as cash flow hedges. The
change in the fair value of the hedging instrument, to the degree effective, is retained
in other comprehensive income, segregated by cost and effect of hedging. Under IFRS 9,
the currency basis on the cross-currency swaps is excluded from the hedge designation
and recognised in other comprehensive income – cost of hedging reserve. Effectiveness
is measured using the hypothetical derivative approach. The contractual terms of the
cross-currency swaps include break clauses every five years which allow for the interest
rates to be reset (last reset November 2022).
The cross-currency swaps are recognised at fair value. The inclusion of credit risk on
cross-currency swaps will cause ineffectiveness of the hedge relationship. The Group
has considered and elected to apply credit/debit valuation adjustments, owing to
the swaps’ relative materiality and longer-dated nature.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
(c) Foreign currency risk continued
The Group also hedges foreign currency intercompany loans where these exist. Forward
foreign exchange contracts in relation to the hedging of the Group’s foreign currency
intercompany loans are classified as fair value through profit and loss. The corresponding
foreign exchange movement of the intercompany loan balance resulted in a £0.6m loss
(last year: £1.1m loss) in the income statement. As at the balance sheet date, the gross
notional value of intercompany loan hedges was £114.5m (last year: £246.7m).
After taking into account the hedging derivatives entered into by the Group, the
currency and interest rate exposure of the Group’s borrowings and other financial
liabilities is set out below:

|  | 2025 |  |  | 2024 |
| Fixed rate | Floating rate | Total | Fixed rate | Floating rate | Total
| £m | £m | £m | £m | £m | £m
Currency |  |  |  |  |  |
Sterling | 2,725.3 | — | 2,725.3 | 2,920.0 | — | 2,920.0
Euro | 117.7 | — | 117.7 | 95.0 | — | 95.0
Rupee | 100.9 | — | 100.9 | 118.0 | — | 118.0
Other | 0.6 | — | 0.6 | 0.2 | — | 0.2
| 2,944.5 | — | 2,944.5 | 3,133.2 | — | 3,133.2

As at the balance sheet date and excluding lease liabilities, post-hedging, the GBP and
USD fixed rate borrowings are at an average rate of 5.4% (last year: 5.3%) and the
weighted average time for which the rate is fixed is five years (last year: five years).
(d) Interest rate risk
The Group is exposed to interest rate risk in relation to sterling, US dollar and euro variable
rate financial assets and liabilities.
The Group’s policy is to use derivative contracts where necessary to maintain a mix of
fixed and floating rate borrowings to manage this risk. The structure and maturity of
these derivatives correspond to the underlying borrowings and are accounted for as fair
value or cash flow hedges as appropriate.
At the balance sheet date, fixed rate borrowings amounted to £2,944.5m (last year:
£3,133.2m) representing the public bond issues and lease liabilities, amounting to 100%
(last year: 100%) of the Group’s gross borrowings.
The effective interest rates at the balance sheet date were as follows:

| 2025 | 2024
| % | %
Committed and uncommitted borrowings | N/A | N/A
Medium-Term Notes | 5.4% | 5.3%
Leases | 5.7% | 5.2%

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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Derivative financial instruments
The below table illustrates the effects of hedge accounting on the consolidated
statement of financial position and consolidated income statement through detailing
separately by risk category and each type of hedge the details of the associated
hedging instrument and hedged item.

|  |  | 30 March 2024 |
|  | Current |  | Non Current
| Forward foreign | Forward foreign |  | Forward foreign
| exchange | exchange | Cross-currency | exchange
| contracts | contracts | swaps | contracts
| £m | £m | £m | £m
Hedging risk strategy | Cash flow | FVTPL | Cash flow | Cash flow
| hedges |  | hedges | hedges
Notional/currency legs | 1,547.6 | 246.7 | 252.9 | 216.7
Carrying amount assets | 6.6 | 0.2 | — | 0.7
Carrying amount (liabilities) | (18.2) | (1.8) | (21.6) | (0.3)
Maturity date | to Oct 2024 | to Apr 2024 | to Dec 2037 | to Jun 2025
Hedge ratio | 100% | n/a | 100% | 100%
Description of hedged item | Highly | Inter- | USD fixed | Highly
| probable | company | rate | probable
| transactional | loans/ | borrowing | transactional
| FX exposures | deposits |  | FX exposures
Change in fair value of hedging instrument | 17.6 | 0.5 | 18.4 | 2.2
Change in fair value of hedged item used to determine hedge | (17.6) | (1.6) | (18.4) | (2.2)
effectiveness |  |  |  |
Weighted average hedge | GBP/USD 1.25; | — | GBP/USD 1.19 | GBP/USD 1.27;
rate for the year | GBP/EUR 1.14 |  |  | GBP/EUR 1.14
Net amounts recognised | — | (1.1) | — | —
within finance costs in profit |  |  |  |
and loss |  |  |  |
Balance on cash flow hedge | 6.0 | — | 6.1 | (0.5)
reserve at 30 March 2024 |  |  |  |
Balance on cost of hedging | — | — | ( 7.4) | —
reserve at 30 March 2024 |  |  |  |

|  |  | 29 March 2025 |
|  | Current |  | Non Current
| Forward foreign | Forward foreign |  | Forward foreign
| exchange | exchange | Cross-currency | exchange
| contracts | contracts | swaps | contracts
| £m | £m | £m | £m
Hedging risk strategy | Cash flow | FVTPL | Cash flow | Cash flow
| hedges |  | hedges | hedges
Notional/currency legs | 1,791.6 | 113.8 | 252.9 | 305.2
Carrying amount assets | 7.2 | — | — | 0.1
Carrying amount (liabilities) | (24.6) | (0.5) | (10.5) | (6.1)
Maturity date | to Oct 2025 | to Dec 2025 | to Dec 2037 | to May 2026
Hedge ratio | 100% | n/a | 100% | 100%
Description of hedged item | Highly | Inter- | USD fixed | Highly
| probable | company | rate | probable
| transactional | loans/ | borrowing | transactional
| FX exposures | deposits |  | FX exposures
Change in fair value of hedging instrument | 23.5 | 1.1 | (8.5) | 6.4
Change in fair value of hedged item used to determine hedge | (23.5) | (1.7) | 8.5 | (6.4)
effectiveness |  |  |  |
Weighted average hedge | GBP/USD 1.26; | — | GBP/USD 1.19 | GBP/USD 1.28;
rate for the year | GBP/EUR 1.15 |  |  | GBP/EUR 1.16
Amounts recognised within | — | (0.6) | — | —
finance costs in profit and loss |  |  |  |
Balance on cash flow hedge | 11.6 | — | (8.1) | 6.0
reserve at 29 March 2025 |  |  |  |
Balance on cost of hedging | — | — | (9.6) | —
reserve at 29 March 2025 |  |  |  |

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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Derivative financial instruments continued

|  |  | 29 March 2025 |  |  |  | 30 March 2024 |  |
|  | Notional Value |  |  | Fair Value | Notional Value |  |  | Fair Value
|  | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities
|  | £m | £m | £m | £m | £m | £m | £m | £m
Current |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts | – cash flow hedges | 596.6 | 1,195.0 | 7.2 | (24.6) | 501.3 | 1,046.3 | 6.6 | (18.2)
| – FVTPL | 1.0 | 112.8 | — | (0.5) | 60.6 | 186.1 | 0.2 | (1.8)
|  | 597.6 | 1,307.8 | 7.2 | (25.1) | 561.9 | 1,232.4 | 6.8 | (20.0)
Non-current |  |  |  |  |  |  |  |  |
Cross-currency swaps | – cash flow hedges | — | 252.9 | — | (10.5) | — | 252.9 | — | (21.6)
Forward foreign exchange contracts | – cash flow hedges | 67.5 | 237.7 | 0.1 | (6.1) | 149.9 | 66.8 | 0.7 | (0.3)
|  | 67.5 | 490.6 | 0.1 | (16.6) | 149.9 | 319.7 | 0.7 | (21.9)

The Group’s hedging reserves disclosed in the consolidated statement of changes in equity relate to the following hedging instruments:

| Cost of |  | Total cost of | Hedge | Hedge | Hedge |  |
| hedging | Deferred | hedging | reserve FX | reserve | reserve | Deferred | Total hedge
| reserve CCIRS 1 | tax | reserve | derivatives | CCIRS | gilt locks | tax | reserve
| £m | £m | £m | £m | £m | £m | £m | £m
Opening balance at 2 April 2023 | (5.8) | 1.6 | (4.2) | 49.1 | (7.0) | 0.1 | (10.3) | 31.9
Add: Change in fair value of hedging instrument recognised in OCI 2 | — | — | — | 10.7 | 18.4 | — | — | 29.1
Add: Costs of hedging deferred and recognised in OCI | (1.6) | — | (1.6) | — | — | — | — | —
Less: Reclassified to the cost of inventory | — | — | — | (54.4) | — | — | — | (54.4)
Less: Reclassified from OCI to profit or loss | — | — | — | — | (5.3) | — | — | (5.3)
Less: Deferred tax | — | 0.4 | 0.4 | — | — | — | 7.1 | 7.1
Closing balance at 30 March 2024 | (7.4) | 2.0 | (5.4) | 5.4 | 6.1 | 0.1 | (3.2) | 8.4
Opening balance at 31 March 2024 | (7.4) | 2.0 | (5.4) | 5.4 | 6.1 | 0.1 | (3.2) | 8.4
Add: Change in fair value of hedging instrument recognised in OCI | — | — | — | 29.9 | (8.5) | — | — | 21.4
Add: Costs of hedging deferred and recognised in OCI | (2.2) | — | (2.2) | — | — | — | — | —
Less: Reclassified to the cost of inventory | — | — | — | (17.7) | — | — | — | (17.7)
Less: Reclassified from OCI to profit or loss | — | — | — | — | (5.7) | — | — | (5.7)
Less: Deferred tax | — | 0.6 | 0.6 | — | — | — | 1.1 | 1.1
Closing balance at 29 March 2025 | (9.6) | 2.6 | (7.0) | 17.6 | (8.1) | 0.1 | (2.1) | 7.5

1 Cross-currency interest rate swaps
2 Other comprehensive income
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21 Financial instruments continued
Derivative financial instruments continued
The Group holds a number of cross-currency interest rate swaps to designate its USD
to GBP fixed debt. These are reported as cash flow hedges. The ineffective portion
recognised in profit or loss that arises from the cash flow hedge amounts to a £nil gain
(last year: £nil gain) as the loss on the hedged items was £8.5m (last year: £18.4m gain)
and the movement on the hedging instruments was a £8.5m gain (last year: £18.4m loss).

| 2025 | 2024
Movement in hedged items and hedging instruments | £m | £m
Net gain/(loss) in fair value of cross-currency interest rate swap | 8.5 | (18.4)
Net (loss)/gain on hedged items | (8.5) | 18.4
Ineffectiveness | — | —

Sensitivity analysis
The table below illustrates the estimated impact on the income statement and equity as
a result of market movements in foreign exchange and interest rates in relation to the
Group’s financial instruments. The directors consider that a 2% +/- (last year: 2%)
movement in interest and a 20% +/- (last year: 20%) movement in sterling against the
relevant currency represent reasonably possible changes. However, this analysis is for
illustrative purposes only. The directors believe that these illustrative assumed
movements continue to provide sufficient guidance.
The table excludes financial instruments that expose the Group to interest rate and
foreign exchange risk where such a risk is fully hedged with another financial
instrument. Also excluded are trade receivables and payables as these are either
sterling denominated or the foreign exchange risk is hedged.
Interest rates The impact in the income statement due to changes in interest rates
reflects the effect on the Group’s floating rate debt and cash balances as at the balance
sheet date. The impact in equity reflects the fair value movement in relation to the
Group’s cross-currency swaps.
Foreign exchange The impact from foreign exchange movements reflects the change in
the fair value of the Group’s transactional foreign exchange cash flow hedges at the
balance sheet date. The equity impact shown for foreign exchange sensitivity relates to
derivatives. This value is expected to be materially offset by the re-translation of the
related transactional exposures.

|  |  |  | 20%
| 2% decrease in | 2% increase in | 20% weakening | strengthening
| interest rates | interest rates | in sterling | in sterling
| £m | £m | £m | £m
At 30 March 2024 |  |  |  |
Impact on income |  |  |  |
statement: (loss)/gain | (15.0) | 15.0 | — | —
Impact on other comprehensive income: |  |  |  |
(loss)/gain | 5.8 | (4.4) | 278.9 | (278.9)
At 29 March 2025 |  |  |  |
Impact on income |  |  |  |
statement: (loss)/gain | (18.1) | 18.1 | — | —
Impact on other comprehensive income: |  |  |  |
(loss)/gain | 0.2 | (4.9) | 337.7 | (337.7)

Offsetting of financial assets and liabilities
The following tables set out the financial assets and financial liabilities which are
subject to offsetting, enforceable master netting arrangements and similar
agreements. Amounts which are set off against financial assets and liabilities in the
Group’s balance sheet are set out below. For trade and other receivables and trade and
other payables, amounts not offset in the balance sheet but which could be offset
under certain circumstances are also set out. To reconcile the amount shown in the
tables below to the Statement of Financial Position, items which are not subject to
offsetting should be included.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Offsetting of financial assets and liabilities continued

|  |  | Net financial | Related |
|  |  | assets/ | amounts not |
| Gross | Gross | (liabilities) | set off in the |
| financial | financial | per statement | statement of |
| assets/ | (liabilities)/ | of financial | financial |
| (liabilities) | assets set off | position | position | Net
| £m | £m | £m | £m | £m
At 30 March 2024 |  |  |  |  |
Trade and other receivables | 33.1 | (31.2) | 1.9 | — | 1.9
Derivative financial assets | 7.5 | — | 7.5 | (6.7) | 0.8
| 40.6 | (31.2) | 9.4 | (6.7) | 2.7
Trade and other payables | (357.8) | 31.2 | (326.6) | — | (326.6)
Derivative financial liabilities | (41.9) | — | (41.9) | 6.7 | (35.2)
| (399.7) | 31.2 | (368.5) | 6.7 | (361.8)

|  |  | Net financial | Related |
|  |  | assets/ | amounts not |
| Gross | Gross | (liabilities) | set off in the |
| financial | financial | per statement | statement of |
| assets/ | (liabilities)/ | of financial | financial |
| (liabilities) | assets set off | position | position | Net
| £m | £m | £m | £m | £m
At 29 March 2025 |  |  |  |  |
Trade and other receivables | 27.0 | (24.3) | 2.7 | — | 2.7
Derivative financial assets | 7.3 | — | 7.3 | (6.8) | 0.5
| 34.3 | (24.3) | 10.0 | (6.8) | 3.2
Trade and other payables | (416.3) | 24.3 | (392.0) | — | (392.0)
Derivative financial liabilities | (41.7) | — | (41.7) | 6.8 | (34.9)
| (458.0) | 24.3 | (433.7) | 6.8 | (426.9)

Amounts which do not meet the criteria for offsetting on the balance sheet but could be settled net in certain circumstances principally relate to derivative transactions under
International Swaps and Derivatives Association agreements where each party has the option to settle amounts on a net basis in the event of default of the other party.
Marks and Spencer Group plc Annual Report and Financial Statements 2025172
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
•
Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities.
•
Level 2: not traded in an active market but the fair values are based on quoted market prices or alternative pricing sources with reasonable levels of price transparency.
The Group’s Level 2 financial instruments include interest rate and foreign exchange derivatives. Fair value is calculated using discounted cash flow methodology, future cash
flows are estimated based on forward exchange rates and interest rates (from observable market curves) and contract rates, discounted at a rate that reflects the credit risk of
the various counterparties for those with a long maturity.
•
Level 3: techniques that use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
At the end of the reporting period, the Group held the following financial instruments at fair value:

|  | 2025 |  |  | 2024 |  |  |
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total
| £m | £m | £m | £m | £m | £m | £m | £m
Assets measured at fair value |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss (FVTPL) |  |  |  |  |  |  |  |
– derivatives held at FVTPL | — | — | — | — | — | 0.2 | — | 0.2
– other investments 1 | 274.5 | 21.7 | 14.6 | 310.8 | — | 12.3 | 12.6 | 24.9
Derivatives used for hedging | — | 7.3 | — | 7.3 | — | 7.5 | — | 7.5
Liabilities measured at fair value |  |  |  |  |  |  |  |
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |
– derivatives held at FVTPL | — | (0.5) | — | (0.5) | — | (1.8) | — | (1.8)
– Gist contingent consideration 2 | — | — | (25.6) | (25.6) | — | — | (25.6) | (25.6)
Derivatives used for hedging | — | (41.2) | — | (41.2) | — | (40.2) | — | (40.2)

There were no transfers between the levels of the fair value hierarchy during the period. There were also no changes made to any of the valuation techniques during the period.
1 Within Level 1 other investments is £274.5m (last year: £nil) of money market deposits held by various group entities. Within Level 3 other investments, the Group holds £11.6m of venture capital investments,
managed by True Capital Limited, measured at FVTPL (last year: £9.4m) (see note 16) which are Level 3 instruments. The fair value of these investments has been determined in accordance with the International
Private Equity and Venture Capital (IPEV) Valuation Guidelines. Where investments are either recently acquired or there have been recent funding rounds with third parties, the primary input when determining
the valuation is the latest transaction price.
2 As part of the investment in Gist Limited, the Group has agreed to pay the former owners of Gist Limited additional consideration of up to £25.0m plus interest when freehold properties are disposed of under
certain conditions (for other consideration payable please see note 19). There is no minimum amount payable. The Group has the ability to retain the properties should it wish to do so, in which case the full amount
of £25.0m plus interest will be payable on the third anniversary of completion.
The fair value of the contingent consideration arrangement of £25.6m was estimated by calculating the present value of the future expected cash flows. The estimates are based on a discount rate of 5.3%. A 2.5%
change in the discount rate would result in a change in fair value of £0.7m.
The Marks & Spencer UK Pension Scheme holds a number of financial instruments which make up the pension asset of £5,292.8m (last year: £6,108.9m). Level 1 and Level 2 financial
assets measured at fair value through other comprehensive income amounted to £1,754.7m (last year: £2,074.3m). Additionally, the scheme assets include £3,538.1m (last year: £4,034.6m)
of Level 3 financial assets. See note 11 for information on the Group’s retirement benefits.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 173
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 Financial instruments continued
Fair value hierarchy continued
The following table represents the changes in Level 3 instruments held by the
Pension Schemes:

| 2025 | 2024
| £m | £m
Opening balance | 4,034.6 | 4,027.2
Fair value gain/(loss) recognised in other comprehensive income | 53.8 | 362.5
Other movements recognised in profit or loss | (48.5) | —
Cash withdrawals | (501.8) | (355.1)
Closing balance | 3,538.1 | 4,034.6

Fair value of financial instruments
With the exception of the Group’s fixed rate bond debt and the Partnership liability to
the Marks & Spencer UK Pension Scheme (note 12), there were no material differences
between the carrying value of non-derivative financial assets and financial liabilities
and their fair values as at the balance sheet date.
The carrying value of the Group’s fixed rate bond debt (Level 1 equivalent) was £717.1m
(last year: £921.7m); the fair value of this debt was £727.7m (last year: £919.8m) which has
been calculated using quoted market prices and includes accrued interest. The carrying
value of the Partnership liability to the Marks & Spencer UK Pension Scheme (Level 2 equivalent)
is £nil (last year: £88.8m) and the fair value of this liability is £nil (last year: £81.9m).
Capital policy
The Group’s objectives when managing capital are to fund investment in the transformation
and deliver financial performance at an investment grade level, to safeguard its ability to
continue as a going concern in order to provide optimal returns for shareholders and to
maintain an efficient capital structure to reduce the cost of capital.
In doing so, the Group’s strategy is to sustain a capital structure that supports an investment
grade credit rating and to retain appropriate levels of liquidity headroom to ensure financial
stability and flexibility. To achieve this strategy, the Group regularly monitors key credit
metrics such as the gearing ratio, cash flow to net debt and fixed charge cover to maintain
this position. In addition, the Group ensures a combination of appropriate committed
short-term liquidity headroom with a diverse and balanced long-term debt maturity profile
which avoids creating a significant re-financing risk in any one financial period. As at the balance
sheet date, the Group’s average debt maturity profile was five years (last year: five years).
During the year, Moody’s upgraded its credit rating for M&S to Baa3. Standard and Poor’s
maintained its rating at BBB. Both agencies have a stable outlook for the rating.
To manage its capital structure, the Group considers the appropriate level of dividends
paid to shareholders and options to return capital to shareholders, issue new shares or
sell assets to reduce debt.
22 Provisions

| Property | Restructuring | Other | Total
| £m | £m | £m | £m
At 2 April 2023 | 78.8 | 16.9 | 23.7 | 119.4
Provided in the year – charged to profit |  |  |  |
or loss | 54.9 | 25.0 | 6.4 | 86.3
Provided in the year – charged to property, plant & equipment | 5.3 | — | — | 5.3
Released in the year | (24.4) | (9.1) | (9.9) | (43.4)
Utilised during the year | (11.2) | (2.3) | (9.2) | (22.7)
Exchange differences | — | — | 0.2 | 0.2
Discount rate unwind | 6.6 | — | — | 6.6
At 30 March 2024 | 110.0 | 30.5 | 11.2 | 151.7
Analysed as: |  |  |  |
Current |  |  |  | 47.6
Non-current |  |  |  | 104.1

| Property | Restructuring | Other | Total
| £m | £m | £m | £m
At 31 March 2024 | 110.0 | 30.5 | 11.2 | 151.7
Provided in the year – charged to profit |  |  |  |
or loss | 22.0 | 16.8 | 8.4 | 47.2
Provided in the year – charged to property, plant & equipment | 46.1 | — | — | 46.1
Released in the year | (38.6) | (13.3) | (5.5) | (57.4)
Utilised during the year | (6.5) | (14.6) | (1.6) | (22.7)
Discount rate unwind | 6.4 | — | — | 6.4
At 29 March 2025 | 139.4 | 19.4 | 12.5 | 171.3
Analysed as: |  |  |  |
Current |  |  |  | 25.1
Non-current |  |  |  | 146.2

Marks and Spencer Group plc Annual Report and Financial Statements 2025174
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 Provisions continued
Property provisions relate primarily to obligations such as dilapidations, arising as a result of the closure of stores as part of the store estate strategic programme. These provisions
are expected to be utilised over the period to the end of each specific lease (up to 10 years).
Restructuring provisions relate primarily to the strategic programme for the closure of two European distribution centres and exiting of legacy franchise business not aligned to
the strategy.
Other provisions include amounts in respect of probable liabilities for employee-related matters.
Provisions related to adjusting items were £141.6m at 29 March 2025 (last year: £130.6m), with a net release in the year of £12.8m (last year: £43.8m charge) (see note 5).
23 Deferred tax
Deferred tax is provided under the balance sheet liability method using the tax rate at which the balances are expected to unwind of 25% (last year: 25%) for UK differences and
local tax rates for overseas differences. Details of the changes to the UK corporation tax rate and the impact on the Group are described in note 7.
The movements in deferred tax assets and liabilities (after the offsetting of balances within the same jurisdiction as permitted by IAS 12 – ‘Income Taxes’) during the year are shown below.
Deferred tax assets/(liabilities)

| Land and | Capital |  |  | Other |  |  |
| buildings | allowances in | Pension |  | short-term |  |  |
| temporary | excess of | temporary | IFRS 16 | temporary | Total UK | Overseas |
| differences | depreciation | differences | adjustment | differences | deferred tax | deferred tax | Total
| £m | £m | £m | £m | £m | £m | £m | £m
At 2 April 2023 | (207.6) | (11.1) | (140.5) | 111.8 | 46.8 | (200.6) | 1.8 | (198.8)
(Charged)/credited to income statement | (21.1) | (69.0) | (3.9) | (7.1) | (0.9) | (102.0) | 4.7 | (97. 3)
Credited/(charged) to equity/other comprehensive income | — | — | 104.7 | — | (1.9) | 102.8 | (0.8) | 102.0
At 30 March 2024 | (228.7) | (80.1) | (39.7) | 104.7 | 44.0 | (199.8) | 5.7 | (194.1)
At 31 March 2024 | (228.7) | (80.1) | (39.7) | 104.7 | 44.0 | (199.8) | 5.7 | (194.1)
Credited/(charged) to income statement | 5.5 | (63.8) | 0.3 | (7.1) | 5.2 | (59.9) | 2.9 | (57.0)
Credited/(charged) to equity/other comprehensive income | — | — | 70.2 | — | (4.1) | 66.1 | (0.5) | 65.6
At 29 March 2025 | (223.2) | (143.9) | 30.8 | 97.6 | 45.1 | (193.6) | 8.1 | (185.5)

The following is the analysis of the deferred tax balances after offset:

| 2025 | 2024
| £m | £m
Deferred tax assets | 13.9 | 11.7
Deferred tax liabilities | (199.4) | (205.8)

Other short-term temporary differences included a deferred tax asset of £40.9m (last year: £27.0m) in respect of employee share options and a deferred tax asset £0.4m (last year: £2.0m)
in relation to financial instruments.
The deferred tax liability on land and buildings temporary differences is reduced by the benefit of capital losses with a gross value of £189.2m (last year: £162.4m) and a tax value of
£47.3m (last year: £40.6m). The gross carried forward capital losses are £394.0m (last year: £399.0m) with a tax value of £98.5m (last year: £99.8m) and are inclusive of the gross
£189.2m of losses used to reduce the deferred tax liability on land and buildings.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 175
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 Deferred tax continued
Deferred tax assets/(liabilities) continued
Due to uncertainty over their future use, no benefit has been recognised in respect of
trading losses carried forward in overseas jurisdictions with a gross value of £5.6m
(last year: £5.2m) and a tax value of £1.5m (last year: £1.3m).
No deferred tax is recognised in respect of undistributed earnings of overseas subsidiaries
and joint ventures with a gross value of £50.0m (last year: £46.4m) unless a material
liability is expected to arise on distribution of these earnings under applicable tax
legislation. There is a potential tax liability in respect of undistributed earnings of £4.7m
(last year: £4.4m), however this has not been recognised on the basis the distribution
can be controlled by the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
24 Ordinary share capital

| 2025 |  | 2024 |
| Ordinary shares |  | Ordinary shares |
| of £0.01 each |  | of £0.01 each |
| Shares | £m | Shares | £m
Issued and fully paid |  |  |  |
At start of year | 2,040,355,823 | 20.5 | 1,964,933,931 | 19.8
Shares issued in respect |  |  |  |
of employee share option |  |  |  |
schemes | 14,844,347 | 0.1 | 75,421,892 | 0.7
At end of year | 2,055,200,170 | 20.6 | 2,040,355,823 | 20.5

Issue of new shares
A total of 14,844,347 (last year: 75,421,892) ordinary shares having a nominal value of
£0.1m (last year: £0.7m) were allotted during the year under the terms of the Company’s
share schemes which are described in note 13 of the Group financial statements. The
aggregate consideration received was £15.8m (last year: £57.0m).
25 Contingencies and commitments
A. Capital commitments

| 2025 | 2024
| £m | £m
Commitments in respect of properties in the course of construction | 359.7 | 175.2
Software capital commitments | 9.2 | 6.5
| 368.9 | 181.7

During 2021/22, the Group committed to invest up to £25.0m, over a three-year period
to 2024/25, in an innovation and consumer growth fund managed by True Capital
Limited. This period was extended to 2026/27 during the year 2023/24. The fund can
drawdown amounts at any time over the five-year period to make specific investments.
At 29 March 2025, the Group had invested £12.9m (last year: £10.1m) of this commitment,
which is held as a non-current other investment and measured at fair value through
profit or loss (see note 16).
B. Other material contracts
See note 12 for details on the Partnership arrangement with the Marks & Spencer UK
Pension Scheme.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 176
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 Analysis of cash flows given in the statement of cash flows
Cash flows from operating activities

| 2025 | 2024
| £m | £m
Profit on ordinary activities after taxation | 291.9 | 425.2
Income tax expense | 219.9 | 247.3
Finance costs | 177.2 | 188.4
Finance income | (64.7) | (146.7)
Operating profit | 624.3 | 714.2
Share of results of Ocado Retail Limited | 28.7 | 37.3
Share of results in other joint ventures | (0.5) | 0.3
Increase in inventories | (73.3) | (31.3)
Increase in receivables | (33.7) | (17.5)
Increase in payables | 68.4 | 126.0
Depreciation, amortisation, impairments and disposals | 542.6 | 526.3
Non-cash share-based payment expense | 52.4 | 48.3
Non-cash pension expense | 5.6 | 5.3
Defined benefit pension funding | (0.4) | (0.4)
Adjusting items net cash outflows 1,2 | (25.6) | (38.0)
Adjusting items M&S Bank 3 | (27.4) | (2.0)
Adjusting items within operating profit | 360.2 | 124.4
Cash generated from operations | 1,521.3 | 1,492.9

1 Excludes £19.0m (last year: £24.1m) of surrender payments included within repayment of lease liabilities in the consolidated statement of cash flows relating to leases within the store estate programme.
2 Adjusting items net cash outflows relate to strategic programme costs associated with the Store estate, UK logistics, Furniture simplification, Digital and Technology transformation and income associated with
a legal settlement.
3 Adjusting items M&S Bank relates to one-off fees paid to M&S Bank under the new Relationship Agreement which will be recognised as a reduction to income over the term of the contract. Last half year and last year
end, this related to M&S Bank income recognised in operating profit offset by charges incurred in relation to the insurance mis-selling provision, which is a non-cash item.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 177
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
27 Analysis of net debt
A. Reconciliation of movement in net debt

|  |  |  |  | Lease | Exchange |
| At | Cash flows | Cash flows | Changes | additions and | and other | At
| 2 April | excluding | relating to | in fair | remeasure- | non-cash | 30 March
| 2023 | interest | interest 1 | values | ments | movements | 2024
| £m | £m | £m | £m | £m | £m | £m
Net debt |  |  |  |  |  |  |
Cash and cash equivalents (see note 18) | 1,067.9 | 89.8 | (133.2) | — | — | (2.1) | 1,022.4
Net cash per statement of cash flows | 1,067.9 | 89.8 | (133.2) | — | — | (2.1) | 1,022.4
Current other financial assets (see note 16) | 13.0 | (0.7) | — | — | — | — | 12.3
Liabilities from financing activities |  |  | — |  |  | — | —
Medium-Term Notes (see note 20) | (1,346.4) | 395.6 | 65.7 | — | — | (36.6) | (921.7)
Lease liabilities (see note 20) | (2,281.6) | 243.5 | 102.0 | — | (176.0) | (99.4) | (2,211.5)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note 12) | (121.9) | 40.0 | — | — | — | — | (81.9)
Derivatives held to hedge Medium-Term Notes | (5.2) | — | — | (16.4) | — | — | (21.6)
Liabilities from financing activities | (3,755.1) | 679.1 | 167.7 | (16.4) | (176.0) | (136.0) | (3,236.7)
Less: Cash flows related to interest and derivative instruments | 37.0 | — | (34.5) | 16.4 | — | 17.3 | 36.2
Net debt | (2,637.2) | 768.2 | — | — | (176.0) | (120.8) | (2,165.8)

Marks and Spencer Group plc Annual Report and Financial Statements 2025178
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
27 Analysis of net debt continued
A. Reconciliation of movement in net debt continued

|  |  |  |  | Lease | Exchange |
| At | Cash flows | Cash flows |  | additions and | and other | At
| 31 March | excluding | relating to | Changes | remeasure- | non-cash | 29 March
| 2024 | interest | interest 1 | in fair values | ments | movements | 2025
| £m | £m | £m | £m | £m | £m | £m
Net debt |  |  |  |  |  |  |
Cash and cash equivalents (see note 18) | 1,022.4 | (50.2) | (106.5) | — | — | (1.2) | 864.5
Net cash per statement of cash flows | 1,022.4 | (50.2) | (106.5) | — | — | (1.2) | 864.5
Current other financial assets (see note 16) | 12.3 | 277. 2 | — | — | — | — | 289.5
Liabilities from financing activities |  |  |  |  |  | — |
Medium-Term Notes (see note 20) | (921.7) | 187.8 | 45.6 | — | — | (28.8) | (717.1)
Lease liabilities (see note 20) | (2,211.5) | 258.6 | 103.4 | — | (261.0) | (116.9) | (2,227.4)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note 12) | (81.9) | 40.0 | 0.5 | — | — | 41.4 | —
Derivatives held to hedge Medium-Term Notes | (21.6) | — | — | 11.1 | — | — | (10.5)
Liabilities from financing activities | (3,236.7) | 486.4 | 149.5 | 11.1 | (261.0) | (104.3) | (2,955.0)
Less: Cash flows related to interest and derivative instruments | 36.2 | — | (43.0) | (11.1) | — | 29.3 | 11.4
Net debt | (2,165.8) | 713.4 | — | — | (261.0) | (76.2) | (1,789.6)

1 Change of presentation from last year to split cash flows into interest and excluding interest columns
B. Reconciliation of net debt to statement of financial position

| 2025 | 2024
| £m | £m
Statement of financial position and related notes |  |
Cash and cash equivalents (see note 18) | 864.5 | 1,022.4
Current other financial assets (see note 16) | 289.5 | 12.3
Medium-Term Notes – excluding impact of foreign exchange (see note 20) | (738.3) | (937.2)
Lease liabilities (see note 20) | (2,227.4) | (2,211.5)
Partnership liability to the Marks & Spencer UK Pension Scheme (see note 12 and 21) | — | (88.8)
| (1,811.7) | (2,202.8)
Interest payable included within related borrowing and the Partnership liability to the Marks & Spencer UK Pension Scheme | 22.1 | 37.0
Net debt | (1,789.6) | (2,165.8)

Marks and Spencer Group plc Annual Report and Financial Statements 2025 179
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 Related party transactions
A. Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, have
been eliminated on consolidation and are not disclosed in this note. Transactions
between the Company and its subsidiaries are disclosed in the Company’s separate
financial statements.
B. Joint ventures and associates
Ocado Retail Limited
The following transactions were carried out with Ocado Retail Limited, an associate of
the Group.
Loan to Ocado Retail Limited

| 2025 | 2024
| £m | £m
Opening balance | 92.2 | 30.9
Loans advanced | — | 60.0
Interest charged | 8.5 | 6.0
Interest repaid | — | (4.7)
Closing balance | 100.7 | 92.2

The loan matures during 2039/40 and accrues interest at Sterling Overnight Index
Average (SONIA) plus an applicable margin.
Parent guarantee
Ocado Retail Limited, an associate of the Group, entered into a £30.0m revolving credit
facility on 9 May 2024, of which £nil was drawn at 29 March 2025. The Group, along with
Ocado Group plc, jointly guarantee the facility. Last year, the facility had expired.
Sales and purchases of goods and services

| 2025 | 2024
| £m | £m
Sales of goods and services | 62.2 | 44.9
Purchases of goods and services | — | 0.1

Included within trade and other receivables is a balance of £7.9m (last year: £4.1m) owed
by Ocado Retail Limited .
Nobody’s Child Limited
Nobody’s Child Limited became an associate of the Group in November 2021.
During the year, the Group made purchases of goods amounting to £9.7m (last year: £7.0m).
At 29 March 2025, there was a balance of £nil within trade and other payables (last year: £0.1m)
owed to Nobody’s Child Limited, and £3.0m included within other financial assets
(last year: £2.7m) owed from Nobody’s Child Limited.
C. Marks & Spencer UK Pension Scheme
Details of other transactions and balances held with the Marks & Spencer UK Pension
Scheme are set out in notes 11 and 12.
D. Key management compensation
The Group has determined that the key management personnel constitute the Board
and the members of the Executive Committee.

| 2025 | 2024
| £m | £m
Salaries and short-term benefits | 14.9 | 10.6
Pension costs | 0.4 | 0.4
Share-based payments | 20.9 | 10.0
Total | 36.2 | 21.0

29 Investments in joint ventures and associates
The Group holds a 50% interest in Ocado Retail Limited, a company incorporated in the
UK. The remaining 50% interest is held by Ocado Group plc. Ocado Retail Limited is an
online grocery retailer, operating through the ocado.com and ocadozoom.com websites.
At the reporting date, Ocado Retail Limited was considered an associate of the Group
as certain rights were conferred on Ocado Group plc for an initial period of at least five
years from acquisition in August 2019, giving Ocado Group plc control of the company.
Through Board representation and shareholder voting rights, the Group was considered
to have significant influence and therefore the investment in Ocado Retail Limited was
treated as an associate and the Group applied the equity method of accounting. Subsequent
to the year end, on 6 April 2025, Ocado Group plc gave up those rights to the Group.
There was no change in economic interest of both shareholders in Ocado Retail Limited,
nor any consideration paid by the Group, as a result of this change. From 6 April 2025,
Ocado Retail Limited is consolidated as a subsidiary of the Group (see note 30).
Previously, Ocado Retail Limited’s financial year end aligned with Ocado Group plc. For
the Group’s purpose of applying the equity method of accounting, Ocado Retail Limited
had prepared financial information to the nearest quarter-end date of its financial year
end, as to do otherwise would be impracticable. As part of the above change, Ocado
Retail Limited has changed its year end date to align to the Group meaning that the
Group’s results for Ocado Retail Limited are incorporated in these financial statements
from 4 March 2024 to 6 April 2025. There were no significant events or transactions in
the period from 29 March 2025 to 6 April 2025.
The carrying amount of the Group’s interest in Ocado Retail Limited is £385.0m
(last year: £677.1m). The Group’s share of Ocado Retail Limited losses of £43.6m (last year:
loss of £79.9m) includes the Group’s share of underlying losses of £28.7m (last year: share
of underlying losses: £37.3m) and the Group’s share of adjusting item charges of £2.0m
(last year: £29.7m) and adjusting item charges of £12.9m (last year: £12.9m) (see note 5).
Marks and Spencer Group plc Annual Report and Financial Statements 2025180
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
29 Investments in joint ventures and associates continued
During the year, following the identification of an impairment indicator triggered as part
of the preparations ahead of the change of control and consolidation of Ocado Retail
Limited, the Group has recognised an investment impairment charge of £248.5m (last
year: £nil). This charge has been recognised as an adjusting item (see note 5).
Under IAS 36 Impairment of Assets, the recoverable amount was based on a fair value
methodology and was estimated using the latest ORL Board-approved 5-year cash flow
forecast, adjusted for certain management assumptions and having regard to historic
ORL performance, future achievable growth and the impact of committed initiatives.
The fair value valuation technique relies on inputs not in the public domain and is
categorised as Level 3 in the hierarchy (for further details see ‘fair value hierarchy’ on
page 173 in note 21).
Significant assumptions have been used in calculating the recoverable amount which
are subject to uncertainty and involve judgement, including the cash flows used and
the post-tax discount rate of 9.0%. The key assumptions most likely to have a material
impact are revenue, fulfilment and delivery costs and the discount rate.
Management has performed sensitivity analysis on the key assumptions and using
reasonably possible changes would result in the following impacts:
•
A reduction in revenue of 5% in each year, including the terminal year, while
maintaining margin rate would increase the impairment charge by £52.0m.
•
An increase in fulfilment and delivery costs of 1.0% in each year, including the terminal
year, would increase the impairment charge by £41.0m.
•
A 100-basis point increase in the discount rate would increase the impairment charge by £80.0m.
In the event that all three were to occur simultaneously, the impairment charge would
increase by £161.0m.
Summarised financial information in respect of Ocado Retail Limited (the Group’s only
material associate) is set out below and represents amounts in the Ocado Retail Limited
financial statements prepared in accordance with IFRS, adjusted by the Group for equity
accounting purposes.

| As at | As at
| 6 April 2025 | 3 March 2024
| £m | £m
Ocado Retail Limited |  |
Current assets | 270.6 | 261.7
Non-current assets | 505.6 | 517.4
Current liabilities | (327.5) | (272.3)
Non-current liabilities | (494.5) | (491.2)
Net (liabilities)/assets | (45.8) | 15.6

| 4 March | 27 February
| 2024 to | 2023 to
| 6 April 2025 | 3 March 2024
| £m | £m
Revenue | 3,091.9 | 2,470.3
Loss for the period | (61.4) | (133.7)
Total comprehensive loss | (61.4) | (133.7)

Reconciliation of the above summarised financial information to the carrying amount of
the interest in Ocado Retail Limited recognised in the consolidated financial statements:

| As at | As at
| 29 March | 30 March
| 2025 | 2024
| £m | £m
Ocado Retail Limited |  |
Net (liabilities)/assets | (45.8) | 15.6
Proportion of the Group’s ownership interest | (22.9) | 7.8
Goodwill | 449.1 | 449.1
Brand | 223.1 | 229.7
Customer relationships | 45.9 | 56.5
Other adjustments to align accounting policies | (67.4) | (71.7)
Acquisition costs | 5.7 | 5.7
Impairment of investment | (248.5) | —
Carrying amount of the Group’s interest in Ocado Retail Limited | 385.0 | 677.1

In addition, the Group holds immaterial investments in joint ventures and associates totalling
£7.5m (last year: £7.1m). The Group’s share of profit totalled £0.4m (last year: £0.5m loss)
and an impairment of £nil (last year: £3.5m) was recognised.
30 Business combination
On 6 April 2025, in line with expectations, the Group obtained control of Ocado Retail Limited.
There was no change in economic interest of both shareholders in Ocado Retail Limited, nor
any consideration paid by the Group, as a result of this change. For further details see note 29.
The Group has gained control of an investment previously accounted for as an associate,
which has been accounted for as a business combination using the acquisition method
of accounting at the ‘consolidation date’ in accordance with IFRS 3 Business Combinations,
and consequently the Ocado Retail Limited assets acquired and liabilities assumed
have been recorded by the Group at fair value.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 181
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
30 Business combination continued

| As at
| 6 April
| 2025
| £m
Fair value of identifiable net assets (provisional) 1 |
Intangible assets: brand | 228.7
Intangible assets: customer relationships | 55.0
Intangible assets: other | 12.9
Property, plant and equipment – owned | 234.8
Property, plant and equipment – right-of-use assets 2 | 333.0
Inventories | 85.7
Trade and other receivables 3 | 116.7
Cash and cash equivalents | 68.2
Trade and other payables | (261.6)
Borrowings and other financial liabilities 2 | (422.8)
Provisions | (33.8)
Deferred tax liabilities | (58.3)
| 358.5
Goodwill |
Fair value of pre-existing interest in Ocado Retail Limited (see notes 5 and29) | 385.0
Fair value of identifiable net assets | (358.5)
Non-controlling interest, based on their proportionate share of the acquired net assets | 179.3
Loss on settlement of pre-existing relationship | (18.0)
Settlement of pre-existing relationship | 106.1
| 293.9

1 The fair value of the net assets acquired are provisional because the consolidation date was close to the
reporting date. The fair values will be finalised within 12 months of the consolidation date.
2 The Group measured the acquired lease liabilities using the present value of the remaining lease payments
at the date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities
and adjusted to reflect the favourable or unfavourable terms of the lease relative to market terms.
3 The fair value of trade and other receivables is considered equivalent to the gross contractual amount
and the Group expects to collect substantially all of these.
Net cash inflow arising on acquisition relates to cash and cash equivalents acquired.
The goodwill primarily reflects the value of future new customers. None of the goodwill
is expected to be deductible for tax purposes.
Settlement of pre-existing relationships
At the consolidation date, the Group and Ocado Retail Limited had two pre-existing
relationships: a long-term supply contract under which the Group supplied Ocado
Retail Limited with certain products at agreed contract rates; and a shareholder loan
provided by the Group to Ocado Retail Limited (see note 28).
These pre-existing relationships were effectively settled at the consolidation date and
were accounted for separately from the business combination under IFRS 3. Any pre-existing
balances were eliminated on consolidation, with the balances derecognised from the
Group’s balance sheet and excluded from the fair value of Ocado Retail Limited’s net
assets acquired.
The long-term supply contract was effectively terminated at the consolidation date.
The Group has attributed £18.0m of the notional consideration to the settlement of that
pre-existing relationship. The fair value of the settlement has been determined based
on an assessment of the difference between current market rates and the rates
previously agreed in the lower cost legacy supply contract. The charge will be
recognised within adjusting items.
31 Contingent assets
Previously, the Group was seeking damages from an independent third party following
their involvement in anti-competitive behaviour that adversely impacted the Group.
The Group expected to receive an amount from the claim (either in settlement or from
the legal proceedings), a position that was reinforced by recent court judgements in
similar claims. During the period, net income of £20.5m was recognised in settlement
of the damages action (see note 5).
32 Subsequent events
On 6 April 2025, Ocado Retail Limited became a subsidiary of the Group. See notes 1, 29
and 30 for details.
On 22 April 2025, we announced that we had been managing a cyber incident. As part of
our proactive management of the incident, we made the decision to pause taking orders
via our UK & Ireland websites and apps and some M&S International-operated websites.
In response to the events, we engaged external cyber security experts to assist with
investigating and managing the incident. The Group also engaged with the relevant
authorities, including reporting the incident to the National Cyber Security Centre and
the UK’s Information Commissioner’s Office (‘ICO’) as appropriate.
The incident has been treated as a non-adjusting post-balance sheet event and there
has been no impact on the financial results reported for the year ended 29 March 2025.
Our current estimate before mitigation is an impact on Group operating profit of around
£300m for 2025/26, which will be reduced through management of costs, insurance and
other trading actions. It is expected that costs directly relating to the incident will be
presented separately as an adjusting item.
Marks and Spencer Group plc Annual Report and Financial Statements 2025182
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMPANY STATEMENT OF FINANCIAL POSITION
Notes
As at
29 March
2025
£m
As at
30 March
2024
£m
Assets
Non-current assets
Investments in subsidiary undertakings C6 9,830.7 10,004.6
Total assets 9,830.7 10,004.6
Liabilities
Current liabilities
Amounts owed to subsidiary undertakings 2,462.7 2,483.6
Total liabilities 2,462.7 2,483.6
Net assets 7,368.0 7,521.0
Equity
Ordinary share capital C7 20.6 20.5
Share premium account C7 982.7 967.0
Capital redemption reserve 2,680.4 2,680.4
Merger reserve C7 1,397.3 1, 397.3
Retained earnings 2,287.0 2,455.8
Total equity 7,368.0 7,521.0
The Company’s loss for the year was £151.3m (last year: profit of £1,975.9m).
The financial statements were approved by the Board and authorised for issue on 20 May 2025. The financial statements also comprise the notes C1 to C7.
Stuart Machin
Chief Executive Officer
Registered number: 04256886
Marks and Spencer Group plc Annual Report and Financial Statements 2025 183
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Ordinary
share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Merger
reserve
£m
Retained
earnings
£m
Total
£m
At 2 April 2023 19.8 910.7 2,680.4 — 1,855.0 5,465.9
Profit for the year — — — — 1,975.9 1,975.9
Dividends — — — — (19.6) (19.6)
Capital contribution for share-based payments — — — — 41.8 41.8
Shares issued on exercise of employee share options 0.7 56.3 — — — 57.0
Reclassification from merger reserve — — — 1, 397.3 (1,397. 3) —
At 30 March 2024 20.5 967.0 2,680.4 1,397.3 2,455.8 7,521.0
At 31 March 2024 20.5 967.0 2,680.4 1,397.3 2,455.8 7,521.0
Loss for the year — — — — (151.3) (151.3)
Dividends — — — — (60.5) (60.5)
Capital contribution for share-based payments — — — — 43.0 43.0
Shares issued on exercise of employee share options 0.1 15.7 — — — 15.8
At 29 March 2025 20.6 982.7 2,680.4 1,397.3 2,287.0 7,368.0
Marks and Spencer Group plc Annual Report and Financial Statements 2025184
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMPANY STATEMENT OF CASH FLOWS
52 weeks
ended
29 March 2025
£m
52 weeks
ended
30 March 2024
£m
Cash flow from investing activities
Dividends received 65.6 20.0
Net cash generated from investing activities 65.6 20.0
Cash flows from financing activities
Shares issued on exercise of employee share options 15.8 57.0
Repayment of intercompany loan (20.9) (57.4)
Equity dividends paid (60.5) (19.6)
Net cash used in financing activities (65.6) (20.0)
Net cash inflow from activities — —
Cash and cash equivalents at beginning and end of year — —
Marks and Spencer Group plc Annual Report and Financial Statements 2025 185
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
C1 Accounting policies
General information
Marks and Spencer Group plc (the Company) is a public limited company domiciled and
incorporated in England and Wales under the Companies Act 2006. The address of the
Company’s registered office is Waterside House, 35 North Wharf Road, London W21NW,
United Kingdom.
The principal activities of the Company and the nature of the Company’s operations is
as a holding entity.
These financial statements are presented in sterling, which is the Company’s functional
currency, and are rounded to the nearest hundred thousand.
The Company’s accounting policies are the same as those set out in note 1 of the Group
financial statements, except as noted below.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for
impairment. The Company grants share-based payments to the employees of subsidiary
companies. Each period the fair value of the employee services received by the
subsidiary as a capital contribution from the Company is reflected as an addition to
investments in subsidiaries.
Loans from other Group undertakings and all other payables are initially recorded at
fair value, which is generally the proceeds received. They are then subsequently carried
at amortised cost. The loans are non-interest bearing and repayable on demand.
In accordance with the exemption allowed by Section 408(3) of the Companies Act
2006, the Company has not presented its own income statement or statement of
comprehensive income.
Key sources of estimation uncertainty
Impairment of investments in subsidiary undertakings
The carrying value of the investments in subsidiary undertakings is reviewed for
impairment or impairment reversal on an annual basis. The recoverable amount is
determined based on value in use which requires the determination of appropriate
assumptions (which are sources of estimation uncertainty) in relation to the cash flows
over the three-year strategic plan period, the long-term growth rate to be applied
beyond this three-year period and the risk-adjusted pre-tax discount rate used to
discount the assumed cash flows to present value.
Estimation uncertainty arises due to changing economic and market factors, the
channel shift from stores to online, increasing technological advancement and the
Group’s ongoing strategic transformation programmes. See note C6 for further details
on the assumptions and associated sensitivities.
The Company’s financial risk is managed as part of the Group’s strategy and policies as
discussed in note 21 of the Group financial statements.
C2 Employees
The Company had no employees during the current or prior year. Directors received
emoluments in respect of their services to the Company during the year of £1,341,240
(last year: £1,350,288). The Company did not operate any pension schemes during the
current or preceding year. For further information see the Remuneration Report.
C3 Auditor’s remuneration
Auditor’s remuneration in respect of the Company’s annual audit has been borne by its
subsidiary Marks and Spencer plc and has been disclosed on a consolidated basis in the
Company’s consolidated financial statements as required by Section 494(4)(a) of the
Companies Act 2006.
C4 Dividends
2025
per share
2024
per share
2025
£m
2024
£m
Dividends on equity ordinary shares
Paid final dividend 2.0p — 40.2 —
Paid interim dividend 1.0p 1.0p 20.3 19.6
3.0p 1.0p 60.5 19.6
The directors have approved a final dividend of 2.6p per share (last year: 2.0p per share),
which, in line with the requirements of IAS 10 Events after the Reporting Period, has not
been recognised within these results. This final dividend of c.£53.4m (last year: £40.2m)
will be paid on 4 July 2025 to shareholders whose names are on the Register of Members
at the close of business on 30 May 2025. The ordinary shares will be quoted ex dividend
on 29 May 2025.
A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to
invest their dividends in the shares of the Company. For those shareholders electing to
receive the DRIP, the last date for receipt of a new election is 13 June 2025.
C5 Related party transactions
During the year, the Company received a dividend of £65.6m (last year: £20.0m) and
decreased its loan from Marks and Spencer plc by £20.9m (last year: £57.4m). The
outstanding balance was £2,462.7m (last year: £2,483.6m) and is non-interest bearing.
There were no other related party transactions.
Marks and Spencer Group plc Annual Report and Financial Statements 2025186
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
C6 Investments
A. Investments in subsidiary undertakings
2025 2024
£m £m
Beginning of the year 10,004.6 8,006.9
Contributions to subsidiary undertakings relating to share-based
payments 43.0 41.8
Impairment (charge)/reversal (216.9) 1,955.9
End of year 9,830.7 10,004.6
Shares in subsidiary undertakings represent the Company’s investment in Marks and
Spencer plc, Marks and Spencer Holdings Limited and Marks and Spencer (A2B) Limited.
Impairment of investments in subsidiary undertakings
Investment in Marks and Spencer plc
The Company evaluates its investments in subsidiary undertakings annually for any
indicators of impairment or impairment reversal. The Company considers the relationship
between its market capitalisation and the carrying value of its investments, among
other factors, when reviewing for indicators of impairment. As at 29 March 2025, the
market capitalisation of the Group was below the carrying value of its investment in
Marks and Spencer plc of £9,441.4m, indicating a potential impairment, despite strong
Group performance.
The recoverable amount of the investment in Marks and Spencer plc has been
determined based on a value in use calculation. The Company has updated its
assumptions as at 29 March 2025, reflecting the latest budget and forecast cash flows
covering a three-year period. The pre-tax discount rate of 13.5% (last year: 12.5%) was
derived from the Group’s weighted average cost of capital, the inputs of which include a
country risk-free rate, equity risk premium, Group size premium and a risk adjustment
(beta). The long-term growth rate of 2.0% (last year: 2.0%), was based on inflation
forecasts by recognised bodies with reference to rates used within the retail industry.
The outcome of the value in use calculation supports the carrying value of the
investment in subsidiary undertakings, with a headroom of £1,259.7m. The Company has
determined that the recoverable amount of its investment in Marks and Spencer plc is
£10,025.6m and as a result no impairment has been recognised.
Sensitivity analysis
As disclosed in the accounting policies note C1, the cash flows used within the value in
use model, the long-term growth rate and the discount rate are sources of estimation
uncertainty. Management has performed a sensitivity analysis on the key assumptions
and using reasonably possible changes would result in the following impacts:
Sensitivity area Sensitivity tested Impact Resulting headroom
Cash flows 10% reduction (£1,002.6m) £257.1m
Long-term growthrate 50 basis point decrease (£334.3m) £925.4m
Discount rate 250 basis point increase (£1,686.8m) (£427.1m)
In the event that all three were to happen simultaneously, the resulting impairment
charge would be £1,459.0m.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 187
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
C6 Investments continued
Investment in Marks and Spencer Holdings Limited
Marks and Spencer Holdings Limited holds the investment in Ocado Retail Limited. The
Company considered the impairment of Ocado Retail Limited recognised in the Group
financial statements (see note 5) to be an indicator of impairment of its investment in
Marks and Spencer Holdings Limited.
The recoverable amount of the investment in Marks and Spencer Holdings Limited has
been estimated based on the fair value of the subsidiary as determined by its net asset
value adjusted for the impairment of its investment in Ocado Retail Limited.
The Company has determined that the recoverable amount of its investment in Marks
and Spencer Holdings Limited is £389.4m and as a result has recognised an impairment
of £216.9m.
B Related undertakings
In accordance with Section 409 of the Companies Act 2006, a full list of related
undertakings, the country of incorporation and the effective percentage of equity
owned, as at 29 March 2025 is disclosed below. All undertakings are indirectly owned by
the Company unless otherwise stated.
Subsidiary and other related undertakings registered in the UK
(i)
Name Share class
Proportion of
shares held
(%)
Founders Factory Retail Limited
Registered office: Founders Factory
(Level7) Arundel Street Building
180Strand, 2 Arundel Street,
LondonWC2R 3DA
£0.0001 ordinary
(25.001% of total capital)
0.004
£0.0001 preferred
(74.999% of total capital)
100
Hedge End Park Limited
Registered Office: 33 Holborn, London,
EC1N 2HT
£1 ordinary A
(50% of total capital)
—
£1 ordinary B
(50% of total capital)
100
Marks and Spencer Pension Trust Limited
(ii)(iii)
£1 ordinary A 100
£1 ordinary B —
£1 ordinary C —
Marks and Spencer plc
(iii)
£0.25 ordinary 100
Marks and Spencer Scottish Limited
Partnership
(iv)
Registered Office: 2-28 St Nicholas
Street, Aberdeen, AB10 1BU
Partnership interest 100
Name Share class
Proportion of
shares held
(%)
Ocado Retail Limited
Registered Office: Apollo Court 2 Bishop
Square, Hatfield Business Park, Hatfield,
Hertfordshire, United Kingdom, AL10 9NE
£0.01 ordinary 50
Amethyst Leasing (Holdings) Limited £1 ordinary 100
M & S Limited £1 ordinary 100
Marks and Spencer Pearl (1) Limited £1 ordinary 100
Manford (Textiles) Limited £1 ordinary 100
Marks and Sparks Limited £1 ordinary 100
Marks and Spencer (Northern Ireland)
Limited
Registered office: Merchant Square, 20-22
Wellington Place, Belfast, BT1 6GE
£1 ordinary 100
Marks and Spencer Property
Developments Limited
£1 ordinary 100
Nobody’s Child Limited
Registered Office: 10-11 Greenland Place,
Camden, London, NW1 0AP
£0.01 Ordinary
(72.910% of total capital)
(v)
—
£0.01 Preference
(27.090% of total capital)
(vi)
100
St. Michael (Textiles) Limited £1 ordinary 100
Marks and Spencer Group plc Annual Report and Financial Statements 2025188
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
C6 Investments continued
The following UK subsidiaries will take advantage of the audit exemption set out within
section 479A of the Companies Act 2006 for the year ended 29 March 2025. Unless
otherwise stated, the undertakings listed below are registered at Waterside House,
35North Wharf Road, London, W2 1NW, United Kingdom, and have a single class of
ordinary share with a nominal value of £1. All undertakings are indirectly owned by the
Company unless otherwise stated.
UK registered subsidiaries exempt from audit
Name
Proportion of
shares held
(%)
Company
Number
Amethyst Leasing (Properties) Limited 100 4246934
Busyexport Limited 100 4411320
Marks and Spencer (Initial LP) Limited
(iii)
Registered Office: 2 Semple Street
Edinburgh EH3 8BL
100 SC315365
Marks and Spencer (Property Ventures)
Limited
100 5502513
Marks and Spencer 2005 (Brooklands
Store) Limited
100 5502608
Marks and Spencer 2005 (Chester Store)
Limited
100 5502542
Marks and Spencer 2005 (Fife Road
Kingston Store) Limited
100 5502598
Marks and Spencer 2005 (Glasgow
Sauchiehall Store) Limited
100 5502546
Marks and Spencer 2005 (Hedge End
Store) Limited
100 5502538
Marks and Spencer 2005 (Kensington
Store) Limited
100 5502478
Marks and Spencer 2005 (Kingston-on-
Thames Satellite Store) Limited
100 5502523
Marks and Spencer 2005 (Kingston-on-
Thames Store) Limited
100 5502520
Marks & Spencer Outlet Limited 100 4039568
Marks & Spencer Simply Foods Limited 100 4739922
Marks and Spencer (Property
Investments) Limited
100 5502582
Name
Proportion of
shares held
(%)
Company
Number
Marks and Spencer Chester Limited 100 5174129
Marks and Spencer France Limited 100 5502548
Marks and Spencer International Holdings
Limited
100 2615081
Marks and Spencer (Investment Holdings)
Limited
100 13587353
Marks and Spencer (A2B) Limited
(iii)
100 14228803
Marks & Spencer Company Archive CIC
(vii)
N/A 7377510
Marks and Spencer 2005 (Parman House
Kingston Store) Limited
100 5502588
Marks and Spencer 2005 (Pudsey Store)
Limited
100 5502544
Marks and Spencer 2005 (Warrington
Gemini Store) Limited
100 5502502
Marks and Spencer Holdings Limited
(iii)
100 11845975
Marks and Spencer Investments 100 4903061
Marks and Spencer Property Holdings
Limited
100 2100781
Ruby Properties (Cumbernauld) Limited 100 4922798
Ruby Properties (Hardwick) Limited 100 4716018
Ruby Properties (Long Eaton) Limited 100 4716031
Ruby Properties (Thorncliffe) Limited 100 4716110
Ruby Properties (Tunbridge) Limited 100 4716032
Simply Food (Property Investments) 100 5502543
Simply Food (Property Ventures) Limited 100 2239799
Marks and Spencer (Bradford) Limited 100 10011863
Marks and Spencer (Jaeger) Limited 100 13098074
Marks and Spencer Pearl (Daventry) Limited 100 14267865
Gist Limited 100 502669
St. Michael Finance Limited 100 1339700
The Sports Edit Limited 82.583 9331295
Marks and Spencer Group plc Annual Report and Financial Statements 2025 189
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
The Company will guarantee the debts and liabilities of the above UK subsidiary undertakings at the
balance sheet date of £226.1m in accordance with section 479C of the Companies Act 2006. The Company
has assessed the probability of loss under the guarantee as remote.
(i) All companies registered at Waterside House, 35 North Wharf Road, London, W2 1NW, United Kingdom,
unless otherwise stated.
(ii) In accordance with the Articles of Association of Marks and Spencer Pension Trust Limited, the
holders of B and C ordinary shares are both directors of that company.
(iii) Interest held directly by Marks and Spencer Group plc.
(iv) Marks and Spencer (Initial LP) Limited and Marks and Spencer Pension Trust Limited are the limited
partners; Marks and Spencer plc is the General Partner.
(v) Reduced to 65.987% of total capital as of 25 April 2025.
(vi) Increased to 34.013% of total capital as of 25 April 2025.
(vii) No share capital, as the company is limited by guarantee. Marks and Spencer plc is the sole member.
International subsidiary undertakings
(i)
Name Registered address Country Share class
Proportion
of shares
held by
subsidiary
(%)
Marks and Spencer
(Australia) Pty
Limited
Minter Ellison
Governor Macquarie
Tower Level 40
1 Farrer Place
Sydney NSW 2000
Australia
Australia AUD 2 ordinary 100
Marks and Spencer
(Shanghai) Limited
Unit 03-05A 16/F, Eco
City 1788, 1788 West
Nan Jing Road,
Shanghai, China
China USD NPV 100
Marks and Spencer
Czech Republic a.s
Jemnická 1138/1,
Michle, Praha 4,
14000,
Czech Republic
Czech
Republic
CZK 1,000
ordinary
CZK 100,000
ordinary
CZK 1,000,000
ordinary
100
100
100
Marks and Spencer
Services S.R.O
Jemnická 1138/1,
Michle, Praha 4,
14000,
Czech Republic
Czech
Republic
CZK NPV 100
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
C6 Investments continued
UK registered subsidiaries exempt from audit continued
Name Registered address Country Share class
Proportion
of shares
held by
subsidiary
(%)
Marks and Spencer
Marinopoulos Greece
SA
(ii)
33-35 Ermou Street,
Athens 10563, Greece
Greece
€3 ordinary
€3 preference
100
(iii)
100
Ignazia Limited
Heritage Hall, Le
Marchant Street, St
Peter Port, GY1 4JH,
Guernsey
Guernsey £1 ordinary 100
Teranis Limited
Heritage Hall, Le
Marchant Street, St
Peter Port, GY1 4JH,
Guernsey
Guernsey £1 ordinary 100
M.S. General
Insurance L.P.
Heritage Hall, Le
Marchant Street, St
Peter Port, GY1 4JH,
Guernsey
Guernsey
Partnership
interest
100
Marks and Spencer
(Hong Kong)
Investments Limited
Suites 807-13, 8/F,
South Tower, World
Finance Centre,
Harbour City,
Kowloon, Hong Kong
Hong Kong
No Par Value
ordinary
100
Marks and Spencer
(India) pvt Limited
Plot No 64, 2nd Floor,
Holly Hocks, Sector
44, Gurgaon – 122
002, Haryana, India
India INR10 ordinary 100
Marks and Spencer
Reliance India pvt Ltd
4th Floor, Court
House, Lokmanya
Tilak Marg, Dhobi
Talao, Mumbai, 400
002, India
India
INR 10 class A
(14.619% of
total capital)
INR 10 class B
(43.544% of
total capital)
INR 5 class C
(iv)
(41.837% of
total capital)
51
100
—
Aprell Limited
24/29 Mary Street,
Dublin 2, Ireland
Ireland €1.25 ordinary 100
Marks and Spencer Group plc Annual Report and Financial Statements 2025190
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Name Registered address Country Share class
Proportion
of shares
held by
subsidiary
(%)
Marks and Spencer
(Ireland) Limited
24/27 Mary Street, Co.
Dublin, Dublin 1,
D01YE83, Ireland
Ireland €1.25 ordinary 100
Marks and Spencer
Pensions Trust
(Ireland) Company
Limited By Guarantee
24-27 Mary Street,
Dublin 1, Dublin,
D01YE83, Ireland
Ireland N/A
(v)
—
Marks and Spencer
(Nederland) B.V.
Basisweg 10,
1043 AP,
Amsterdam,
Netherlands
Netherlands €450 ordinary 100
Marks and Spencer BV
Basisweg 10,
1043 AP,
Amsterdam,
Netherlands
Netherlands €100 ordinary 100
Marks & Spencer
(Portugal) Lda.
Avenida da Liberdade
249, 8º, 1250-143,
Lisbon, Portugal
Portugal €1 ordinary 100
Marks and Spencer
(Singapore)
Investments Pte. Ltd.
77 Robinson Road,
#13-00 Robinson 77,
Singapore 068896,
Singapore
Singapore SGD NPV 100
Marks and Spencer
(SA) (Pty) Limited
Woolworths House, 93
Longmarket Street,
Cape Town 8001,
South Africa
South Africa ZAR 2 ordinary 100
Marks and Spencer
Clothing Textile
Trading J.S.C
Havalani Karsisi
istanbul Dunya
Ticaret Merkezi
A3 Blok, Kat:11
Yesilkoy, Bakirkoy
Istanbul
Turkey
Turkey
TRL 25.00
Ordinary
100
Gist Distribution
Limited
24-27 Mary Street,
Dublin 1, Dublin,
Ireland
Ireland €1 Ordinary 100
NOTE: A number of the companies listed are legacy companies which no longer serve any
operationalpurpose.
(i) The shares of all international subsidiary undertakings are held by companies within the Group other
than the Company (Marks and Spencer Group plc).
(ii) Company name from 31 March 2025: Marks and Spencer Greece Single Member SA.
(iii) On 28 March 2025, the 20% ordinary shares owned by JV partner were acquired by Marks and Spencer B.V.
(iv) INR 5 class C shares 100% owned by JV partner.
(v) No share capital as the company is limited by guarantee.
C7 Share capital and other reserves
Issue of new shares
A total of 14,844,347 (last year: 75,421,892) ordinary shares having a nominal value of
£0.1m (last year: £0.7m) were allotted during the year under the terms of the Company’s
share schemes which are described in note 13 of the Group financial statements.
Theaggregate consideration received was £15.8m (last year: £57.0m).
Merger reserve
The Company’s merger reserve was created as part of a Group reorganisation that
occurred in 2001/02 and has an economical relationship to the Company’s investment in
Marks and Spencer plc. Between 2019/20 and 2022/23 an amount equal to the original
merger reserve balance of £1,397.3m was transferred from the merger reserve to retained
earnings as that amount had become a realised profit in accordance with TECH 02/17.
Following the reversal of impairment recognised in 2023/24, an amount equal to the
original merger reserve balance of £1,397.3m was transferred from retained earnings
tothe merger reserve, in accordance with TECH 02/17.
C6 Investments continued
International subsidiary undertakings
(i)
continued
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 191
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GROUP FINANCIAL RECORD
2025
52 weeks
£m
2024
52 weeks
4
£m
2023
52 weeks
4
£m
2022
52 weeks
4
£m
2021
53 weeks
4
£m
Income statement
Revenue
1,4
UK & ROI Fashion, Home & Beauty 4,137.8 4,022.2 3,842.2 3,308.3 2,239.0
UK & ROI Food 9,021.0 8,298.8 7, 348.1 6,639.6 6,138.5
International 658.0 719.1 741.0 937.2 789.4
Revenue before adjusting items 13,816.8 13,040.1 11,931.3 10,885.1 9,166.9
Adjusting items included in revenue — — — — (11.2)
Revenue 13,816.8 13,040.1 11,931.3 10,885.1 9,155.7
Adjusted operating profit/(loss)
1,4
UK & ROI Fashion, Home & Beauty 475.3 437.5 365.9 330.7 (130.8)
UK & ROI Food 484.1 388.4 222.9 277.8 228.6
Ocado (28.7) (37.3) (29.5) 13.9 78.4
Other 7.5 2.2 (0.5) 13.0 1.9
International 46.3 47.8 67.8 73.6 44.1
Total adjusted operating profit 984.5 838.6 626.6 709.0 222.2
Adjusting items included in operating profit (360.2) (124.4) (111.5) (136.8) (252.9)
Total operating profit/(loss) 624.3 714.2 515.1 572.2 (30.7)
Net interest payable (109.0) (122.2) (173.3) (199.3) (219.1)
Adjusting items included in net finance costs (3.5) 80.5 133.9 18.8 40.4
Net finance costs (112.5) (41.7) (39.4) (180.5) (178.7)
Profit on ordinary activities before taxation and adjusting items 875.5 716.4 453.3 509.7 3.1
Profit/(loss) on ordinary activities before taxation 511.8 672.5 475.7 391.7 (209.4)
Income tax (expense)/credit (219.9) (247. 3) (111.2) (180.3) 17.0
Profit/(loss) after taxation 291.9 425.2 364.5 211.4 (192.4)
Marks and Spencer Group plc Annual Report and Financial Statements 2025192
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GROUP FINANCIAL RECORD CONTINUED
2025
52 weeks
£m
2024
52 weeks
£m
2023
52 weeks
£m
2022
52 weeks
£m
2021
53 weeks
£m
Basic earnings per share¹ Basic earnings/Weighted average ordinary shares in issue 14.6p 21.9p 18.5p 10.7p (9.7p)
Adjusted basic earnings per share
1
Adjusted basic earnings/Weighted average ordinary
shares in issue
31.9p 24.6p 16.9p 16.2p (0.1p)
Dividend per share declared in respect of the year
5
3.6p 3.0p — — —
Dividend cover
5
Adjusted earnings per share/Dividend per share 8.9x 8.2x — — —
Retail fixed charge cover
3
Operating profit before depreciation/Fixed charges 6.7x 5.1x 3.7x 3.5x 2.0x
Statement of financial position
Net assets (£m) 2,951.4 2,830.1 2,680.8 2,783.8 2,249.3
Net debt (£m)
2
1,789.6 2,165.8 2,637.2 2,698.8 3,515.9
Capital expenditure (£m)
6
578.2 396.1 402.8 300.2 146.9
Stores and space
UK & ROI stores
4
1,091 1,084 1,087 1,035 1,037
UK & ROI selling space (m sq ft)
4
17.1 17. 3 17. 3 16.7 16.8
International stores
4
395 408 380 452 472
International selling space (m sq ft)
4
4.0 3.9 3.8 5.0 5.1
Colleagues (full-time equivalent)
UK & ROI
4
47,863 49,023 48,657 42,550 44,423
International
4
3,392 3,616 3,435 4,558 4,754
The above results are prepared under IFRS for each reporting period on a consistent basis.
1 Based on continuing operations.
2 Excludes accrued interest.
3 Calculated on Marks and Spencer Group plc’s consolidated basis.
4 During the year, the Group made changes to the International segment and now the Republic of Ireland is reported within the Fashion, Home and Beauty and Food segments. 2024 and 2023 have been restated for
comparative purposes, however, the 2022 and 2021 figures remain UK Food, UK Fashion, Home & Beauty and the Republic of Ireland is included within the International segment.
5 Dividend per share declared in respect of the year and dividend cover have been restated.
6 Capital expenditure has been restated for 2024.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 193
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES
The Group tracks a number of alternative performance measures in managing its business, which are not defined or specified under the requirements of IFRS because they exclude
amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are
calculated using financial measures that are not calculated in accordance with IFRS.
The Group believes that these alternative performance measures, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional
helpful information on the performance of the business. These alternative performance measures are consistent with how the business performance is planned and reported within
the internal management reporting to the Board. Some of these alternative performance measures are also used for the purpose of setting remuneration targets.
These alternative performance measures should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial statements relating to
the Group, which are prepared in accordance with IFRS. The Group believes that these alternative performance measures are useful indicators of its performance. However, they
may not be comparable with similarly-titled measures reported by other companies due to differences in the way they are calculated.
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
Income statement measures
Sales
1
Revenue Consignment sales Sales include the gross value of consignment sales (excluding VAT). Where third-party branded goods are sold on a
consignment basis, only the commission receivable is included in statutory revenue. This measure has been
introduced given the Group’s focus on launching and growing third-party brands and is consistent with how the
business performance is reported and assessed by the Board and the Executive Committee.
Fashion, Home &
Beauty store/
Fashion, Home &
Beauty online sales
1
None Not applicable The growth in revenues on a year-on-year basis is a good indicator of the performance of the stores and online channels.
2024/25
£m
2023/24
£m %
UK & ROI Fashion, Home & Beauty
Store sales
2
2,806.1 2,777.3 1.0
Consignment sales (16.9) (18.6)
Store revenue
2,789.2 2,758.7 1.1
Online sales
2
1,429.2 1,314.1 8.8
Consignment sales (80.6) (50.6)
Online revenue
1,348.6 1,263.5 6.7
UK & ROI Fashion, Home & Beauty sales 4,235.3 4,091.4 3.5
Consignment sales (97.5) (69.2)
Total UK & ROI Fashion, Home & Beauty revenue 4,137.8 4,022.2 2.9
2 UK & ROI Fashion, Home & Beauty store sales exclude revenue from ‘shop your way’ and Click & Collect, which are included in UK & ROI
Fashion, Home & Beauty online sales.
There is no material difference between sales and revenue for UK & ROI Food and International.
Marks and Spencer Group plc Annual Report and Financial Statements 2025194
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
Like-for-like sales
growth
1
Movement in
revenue per the
income statement
Revenue from
non-retail
businesses
Revenue from
non-like-for-like
stores
Consignment
sales
The period-on-period change in sales (excluding VAT) from stores which have been trading and where there has
been no significant change (greater than 10%) in footage for at least 52 weeks and online sales. The measure is used
widely in the retail industry as an indicator of sales performance. It excludes the impact of new stores, closed stores,
stores with significant footage change and non-retail businesses such as supply chain services.
2024/25
£m
2023/24
£m %
UK & ROI Food
Like-for-like 8,609.1 7,924.1 8.6
Net new space
3
411.9 374.7
Total UK & ROI Food sales 9,021.0 8,298.8 8.7
UK & ROI Fashion, Home & Beauty
Like-for-like 4,145.7 3,972.1 4.4
Net new space 89.6 119.3
Total UK & ROI Fashion, Home & Beauty sales 4,235.3 4,091.4 3.5
3 UK & ROI Food net new space includes Gist third party revenue.
M&S.com sales/
online sales
1
None Not applicable Total sales through the Group’s online platforms. These sales are reported within the relevant UK & ROI Fashion,
Home & Beauty, UK & ROI Food and International segment results. The growth in sales on a year-on-year basis is a
good indicator of the performance of the online channel and is a measure used within the Group’s incentive plans.
Refer to the Remuneration Report for an explanation of why this measure is used within incentive plans.
Fashion, Home &
Beauty Online sales
excluding furniture
1
None Not applicable Total online sales for UK & ROI Fashion, Home & Beauty excluding the furniture categories’ sales. This measure has
been introduced to enable a comparable indicator of the performance of the online channel as it excludes the impact
of furniture sales following the Group’s withdrawal from its two-person furniture delivery operation (see note 5).
International online
1
None Not applicable International sales through International online platforms. These sales are reported within the International
segment results. The growth in sales on a year-on-year basis is a good indicator of the performance of the online
channel. This measure has been introduced given the Group’s focus on online sales.
2024/25
£m
2023/24
£m %
International sales
Stores 566.6 600.5 (5.6)
Online 91.4 118.6 (22.9)
At reported currency 658.0 719.1 (8.5)
Marks and Spencer Group plc Annual Report and Financial Statements 2025 195
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
Sales growth at
constant currency
1
None Not applicable The period-on-period change in sales retranslating the previous year sales at the average actual periodic exchange
rates used in the current financial year. This measure is presented as a means of eliminating the effects of exchange
rate fluctuations on the period-on-period reported results.
2024/25
£m
2023/24
£m %
International sales
At constant currency 658.0 708.2 (7.1)
Impact of FX retranslation — 10.9
At reported currency 658.0 719.1 (8.5)
Adjusting items None Not applicable Those items which the Group excludes from its adjusted profit metrics in order to present a further measure of the
Group’s performance. Each of these items, costs or incomes, is considered to be significant in nature and/or quantum
or are consistent with items treated as adjusting in prior periods. Excluding these items from profit metrics provides
readers with helpful additional information on the performance of the business across periods because it is consistent
with how the business performance is planned by, and reported to, the Board and the Executive Committee.
Adjusted operating
profit
Operating profit
before adjusting
items
Operating profit Adjusting items
(See note 5)
Operating profit before the impact of adjusting items. The Group considers this to be an important measure of
Group performance and is consistent with how the business performance is reported and assessed by the Board and
the Executive Committee.
Adjusted operating
margin
Operating margin
before adjusting
items
None Not applicable Adjusted operating profit as a percentage of sales.
Finance income
before adjusting
items
Finance income Adjusting items
(See note 5)
Finance income before the impact of adjusting items. The Group considers this to be an important measure of Group
performance and is consistent with how the business performance is reported and assessed by the Board and the
Executive Committee.
Finance costs
before adjusting
items
Finance costs Adjusting items
(See note 5)
Finance costs before the impact of adjusting items. The Group considers this to be an important measure of Group
performance and is consistent with how the business performance is reported and assessed by the Board and the
Executive Committee.
Net interest
payable on leases
Finance income/
costs
Finance income/
costs
(See note 6)
The net of interest income on subleases and interest payable on lease liabilities. This measure has been introduced
as it allows the Board and Executive Committee to assess the impact of IFRS 16 Leases.
Net financial
interest
Finance income/
costs
Finance income/
costs
(See note 6)
Calculated as net finance costs, excluding interest on leases and adjusting items. The Group considers this to be an
important measure of Group performance and is consistent with how the business performance is reported and
assessed by the Board and the Executive Committee.
Marks and Spencer Group plc Annual Report and Financial Statements 2025196
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
EBIT before
adjusting items
EBIT
4
Adjusting items
(See note 5)
Calculated as profit before the impact of adjusting items, net finance costs and tax as disclosed on the face of the
consolidated income statement. This measure is used in calculating the return on capital employed for the Group.
Ocado Retail
Limited Adjusted
EBITDA
EBIT
4
Not applicable Calculated as Ocado Retail Limited earnings before interest, taxation, depreciation, amortisation, impairment and
adjusting items.
Profit before tax
and adjusting items
Profit before tax Adjusting items
(See note 5)
Profit before the impact of adjusting items and tax. The Group considers this to be an important measure of Group
performance and is consistent with how the business performance is reported and assessed by the Board and the
Executive Committee.
This is a measure used within the Group’s incentive plans. Refer to the Remuneration Report for an explanation of
why this measure is used within incentive plans.
Adjusted basic
earnings per share
Earnings per share Adjusting items
(See note 5)
Profit after tax attributable to owners of the parent and before the impact of adjusting items, divided by the
weighted average number of ordinary shares in issue during the financial year.
This is a measure used within the Group’s incentive plans. Refer to the Remuneration Report for an explanation of
why this measure is used.
Adjusted diluted
earnings per share
Diluted earnings
per share
Adjusting items
(See note 5)
Profit after tax attributable to owners of the parent and before the impact of adjusting items, divided by the
weighted average number of ordinary shares in issue during the financial year adjusted for the effects of any
potentially dilutive options.
Effective tax rate
before adjusting
items
Effective tax rate Adjusting items
and their tax
impact
(See note 5 and
note 7)
Total income tax charge for the Group excluding the tax impact of adjusting items divided by the profit before tax
and adjusting items. This measure is an indicator of the ongoing tax rate for the Group.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 197
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
Balance sheet measures
Net debt None Reconciliation of
net debt (see note
27)
Net debt comprises total borrowings (bank and bonds net of accrued interest and lease liabilities), the spot foreign
exchange component of net derivative financial instruments that hedge the debt and the Scottish Limited
Partnership liability to the Marks and Spencer UK Pension Scheme less cash, cash equivalents and unlisted and
short-term investments. Net debt does not include contingent consideration as it is conditional upon future events
which are not yet certain at the balance sheet date.
This measure is a good indication of the strength of the Group’s balance sheet position and is widely used by credit
rating agencies.
Net funds/(debt)
excluding lease
liabilities
None Reconciliation of
net debt (see note
27)
Lease liabilities
(see note 20)
Calculated as net debt less lease liabilities. This measure is a good indication of the strength of the Group’s balance
sheet position and is widely used by credit rating agencies.
Cash flow measures
Free cash flow from
operations
Operating profit See Financial
Review
Calculated as operating profit less adjusting items within operating profit, depreciation and amortisation before
adjusting items, cash lease payments excluding lease surrenders, working capital, defined benefit scheme pension
funding, capex and disposals, financial interest, taxation, employee-related share transactions, share of (profit)/loss
from associate, adjusting items in cash flow and loans to associates.
Free cash flow Operating profit See Financial
Review
Calculated as free cash flow from operations less acquisitions, investments and divestments. This measure shows
the cash generated by the Group during the year that is available for returning to shareholders and is used within
the Group’s incentive plans.
Free cash flow after
shareholder returns
Operating profit See Financial
Review
Calculated as free cash flow less dividends paid.
This measure shows the cash retained by the Group in the year.
Other measures
Capital expenditure None Not applicable Calculated as the purchase of property, plant and equipment, investment property and intangible assets during the
year, less proceeds from asset disposals excluding any assets acquired or disposed of as part of a business
combination or through an investment in an associate.
Marks and Spencer Group plc Annual Report and Financial Statements 2025198
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Alternative performance
measure (APM)
Closest equivalent
statutory measure
Reconciling items to
statutory measure Definition and purpose
Adjusted return on
capital employed
(ROCE)
None Not applicable Calculated as being adjusted operating profit divided by the average of opening and closing capital employed. The
measures used in this calculation are set out below:
2024/25
£m
2023/24
£m
Operating profit 624.3 714.2
Adjusting items included in operating profit (see note 5) 360.2 124.4
Adjusted operating profit 984.5 838.6
Net assets 2,951.4 2,830.1
Add back:
Partnership liability to the Marks & Spencer UK Pension Scheme — 88.8
Deferred tax liabilities 199.4 205.8
Non-current borrowings and other financial liabilities 2,588.7 2,882.8
Retirement benefit deficit 122.7 4.6
Current tax liabilities 1.2 1.5
Derivative financial instruments 34.4 34.4
Less:
Investment property (11.2) (11.6)
Retirement benefit assets — (81.8)
Current tax assets (71.1) (32.9)
Deferred tax assets (13.9) (11.7)
Net operating assets 5,801.6 5,910.0
Add back: Provisions related to adjusting items 141.6 130.6
Capital employed 5,943.2 6,040.6
Average capital employed 5,991.9 5,957. 3
ROCE % 16.4% 14.1%
This measure is used within the Group’s incentive plans. Refer to the Remuneration Report for an explanation of why
this measure is used within incentive plans.
1 The segments have been restated as the Group no longer includes the Republic of Ireland within the International segment and instead includes the Republic of Ireland within the Fashion, Home & Beauty and Food segments.
4 EBIT is not defined within IFRS but is a widely accepted profit measure being earnings before interest and tax.
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Marks and Spencer Group plc Annual Report and Financial Statements 2025 199
Tuesday 1 July 2025 at 11am
Held at, and broadcast from, Waterside House,
35 North Wharf Road, London W2 1NW
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATEATTENTION
If you are in any doubt as to the action you should take, you should
immediately consult your stockbroker, bank manager, solicitor,
accountant or other independent professional adviser authorised under
the Financial Services and Markets Act 2000 if you are resident in the
United Kingdom or, if you reside elsewhere, another appropriately
authorised financial adviser. If you have sold or otherwise transferred all
your shares in the Company, please forward this document and
accompanying documents (except any personalised form of proxy, if
applicable) to the purchaser or transferee, or to the stockbroker or other
agent through whom the sale or transfer was effected, for transmission
to the purchaser or transferee.
NOTICE OF
ANNUAL GENERAL
MEETING 2025
Dear Shareholder, I am pleased to invite
you to the 24th Annual General Meeting
of Marks and Spencer Group plc, which
will be held on 1 July 2025.
Nick Folland
General Counsel & Company Secretary
Use the QR code to
watch our Notice of
Meeting video guide.
Contents
201 Key information
202 Engaging in advance
203 Joining on the day
204 Explanatory notes to the resolutions
209 Notice of Meeting
212 Notes to the Notice of Meeting
214 Appendix
217 Shareholder information
Marks and Spencer Group plc Annual Report and Financial Statements 2025200
NOTICE OF MEETING
KEY INFORMATION
Business of the meeting
The Annual General Meeting (‘AGM’) is a key date in the
Board’s calendar each year, and your engagement both in
advance and on the day is important to us. The Board will
be providing an update on the Company’s performance
and transformation progress from the last year, as well as
presenting the resolutions set out in the Notice of AGM
for you to vote upon. The AGM is also an opportunity for
the Board to hear directly from you and respond to any
questions you may have. This year, we will again be joined
by journalist and author Anita Anand, who will act as your
shareholder advocate, ensuring your views and questions
are put to the Board.
The formal Notice and an explanation of each of the
resolutions to be voted on at the AGM are set out on
pages204 to 213.
AGM arrangements
The 2025 AGM will be a digitally-enabled meeting, held
at, and broadcast from, M&S’ Waterside House Support
Centre at 11am on Tuesday 1 July 2025.
The Board is committed to leading on shareholder
engagement and continues to believe a digitally-enabled
meeting is the best way for directors to interact and engage
with the broadest range of shareholders. Since adopting a
digital approach, we have seen engagement levels increase
and we look forward to your participation again this year.
You are invited to engage with the AGM electronically via
our dedicated Lumi AGM website: https://meetings.
lumiconnect.com/100-898-832-080. Your questions
and voting instructions can be submitted on this website,
both during the meeting and in advance. Details on how
to join the meeting electronically and submit votes and
questions can be found on the following pages.
If you wish to attend the AGM in person as part of our
studio audience, please register your intention to do so in
advance, to help us manage capacity on the day. Please
email privateshareholders@marks-and-spencer.com,
providing your full name and shareholder reference
number (‘SRN’), or nominee holding details, as applicable.
Further details on joining in person are on page 203.
Voting and questions
We encourage all shareholders to vote online and
pre-submit questions in advance of the AGM, so your views
can be heard by the Board even if you are unable tojoin us
on the day. There are several options available to you for
submitting these, including video recorded questions to be
played back during the meeting. Methods of voting and
submitting questions are detailed on pages 202 and 203.
Engagement throughout theyear
If you would like to share your views on the business and
hear more from our leadership team throughout the year,
applications to be part of our 2025/26 Shareholder
Panel are now open. The panel, which meets three to four
times a year, is mainly digital to allow members to join
from wherever they are located. Register your interest by
emailing privateshareholders@marks-and-spencer.com
before 31 July 2025. After the closing date for
applications, thepanel will be selected at random and
successful applicants will be contacted by email.
Shareholder requisitioned resolution
At M&S, we are committed to providing clear and
comprehensive disclosure and have good regular dialogue
with a wide range of our stakeholders. This year, a small
group of shareholders coordinated by ShareAction, who
represent less than 1% of our issued share capital, has
proposed a resolution (special resolution 27) requesting
detailed data disclosures relating to our colleague pay and
the pay of our third-party contractors.
The Board does not support this resolution and
recommends you vote against it.
M&S aims to be the most trusted retailer and the most trusted
employer. Since 2022 we have invested more than £285m
in retail pay, increasing standard hourly pay by over 26%,
more than double the rate of inflation. From 1 April 2025,
pay for customer assistants increased to £12.60 per hour
(and £13.85 in London), in line with the Real Living Wage.
We also provide our colleagues with a wide range of
benefits which, when combined with the new hourly pay
rate, could be worth up to £15.40 an hour.
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
How to engage
Your engagement at our 2025 AGM is important
tous. You can:
•
Vote on our resolutions in advance and on theday.
•
Submit your questions to the Board via the Lumi
website or by email.
•
Watch the AGM broadcast live on the Lumi
website or after the meeting on our
corporatewebsite.
Joining us online?
Locate your SRN and PIN on your Notice of
Availability and check you can log on to the Lumi
AGM website at https://meetings.lumiconnect.
com/100-898-832-080.
Joining us in person?
Pre-register no later than 11am on 27 June 2025
byemailing privateshareholders@marks-and-
spencer.com, providing your full name and SRN
ornominee holding details, as applicable.
We have clear guidelines on how we contract with third
parties set out in our Global Sourcing Principles. As
independent companies, the Board believes it is right for
third-party contractors to set their own rates of pay but
wecontinue to work closely with them to implement
highstandards.
The Board does not believe it is necessary to report
beyond our current disclosures which are already fulsome
in their nature. More detail can be found on page 207.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 201
Support
If you experience any issues or
cannot find your SRN please
contact Equiniti by emailing
hybrid.help@equiniti.com
quotingyour full name and
address. Mailboxes are monitored
9am to 5pm Monday to Friday
(excluding public holidays
inEngland and Wales).
Paper proxy forms are available
from Equiniti on request; you can
call our shareholder helpline on
0345 609 0810, or use any of
Equiniti’s alternative contact
details listed on page 217.
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
Timings
You now have a month-long window to engage with us ahead
ofthe meeting:
Date
10am Monday
2 June 2025
Lumi AGM website open.
Opportunity to pre-submit votes
andquestions.
11am Friday
27 June 2025
Voting and questions pre-submission
window closes.
ENGAGING IN ADVANCE
Logging in
The Lumi AGM website can be
accessed using most well-known
internet browsers such as Edge,
Chrome, Firefox and Safari on a
PC, laptop or internet-enabled
device such as a tablet or
smartphone.
Follow this link https://meetings.
lumiconnect.com/100-898-832-080
or scan the QR code below to log in.
You will be prompted to enter
your Shareholder Reference
Number (‘SRN’) and PIN, both
ofwhich can be found on your
Notice of Availability or Voting
Card sent by post.
Duly appointed proxies or
corporate representatives
should refer to note 21 for
details of how to obtain their
unique username and password
to join the meeting.
Asking questions
Questions for the Board can
besubmitted before 11am on
Friday27 June 2025 via:
1. the ‘Messaging’feature on
theLumi AGM website;
2. email to
AGMquestionsubmission@
marks-and-spencer.com; or
3. recorded video message
submitted to the email above.
Please ensure recordings last
nolonger than one minute.
By submitting a video question,
you consent to your video being
played during the AGM broadcast.
Please note, the AGM recording will
also bemade publicly available
onour corporate website after
themeeting.
Voting
You can submit your voting instructions before the
meeting via:
1. the Lumi AGM website;
2. Equiniti’s Shareview website;
3. CREST or Proxymity electronic proxy
appointment platforms; or
4. completing and returning a paper proxy form.
You can find the resolutions and explanatory notes on
pages 204 to 211.
To cast your vote on the Lumi website, select the
‘Voting’ tab then click the option that corresponds
with the way you wish to vote: ‘For’, ‘Against’ or
‘Withheld’. Simply select a different option if the
wrong choice is selected.
Please note that a vote Withheld is not a vote in
law and will not be counted in the calculation of
votes For and Against each resolution.
Votes cast in advance using any of the above
methods must be received by 11am on Friday
27June 2025.
Click here to
access the
Lumiwebsite.
Click here to watch a video on how
to navigate the Lumi website.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025202
Asking questions
Online: you are able to submit questions live
during the meeting on the Lumi website by clicking
on the ‘Messaging’ tab.
In person: you will have the opportunity to submit
aquestion upon arrival and registration at
Waterside House.
Where a number of questions are received
covering the same topic, Anita Anand, our
shareholder advocate, will group these to address
as many queries as possible.
Joining inperson
If you are joining us on the day, please help us
manage capacity by registering in advance. Email
privateshareholders@marks-and-spencer.com
with your name and SRN.
The meeting will be held at our London Support
Centre which is well served by public transport:
Waterside House,
35North Wharf Road, London
W21NW. Scan the QR code below for our Google
Maps location.
As the meeting will be broadcast live, shareholders
in attendance may be included in the broadcast
available on our website following the meeting.
Byattending the meeting, you are consenting to
beingfilmed.
Seats in our studio audience are limited and therefore
only registered shareholders, proxies or corporate
representatives will be admitted to the meeting.
Ifyou have any specific accessibility requirements,
please include these in your pre-registration email,
so appropriate arrangements can be made.
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
Joining online
You can watch the broadcast live, vote and ask
questions by logging on to the Lumi AGM website
from 10am on 1 July 2025.
JOINING ON THE DAY
Voting
Voting on all resolutions will be by way of a poll.
The voting options will appear on screen after the
resolutions have been proposed.
To vote online, select the ‘Voting’ tab then click
the option that corresponds with the way you
would like to vote as detailed on page 202. If you
wish to cancel your ‘live’ vote, press ‘Cancel’.
Please note that an active internet connection is
required to cast your vote successfully when the
Chairman commences polling on the resolutions.
Itis the responsibility of shareholders to ensure
connectivity for the duration of the meeting.
To vote in person: polling cards will be available
on request for shareholders attending the
meeting inperson.
You can find the resolutions
and explanatory notes on
pages204 to 211.
Click here to
watch a video
on how to
navigate the
Lumi website.
Timings
Date
10am on
1July2025
Meeting registration and question
submission opens.
11am AGM begins.
Until
approx.
1pm
The AGM will last for approximately
two hours and will consist of:
•
An introduction from the Chairman.
•
Presentations from the Executive
team.
•
Opportunity for Q&A with
Boardmembers.
•
Voting on resolutions, once the
poll isdeclared open.
Following
the meeting
(as soon as
practicable)
•
Results of the poll will be released
tothe London Stock Exchange.
•
The meeting will be available to
watch on our corporate website:
corporate.marksandspencer.com.
•
Summarised shareholder questions
andanswers will be published on
thecorporate website.
Paddington Basin
Paddington
Harrow Road
Edgware
Road
A404
A5
M&S AGM
Waterside House
35North Wharf Road
London W2 1NW
St Mary’s Hospital
North Wharf Road
Scan to
access map
Follow this link https://meetings.
lumiconnect.com/100-898-832-080 or
scan the QR code and input your SRN
andPIN tolog in.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 203
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
EXPLANATORY NOTES TO THE RESOLUTIONS
1. To receive the report and accounts
The Board asks that shareholders receive the Annual
Report and Financial Statements for the 52 weeks ended
29 March 2025.
2. Approval of the Directors’
Remuneration Report
The Directors’ Remuneration Report (excluding the
summary of the directors’ remuneration policy), sets out
the pay and benefits received by each of the directors for
the year ended 29 March 2025. In line with legislation, this
vote is advisory and the directors’ entitlement to
remuneration is not conditional on it.
3. Final dividend
The Board proposes a final dividend of 2.6p per share
forthe year ended 29 March 2025. If approved, the
recommended final dividend will be paid on 4 July 2025
to all shareholders who were on the Register of Members
at the close of business on 30 May 2025.
4–13. Election of directors
The directors believe that the Board continues to
maintain an appropriate balance of knowledge and skills
and that all the Non-Executive Directors are independent
in character and judgement. This follows a process of
evaluation as part of the Board’s performance review,
which confirms that each director makes an effective and
valuable contribution to the Board and demonstrates
commitment to the role (including making sufficient time
available for Board and Committee meetings and other
duties as required). More information can be found on
pages 61 to 65 and 71 of the Annual Report.
Alison Dolan joined the Board as Chief Financial Officer
on 6 January 2025, bringing extensive commercial
andoperational finance experience, particularly in
digitalbusinesses.
In accordance with the UK Corporate Governance Code,
all directors will stand for election or re-election,
asrelevant, at the AGM this year. Biographies are
available on pages 62 to 63 of the Annual Report,
withfurtherdetails available on our website,
corporate.marksandspencer.com. It is the Board’s
viewthat thedirectors’ biographies illustrate why each
oftheir contributions are, and continue to be, important
to theCompany’s long-term sustainablesuccess.
14–15. Appointment and
remunerationofauditor
On the recommendation of the Audit & Risk Committee,
following a competitive audit tender process, the Board
proposes in resolution 14 that Deloitte LLP be reappointed
as auditor of the Company. Further information on the
tender process can be found on page 82 of the Annual
Report. Resolution 15 proposes that the Audit & Risk
Committee be authorised to determine the level of the
auditor’s remuneration.
16. Authority to make political donations
The Company’s policy is that it does not, directly or
through any subsidiary, make what are commonly
regarded as donations to any political party. The
authorities being requested from shareholders are not
designed to change this. However, the Companies Act
2006 (the ‘Act’) defines political donations very broadly
and, as a result, covers activities that form part of normal
relationships and which are accepted as a way of
engaging with stakeholders and opinion formers to
ensure that the Company’s issues and concerns are
considered and addressed. Activities of this nature are
not designed to support any political party or to
influence public support for a particular party and would
not be thought of as political donations in the ordinary
sense of those words. Shareholder approval is being
sought on a precautionary basis only.
The resolution, if passed, will renew the directors’ authority
until the conclusion of the AGM in 2026 or on 1 October
2026, whichever is sooner, to make donations and incur
expenditure which might otherwise be caught by the
terms of the Act, up to an aggregate amount of £50,000
for the Company and for subsidiary companies. In the
financial year ended 29 March 2025, the Company and its
subsidiaries did not incur any expenditure pursuant to
equivalent authorities.
17. Renewal of the powers of the
Boardtoallot shares
Paragraph (A) of this resolution 17 would give the
directors the authority to allot ordinary shares of the
Company up to an aggregate nominal amount equal to
£6,853,821.93 (representing 685,382,193 ordinary shares
of £0.01 each). This amount represents approximately
one-third (33.33%) of the Company’s issued ordinary
share capital as at 20 May 2025, the latest practicable
date before the publication of this Notice.
In line with guidance issued by the Investment
Association, paragraph (B) of this resolution would give
the directors authority to allot ordinary shares in
connection with a pre-emptive offer in favour of ordinary
shareholders up to an aggregate nominal amount equal
to £13,707,643.86 (representing 1,370,764,386 ordinary
shares), as reduced by the nominal amount of any shares
issued under paragraph (A) of this resolution. This
amount (before any reduction) represents approximately
two-thirds (66.66%) of the Company’s issued ordinary
share capital as at 20 May 2025, the latest practicable
date before the publication of this Notice.
The authorities sought under paragraphs (A) and (B) of
this resolution will expire at the conclusion of the AGM
in2026 or on 1 October 2026, whichever is sooner. The
directors have no present intention to exercise either of
the authorities sought under this resolution; however, the
Board wishes to ensure that the Company has maximum
flexibility in managing the Group’s capital resources.
Asat the date of this Notice, no shares are held by the
Company in treasury.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025204
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
18–19. Authority to disapply
pre-emptionrights
Resolutions 18 and 19 are proposed as special resolutions.
If the directors wish to allot new shares or other equity
securities or sell treasury shares for cash (other than in
connection with an employee share scheme), company
law requires that these shares are firstoffered to
shareholders in proportion to their existing holdings.
At last year’s AGM, two separate special resolutions were
passed, in line with institutional shareholder guidelines,
empowering the directors to allot equity securities for
cash without first offering them to existing shareholders
in proportion to their existing holdings. It is proposed
that these authorities be renewed, in line with institutional
shareholder guidelines, including the Statement of
Principles on Disapplying Pre-Emption Rights issued by
the Pre-Emption Group in November 2022 (the
‘Statement of Principles’). Whilst there is no current
intention to make use of these authorities, the Board
believes it is in the best interests of shareholders for the
directors to have the flexibility to take advantage of
these authorities if required.
If approved, resolution 18, which follows the Pre-Emption
Group’s template resolution, will authorise the directors,
in accordance with the Statement of Principles, toissue
shares in connection with pre-emptive offers (paragraph
(A) of the resolution), and otherwise to issue shares and/
or sell treasury shares for cash:
1) under paragraph (B) of the resolution, up to an
aggregate nominal amount of £2,056,146.57
(representing 205,614,657 ordinary shares), being
approximately 10% of the Company’s issued ordinary
share capital as at 20 May 2025 (the latest practicable
date before the publication of this Notice); and
2) under paragraph (C) of the resolution, up to an
additional aggregate amount equal to 20% of any
allotment under paragraph (B) of the resolution, for
the purposes of making a follow-on offer to existing
shareholders as described in the Statement of
Principles. The maximum additional nominal amount
that could be issued under paragraph (C) of the
resolution (based on the authority under paragraph
(B) being used in full) is £411,229.31 (representing
approximately 2% of the Company’s issued ordinary
share capital as at 20 May 2025).
The total maximum nominal amount of equity securities
to which resolution 18 relates is £2,467,375.88 (representing
approximately 12% of the Company’s issued ordinary
share capital as at 20 May 2025).
The purpose of resolution 19, which also follows the
Pre-Emption Group’s template resolution and reflects
the Statement of Principles, is to authorise the directors
to allot new shares and other equity securities pursuant
to the allotment authority given by resolution 17, and/or
sell treasury shares for cash, without first being required
to offer such securities to existing shareholders:
1) under paragraph (A) of the resolution, up to a further
nominal amount of £2,056,146.57 (representing
205,614,657 ordinary shares), being approximately 10%
of the Company’s issued ordinary share capital as at
20 May 2025 (the latest practicable date before the
publication of this Notice), to be used only in connection
with an acquisition or specified capital investment of
akind contemplated by the Statement of Principles,
and which is announced contemporaneously with the
allotment, or which has taken place in the preceding
12-month period and is disclosed in the
announcement of the issue; and
2) under paragraph (B) of the resolution, up to an
additional aggregate amount equal to 20% of any
allotment under paragraph (A) of the resolution, for
the purposes of making a follow-on offer to existing
shareholders as described in the Statement of
Principles. The maximum additional nominal amount
that could be issued under paragraph (B) of the
resolution (based on the authority under paragraph
(A) being used in full) is £411,229.31 (representing
approximately 2% of the Company’s issued ordinary
share capital as at 20 May 2025).
The total maximum nominal amount of equity securities
to which resolution 19 relates is £2,467,375.88 (representing
approximately 12% of the Company’s issued ordinary
share capital as at 20 May 2025).
The authority granted by resolution 19 would be in addition
to the general authority to disapply pre-emption rights
under resolution 18. The maximum nominal value of
equity securities that could be allotted if both authorities
were used would be £4,934,751.76, which represents
approximately 24% of the Company’s issued ordinary
share capital as at 20 May 2025, being thelatest
practicable date before the publication of thisNotice.
The Board confirms, should it exercise the authorities
granted by resolutions 18 or 19, it intends to follow best
practice as regards their use, including: (i) following the
shareholder protections in Part 2B of the Statement of
Principles; and (ii) in respect of any follow-on offer,
following the expected features set out in paragraph 3
ofPart 2B of the Statement of Principles.
The directors have no current intention to allot shares
except in connection with employee share schemes.
These authorities will expire at the conclusion of the
AGMin 2026 or on 1 October 2026, whichever is sooner.
20. Authority for the Company to
purchase its own shares
Authority is sought for the Company to purchase up to
10% of its issued ordinary shares, renewing the authority
granted by the shareholders at previous AGMs.
The directors have no present intention of exercising
theauthority to purchase the Company’s own shares;
however, this authority would provide them with the
flexibility to do so in the future, if the prevailing market
conditions made such purchases in the best interests of
shareholders generally.
Ordinary shares purchased by the Company pursuant to
this authority may be held in treasury or may be cancelled.
It remains the Company’s intention to cancel any shares
itbuys back rather than hold them in treasury. The Company
currently holds no shares in treasury. The resolution
specifies the minimum and maximum prices which may
be paid for any ordinary shares purchased under this
authority, reflecting the requirements of the UK
ListingRules.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 205
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
EXPLANATORY NOTES TO THE RESOLUTIONS
CONTINUED
20. Authority for the Company to
purchase its own shares continued
The Company has options outstanding over 41,186,000
ordinary shares, representing 2.00% of the Company’s
issued ordinary share capital as at 20 May 2025, the latest
practicable date before the publication of this Notice.
If the existing authority given at the 2024 AGM and the
authority now being sought by this resolution were to be
fully used, these options would represent 2.23% of the
Company’s ordinary share capital in issue at that date.
21. Notice of general meetings
In accordance with the Act, the notice period for general
meetings (other than the AGM) is 21 clear days’ notice
unless the Company:
i. has gained shareholder approval for the holding of
general meetings on 14 clear days’ notice by passing
aspecial resolution at the most recent AGM; and
ii. offers the facility for all shareholders to vote by
electronic means.
The Company would like to preserve its ability to call
general meetings (other than the AGM) on 14 clear days’
notice. This shorter notice period would not be used as a
matter of routine, but only where the flexibility is merited
by the business of the meeting and is thought to be in the
interests of shareholders as a whole.
Resolution 21 seeks such approval and, should this
resolution be approved, it will remain valid until the end
of the next AGM. This is the same authority as was sought
and granted at last year’s AGM.
22–25. Approval of employee share
planrules
In 2015, the Company adopted the current Marks and
Spencer Group Performance Share Plan 2015 (‘2015 PSP’),
Deferred Share Bonus Plan 2015 (‘2015 DSBP’), Restricted
Share Plan 2015 (‘2015 RSP’), and Executive Share Option
Plan 2015 (‘2015 EXSOP’, and together the ‘Existing Plans’).
The 2015 PSP and 2015 EXSOP were approved by shareholders
in 2015, and in 2020 shareholders approved the 2015
DSBP, the 2015 RSP and amendments to the 2015 PSP.
The Existing Plans are due to expire in July 2025 at the
end of their 10-year life. The Remuneration Committee
(the ‘Committee’) has undertaken a review of the design,
structure and rules of the Existing Plans, and concluded
that these remain appropriate. The Company is therefore
seeking shareholder approval for four replacement
plans, the Marks and Spencer Group Performance Share
Plan 2025 (the ‘PSP’), Deferred Share Bonus Plan 2025
(the ‘DSBP’), Restricted Share Plan 2025 (the ‘RSP’), and
Executive Share Option Plan 2025 (the ‘EXSOP’, and
together the ‘Plans’).
The rules of the Plans are substantially the same as the
Existing Plans and align with the Directors’ Remuneration
Policy, with updates to take account of developments in
legislation, corporate governance, market practice and
investor guidelines, and the operation of the Plans.
The PSP would remain the Company’s primary
performance-based long-term incentive arrangement
for its executive directors and most senior colleagues.
The DSBP, in which currently over 4,000 colleagues
participate, provides for part of participants’ bonuses
tobe provided in the form of shares. The RSP enables the
Company to grant awards in circumstances such as the
recruitment of executives. The Company has not made
grants under the 2015 EXSOP and does not currently
intend to grant share options under the EXSOP, but wishes
to have the flexibility to do so should it consider it
appropriate to do so in the future and, for any grants to
directors of the Company, only in line with the Company’s
prevailing Directors’ Remuneration Policy.
The Plans provide that in any 10-year period not more
than 10% of the Company’s issued share capital may be
issued under the Plans and any other employee share
plans adopted by the Company, reflecting institutional
investor guidance. However, in light of the removal from
the Investment Association’s Principles of Remuneration
of the separate limit that in any 10-year period not more
than 5% of a company’s issued share capital may be
issued under its discretionary share plans, and to provide
greater flexibility for the operation of the Plans, the 5% in
10-year limit contained in the Existing Plans has not been
replicated in the Plans.
The principal terms of the Plans are summarised in the
Appendix on pages 214 to 216 of this Notice.
26. Directors’ Fees
Resolution 26 proposes, in accordance with Article 87 of
the Company’s Articles of Association, an increase to the
maximum aggregate fees that can be paid to non-executive
directors each year, from £750,000 to£2,000,000.
The limit of £750,000 has not been increased since it was
introduced in 2006 and is no longer in line with current
market practice. The proposed increase in the limit
corrects this and provides flexibility to increase the
Board size ifappropriate and to continue to recruit and
retain suitable Board candidates in the future.
At this time, there is no intention to increase the number
of directors on the Board or the fees paidto directors to
use the additional headroom provided by the increased
limit. Information on the current fees paid to Non-Executive
Directors is on page 101 of the Annual Report. All fees are,
and will continue to be, paid in line with the Directors’
Remuneration Policy approved by shareholders (at the
2023 AGM).
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025206
27. Shareholder requisitioned resolution
The Board does not support this resolution and
recommends you vote against it.
A small group of shareholders coordinated by ShareAction,
has proposed a special resolution requesting detailed
data disclosures relating to our colleague pay and the
pay of our third-party suppliers and partners.
As a Board, we aim to be the most trusted retailer and the
most trusted employer. That is why we have invested
more than £285m in retail pay since 2022, with standard
hourly rates increasing by over 26%, more than double
the rate of inflation.
From 1 April 2025, pay for customer assistants increased
to £12.60 per hour (and £13.85 in London), in line with the
Real Living Wage. We also provide our colleagues with a
wide range of benefits which, when combined with the
new hourly pay rate, could be worth up to £15.40 an hour.
Our operations include stores, online, international
markets, a UK distribution network and global sourcing
offices supported by third-party contractors. We have
clear guidelines on how we contract with third parties
which are set out in our Global Sourcing Principles and
available to view on our website. We expect third parties
to meet their obligations to their employees and fulfil
their commitments to us, including compliance with our
ethical and safety standards; but as independent companies,
the Board believes it is right for those third-party contractors
to set their own rates of pay. We continue to work closely
with them to implement high standards.
At M&S, we aim to provide clear and comprehensive
disclosures and have good regular dialogue with a wide
range of our stakeholders. The Board does not believe it
is necessary to report beyond our current disclosures
which are already fulsome in their nature.
As a business, we are committed to doing the right thing
by our colleagues, customers and the communities we
serve. While we have had positive engagement with
ShareAction over the past year and understand the
reasoning for their request, the Board does not support
this resolution and recommends you vote against it for
the reasons set out above.
The statement submitted by ShareAction in support of
their requisitioned resolution can be found on page 208.
Recommendation
Your directors believe that the proposals described in
resolutions 1-26 are in the best interests of the Company
and its shareholders as a whole, and recommend you give
them your support by voting in favour of each of them,
asthey intend to in respect of their own beneficial
shareholdings. For the reasons set out above, the directors
do not support resolution 27 and recommend you vote
against this resolution.
Yours faithfully,
Nick Folland
General Counsel & Company Secretary
London, 20 May 2025
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 207
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
Shareholder statement in support
ofresolution 27
Effective approaches to setting minimum pay rates are
fundamental to human capital management, supporting
retention, recruitment and productivity of a motivated
workforce. Transparent reporting on approaches to pay
will enable investors to assess how M&S balances operational
costs with long-term sustainability, including the risks
associated with wages that do not meet the cost of living
for its employees.
M&S is an established retailer, with over 1000 stores and
directly employing over 64,000 workers in the UK. The
Company’s stated aim is to make ‘M&S a great place to
work, where everyone has a voice, can be themselves and
be their best’ (Marks and Spencer Group plc, Annual
Report & Financial Statements 2024), however its current
pay policy may not fulfil this ambition.
M&S currently pays directly employed workers in line with
the 2023 real Living Wage; £13.15 per hour in London and
£12.00 per hour nationally. However, the Company has
not made a long-term commitment to maintaining this
alignment. It also does not extend payment of the real
Living Wage to regular, on-site, third-party contractors,
such as cleaners and security guards, who are vital its
operations and likely to be in low-paid roles. The definition of
third-party contracted workers refers to staff: i. providing
a service, ii. on premises the employer is currently occupying
(rented or owned) or premises necessary to the work
being carried out, iii. for two or more hours a week for
eight or more consecutive weeks (in line with the requirements
of Living Wage Employer accreditation). In engagement,
the company has been unable to quantify the number of
third-party workers who are covered by this definition.
Employee wages constitute one of the largest costs for the
Company, with a significant proportion of the workforce
being paid close to statutory minimums. Therefore, the
Company’s approach to setting minimum wages is an
important part of its human capital management strategy
and of material concern to investors. Separate studies
conducted by MIT Sloan School of Management (2014),
University of Cambridge (2022) and Cardiff University (2023)
show that, despite tight profit margins in the retail sector,
improving pay helps to build resilient businesses by
lowering staff turnover and absence, improving productivity
and customer experience, as well as bringing
reputationalbenefits.
The real Living Wage, as defined by the Living Wage
Foundation, is the only independently calculated UK
hourly wage which is based on the cost of living, with
separate rates for London and the rest of the UK, providing
an established and evidence-based benchmark for
responsible company practice. Over 15,000 businesses
are accredited Living Wage Employers, including 50 of
the FTSE100.
In April 2025, the National Living Wage will be £12.21 per
hour and the National Minimum Wage will be £10 per
hour. The real Living Wage is £12.60 per hour in the UK
and £13.85 per hour in London.
By disclosing information that isn’t currently available,
the Report will support investors’ understanding of the
sources of information and the factors considered in
setting base rates of pay, including the potential impact
of wages on recruitment, retention and productivity, as
well as the considerations of the Board in determining
minimum wages that support the long-term
sustainability of the business.
Why this is relevant for UK retailers
The retail and wholesale sector is one of the largest
employers of low-paid workers in the UK, employing over
3.5 million workers with 23 per cent of jobs being paid
below the real Living Wage (Living Wage Foundation,
‘Employee jobs paid below the real Living Wage: 2023’,
2024). The sector also has an employee turnover rate of
41.6%, above the national average of 34% (CIPD, ‘Benchmarking
employee turnover’, 2024). The combination of low pay
and high employee turnover means that approaches to
setting minimum pay rates are particularly important to
UK retailers.
UK retailers are facing increases in employer National
Insurance contributions announced in the Government’s
Autumn Budget 2024. Given the large number of low-paid
workers in the sector, this policy will have a significant
impact. It is important for retailers to disclose their
approach to human capital management in this context,
particularly how they will address low pay in their workforce.
Rising prices of essential goods and services over the last
three years have left families struggling to make ends
meet, with 8.1 million working-age adults in the UK living
in poverty (Joseph Rowntree Foundation, ‘UK Poverty
2024’, 2024). While inflation has returned close to the
Bank of England’s 2 per cent target in the second half of
2024, food prices have risen by a third more than the rise
in the overall price levels since 2021, while retail energy
prices have increased by 90 per cent more. (Resolution
Foundation, ‘Paying the price’, 2024). These lasting rises
in prices disproportionately affect the poorest people in
society, who are forced to spend a larger proportion of
their income on essentials.
Wages that do not meet the cost of living increase the
burden on state support systems, worsen health outcomes
and suppress aggregate demand, externalising the costs
of low pay onto the wider economy. It is in the interests of
diversified investors to support the overall health and
resilience of the economy by addressing low pay and the
inequality it creates (The Shareholder Commons, ‘Living
Wage and the Engagement Gap’, 2023). Providing wages
that meet the cost of living is an action that retailers can
take to protect the economic and social systems upon
which prosperity is based.
There is recognition that pay practices which do not provide
a real Living Wage perpetuate economic insecurity, which
threatens both social and economic stability. As the
Business Commission to Tackle Inequality (2023) notes,
disparities in income and wealth contribute towards the
long-term erosion of social cohesion, diminishing trust in
institutions and fuelling political polarisation.
Paying the real Living Wage is also a key indicator
ofaCompany’s, and its investors’, support for the
achievement of the UN’s Sustainable Development Goal
8, promoting inclusive and sustainable economic growth,
employment and decent work for all.
NOTICE OF MEETING
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NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
NOTICE OF MEETING
Notice is given that the Annual General Meeting of
Marks and Spencer Group plc (the ‘Company’) will be
held at, and broadcast from, Waterside House, 35 North
Wharf Road, London W2 1NW, in accordance with the
information provided on page 203, on Tuesday 1 July
2025 at 11am (the ‘AGM’) for the purposes set out below.
Resolutions 1 to 17 and 22 to 26 will be proposed as
ordinary resolutions, resolutions 18 to 21 and 27 will
beproposed as special resolutions.
1. To receive the Annual Report and Financial
Statements for the 52 weeks ended 29 March 2025.
2. To approve the Directors’ Remuneration Report for
the year ended 29 March 2025, as set out on pages 84
to 103 of the Annual Report (excluding the part
summarising the Directors’ Remuneration Policy on
pages 89 and 90).
3. To declare a final dividend for the year ended
29March 2025 of 2.6p per ordinary share, payable
on4 July 2025 to shareholders on the Register of
Members as at the close of business on 30 May 2025.
To re-elect the following directors who are seeking annual
re-election in accordance with the UK Corporate
Governance Code:
4. Archie Norman
5. Stuart Machin
6. Evelyn Bourke
7. Fiona Dawson
8. Ronan Dunne
9. Tamara Ingram
10. Justin King
11. Cheryl Potter
12. Sapna Sood
To elect the following director appointed to the Board
since the last Annual General Meeting:
13. Alison Dolan
14. To resolve that Deloitte LLP be, and is hereby,
reappointed as auditor of the Company to hold office
until the conclusion of the next general meeting at
which accounts are laid before the Company.
15. To resolve that the Audit & Risk Committee determine
the remuneration of the auditor on behalf of the Board.
16. Political donations
To resolve that, in accordance with Section 366 of the
Companies Act 2006, the Company, and any company
which, at any time during the period for which this
resolution has effect, is a subsidiary of the Company,
beauthorised to:
(A) make political donations to political parties and/or
independent election candidates, not exceeding
£50,000 in total;
(B) make political donations to political organisations,
other than political parties, not exceeding £50,000
intotal; and
(C) incur political expenditure not exceeding £50,000
intotal;
provided that the aggregate amount of any such
donations and expenditure shall not exceed £50,000,
during the period beginning with the date of the passing
of this resolution and ending at the conclusion of the
AGM to be held in 2026 or on 1 October 2026, whichever
issooner.
For the purpose of this resolution, the terms ‘political
donations’, ‘political parties’, ‘independent election
candidates’, ‘political organisations’ and ‘political expenditure’
have the meanings set out in Sections 363 to365 of the
Companies Act 2006.
17. Directors’ authority to allot shares
To resolve that the directors are authorised under
Section551 of the Companies Act 2006 generally
andunconditionally to exercise all the powers of the
Company to allot shares in the Company and to grant
rights to subscribe for or convert any security into
sharesin the Company:
(A) up to a nominal amount of £6,853,821.93 (such
amount to be reduced by any allotments or grants
made under paragraph (B) below in excess of such
sum); and
(B) comprising equity securities (as defined in Section
560(1) of the Companies Act 2006) up to a nominal
amount of £13,707,643.86 (such amount to be reduced
by any allotments made under paragraph (A) above)
in connection with a pre-emptive offer:
i. to ordinary shareholders in proportion (as nearly
as may be practicable) to their existing holdings;
and
ii. to holders of other equity securities as required
by the rights of those securities or as the
directors otherwise consider necessary;
and so that the directors may impose any limits or
restrictions and make any arrangements which they
consider necessary or appropriate to deal with any
treasury shares, fractional entitlements, record dates,
legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter.
The authorities conferred on the directors to allot securities
under paragraphs (A) and (B) will expire at the conclusion
of the AGM of the Company to be held in 2026 or on
1October 2026, whichever is sooner, unless previously
revoked or varied by the Company, and such authority
shall extend to the making before such expiry of an offer
or an agreement that would or might require relevant
securities to be allotted after such expiry, and the
directors may allot relevant securities in pursuance
ofthat offer or agreement as if the authority conferred
hereby had not expired.
NOTICE OF MEETING
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NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
NOTICE OF MEETING CONTINUED
18. General disapplication of
pre-emption rights
To resolve as a special resolution that, subject to the
passing of resolution 17, the directors be empowered to
allot equity securities (as defined in Section 560(1) of the
Companies Act 2006) for cash under the authority given
by that resolution 17 (set out in this Notice of Meeting),
and/or to sell ordinary shares held by the Company as
treasury shares for cash, as if Section 561 of the Companies
Act 2006 did not apply to any such allotment or sale,
provided that such authority be limited:
(A) to the allotment of equity securities and/or sale of
treasury shares in connection with an offer of, or
invitation to apply for, equity securities:
i. to ordinary shareholders in proportion (as nearly
as may be practicable) to their existing holdings;
and
ii. to holders of other equity securities as required
by the rights of those securities or as the
directors otherwise consider necessary;
and so that the directors may impose any limits or
restrictions and make any arrangements which they
consider necessary or appropriate to deal with any
treasury shares, fractional entitlements, record dates,
legal, regulatory or practical problems in, or under
the laws of, any territory or any other matter; and
(B) in the case of the authority granted under paragraph
(A) of resolution 17 and/or in the case of any sale of
treasury shares, to the allotment of equity securities
and/or sale of treasury shares (otherwise than under
paragraph (A) above) up to a nominal amount of
£2,056,146.57; and
(C) to the allotment of equity securities and/or sale of
treasury shares (otherwise than under paragraph (A)
or paragraph (B) above) up to a nominal amount equal
to 20% of any allotment of equity securities and/or
sale of treasury shares from time to time under
paragraph (B) above, such authority to be used only
for the purposes of making a follow-on offer which
the Board of the Company determines to be of a kind
contemplated by paragraph 3 of Section 2B of the
Statement of Principles on Disapplying Pre-Emption
Rights most recently published by the Pre-Emption
Group prior to the date of this Notice of Meeting,
and shall expire at the conclusion of the AGM to be held
in 2026 or on 1 October 2026, whichever is sooner (unless
previously revoked or varied by the Company in general
meeting), provided that the Company may before that
date make offers, and enter into agreements, which
would, or might, require equity securities to be allotted
(and/or treasury shares to be sold) after the authority
ends and the directors may allot equity securities (and/or
sell treasury shares) under any such offer or agreement
as if the authority had not ended.
19. Additional disapplication of
pre-emption rights
To resolve as a special resolution that, subject to the
passing of resolution 17, the directors be empowered in
addition to any authority granted under resolution 18 to
allot equity securities (as defined in Section 560(1) of the
Companies Act 2006) for cash under the authority given
by that resolution 17 (set out in this Notice of Meeting)
and/or to sell ordinary shares held by the Company as
treasury shares for cash as if Section 561 of the Companies
Act 2006 did not apply to any such allotment or sale,
provided that such authority be limited:
(A) to the allotment of equity securities and/or sale of
treasury shares up to a nominal amount of £2,056,146.57,
such authority to be used only for the purposes of
financing (or refinancing, if the authority is to be used
within 12 months after the original transaction) a
transaction which the directors of the Company
determine to be either an acquisition or a specified
capital investment of a kind contemplated by the
Statement of Principles on Disapplying Pre-Emption
Rights most recently published by the Pre-Emption
Group prior to the date of this Notice of Meeting; and
(B) to the allotment of equity securities or sale of
treasury shares (otherwise than under paragraph (A)
above) up to a nominal amount equal to 20% of any
allotment of equity securities or sale of treasury
shares made under paragraph (A) above, such
authority to be used only for the purposes of making
a follow-on offer which the Board of the Company
determines to be of a kind contemplated by
paragraph 3 of Section 2B of the Statement of
Principles on Disapplying Pre-Emption Rights most
recently published by the Pre-Emption Group prior
tothe date of this Notice of Meeting,
and shall expire at the conclusion of the AGM to be held
in 2026 or on 1 October 2026, whichever is sooner (unless
previously revoked or varied by the Company in general
meeting) provided that the Company may before that
date make offers, and enter into agreements, which
would, or might, require equity securities to be allotted
(and/or treasury shares to be sold) after the authority
ends and the directors may allot equity securities (and/or
sell treasury shares) under any such offer or agreement
as if the authority had not ended.
20. Company’s authority to purchase its
own shares
To resolve as a special resolution that the Company is
authorised for the purposes of Section 701 of the Companies
Act 2006 to make one or more market purchases (as
defined in Section 693(4) of the Companies Act 2006) of
its ordinary shares of £0.01 each, such power to be limited:
(A) to a maximum number of 205,614,657 ordinary shares;
and
(B) by the condition that the minimum price which may
be paid for an ordinary share is £0.01 and the
maximum price which may be paid for an ordinary
share is the highest of:
i. an amount equal to 105% of the average market
value of an ordinary share for the five business
days immediately preceding the day on which that
ordinary share is contracted to be purchased; and
ii. the higher of the price of the last independent
trade of an ordinary share and the highest current
independent bid for an ordinary share on the
trading venue where the purchase is carried out;
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025210
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
in each case, exclusive of expenses, such power to
apply until the end of the AGM to be held in 2026 or
until 1 October 2026, whichever is sooner, butin each
case so that the Company may enter into a contract
to purchase ordinary shares which will or may be
completed or executed wholly or partly after the
power ends and the Company may purchase ordinary
shares pursuant to any such contract as if the power
had notended.
21. Calling of general meetings on
14days’ notice
To resolve as a special resolution that a general meeting
other than the Annual General Meeting may be called on
no fewer than 14 clear days’ notice.
22-25. Approval of employee share plan
rules
22. To resolve that the Marks and Spencer Group
Performance Share Plan 2025 (the ‘PSP’), the principal
terms of which are summarised in the appendix to this
Notice and the rules of which are presented to the meeting
and initialled by the Chairman for the purposes of
identification, is approved and to authorise the directors
of the Company to do all acts and things they consider
necessary or expedient to implement and give effect to
the PSP, and to establish further plans based on the PSP
but modified to take account of local tax, exchange control
or securities laws in overseas territories, provided that
any shares made available under any further plans will
count against any limits on individual or overall participation
in the PSP.
23. To resolve that the Marks and Spencer Group Deferred
Share Bonus Plan 2025 (the ‘DSBP’), the principal terms of
which are summarised in the appendix to this Notice and
the rules of which are presented to the meeting and
initialled by the Chairman for the purposes of identification,
is approved and to authorise the directors of the Company
to do all acts and things they consider necessary or
expedient to implement and give effect to the DSBP, and
to establish further plans based on the DSBP but modified
to take account of local tax, exchange control or securities
laws in overseas territories, provided that any shares
made available under any further plans will count against
any limits on individual or overall participation in the DSBP.
24. To resolve that the Marks and Spencer Group Restricted
Share Plan 2025 (the ‘RSP’), the principal terms of which
are summarised in the appendix to this Notice and the
rules of which are presented to the meeting and initialled
by the Chairman for the purposes of identification, is
approved and to authorise the directors of the Company
to do all acts and things they consider necessary or
expedient to implement and give effect to the RSP, and
to establish further plans based on the RSP but modified
to take account of local tax, exchange control or securities
laws in overseas territories, provided that any shares
made available under any further plans will count against
any limits on individual or overall participation in the RSP.
25. To resolve that the Marks and Spencer Group
Executive Share Option Plan 2025 (the ‘EXSOP’), the
principal terms of which are summarised in the appendix
to this Notice and the rules of which are presented to the
meeting and initialled by the Chairman for the purposes
of identification, is approved and to authorise the directors
of the Company to do all acts and things they consider
necessary or expedient to implement and give effect to
the EXSOP, and to establish further plans based on the
EXSOP but modified to take account of local tax, exchange
control or securities laws in overseas territories, provided
that any shares made available under any further plans
will count against any limits on individual or overall
participation in the EXSOP.
26. Directors’ fees
That the maximum aggregate fees that can be paid to
directors in accordance with Article 87 of the Company’s
Articles of Association each year shall be increased to
£2,000,000.
27. Shareholder requisitioned resolution
The Board recommends that shareholders vote
AGAINST this resolution.
To provide investors with the information needed to assess
the Company’s approach to human capital management,
shareholders request that the Board and management
oversee the preparation of a report outlining:
•
The Company’s approach to setting base pay for hourly
paid direct employees and which committee of the
Board has oversight of this;
•
Number of direct employees whose base pay is below
the real Living Wage, broken down by contract type
(permanent or fixed-term) and working hours (full-time,
part-time or non-guaranteed hours employees);
•
Hourly paid direct employee turnover rates, broken
down by base pay and working hours (full-time, part-time
or non-guaranteed hours);
•
The Company’s approach to setting base pay for regular,
on-site, third-party contracted staff and which
committee of the Board has oversight of this;
•
Number of regular, on-site, third-party contracted
staff whose base pay is below the real Living Wage; and
•
Cost/benefit analysis of implementing the real Living
Wage as a minimum rate of pay for direct employees
and regular, on-site, third-party contracted staff.
This Report will strengthen investors understanding of the
Company’s human capital management strategy and its
approach to ensuring its wage policies are reasonably
designed to provide all workers with a wage that meets the
cost of living. The Report should be prepared in a reasonable
timeframe and omit any proprietary information.
By order of the Board
Nick Folland
General Counsel & Company Secretary
London, 20 May 2025
Registered office: Waterside House, 35 North Wharf Road,
London W2 1NW. Registered in England and Wales.
No.4256886
NOTICE OF MEETING
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NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
Notes
1. Biographies of the directors seeking election (or
re-election) are given in the Annual Report on pages
62 to 63, including their membership of the principal
Board Committees, with further details available on
our website, corporate.marksandspencer.com. The
notice periods of the current directors are set out in
the Directors’ Remuneration Report on pages 100
and102.
2. Registered shareholders: members are entitled to
appoint a proxy to exercise all or any of their rights to
attend, speak and vote on their behalf at the AGM.
Members may appoint more than one proxy in
relation to the AGM, provided that each proxy is
appointed to exercise the rights attached to a
different share or shares held by that shareholder.
Aproxy need not be a shareholder of the Company.
Torequest one or more paper proxy forms (to appoint
more than one proxy), please contact our shareholder
helpline on +44 (0)345 609 0810. Please indicate the
number of shares in relation to which each proxy is
authorised to act in the box below the proxy holder’s
name. Please also indicate if the instruction is one of
multiple instructions being given, and if a proxy is
being appointed for less than your full entitlement,
please enter the number of shares in relation to which
each such proxy is entitled to act in the box below the
relevant proxy holder’s name. The proxy form
assumes you wish to vote on all your shares in the
same way. To vote only part of your holding or to vote
some shares one way and some another, please
contact the shareholder helpline. All proxy forms
must be signed and should be returned together.
3. If you would like to submit your vote electronically in
advance of the AGM, you can do so by accessing the
Lumi website, https://meetings.lumiconnect.com/100-
898-832-080. Instructions are available on page 202
of this Notice. Alternatively, you can submit your
instruction by visiting shareview.co.uk. All advance
proxy votes, regardless of how they are cast, are to be
returned by 11am on Friday 27 June 2025. If you return
paper and electronic instructions, those received last
by the Registrar before 11am on Friday 27 June 2025
will take precedence. Electronic communication facilities
are available to all shareholders and those that use
them will not be disadvantaged.
4. In the case of joint holders, where more than one of
the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the
Company’s Register of Members in respect of the joint
holding (the first-named being the most senior).
5. Votes submitted in advance of the meeting using the
Lumi website will constitute an instruction to appoint
the Chairman of the meeting as proxy. The shares
covered by the instruction will be voted as directed by
the shareholder in respect of the resolutions referred
to in this Notice of Meeting at the meeting and at any
adjournment of it.
6. To be valid, any proxy form or other instrument
appointing a proxy delivered by post or by hand
(during normal business hours only) must be received
at Equiniti, Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA, no later than 11am on Friday
27June 2025.
7. The appointment of a proxy electronically, the return
of a completed paper proxy form, other such
instrument or any CREST/Proxymity proxy instruction
(as described on the following page) will not prevent a
shareholder from attending and voting at the meeting
if they wish to do so. You must inform the Company’s
Registrar in writing of any termination of the authority
of a proxy.
8. Indirect shareholders: any person to whom this Notice
is sent who is a person nominated under Section 146
of the Companies Act 2006 to enjoy information
rights (a ‘Nominated Person’) may, under an agreement
between them and the shareholder by whom they
were nominated, have a right to be appointed (or to
have someone else appointed) as a proxy for the AGM.
If a Nominated Person has no such proxy appointment
right or does not wish to exercise it, they may, under
any such agreement, have a right to give instructions
to the shareholder as to the exercise of voting rights.
9. The statements of the rights of shareholders in
relation to the appointment of proxies in paragraphs 2
to 7 do not apply to Nominated Persons. The rights
described in these paragraphs can only be exercised
by shareholders of the Company.
10. Nominated Persons are reminded they should contact
the registered holder of their shares (and not the
Company) on matters relating to their investments
inthe Company.
11. To be entitled to join the meeting, submit questions
and vote (and for the purpose of the determination
bythe Company of the votes they may cast),
shareholders must be entered on the Register of
Members of the Company by 6.30pm on Friday
27June 2025 (or, in the event of any adjournment,
6.30pm on the date which is two working days prior
tothe adjourned meeting). Changes to the Register
ofMembers after the relevant deadline will be
disregarded in determining the rights of any person
tojoin, submit questions and vote at the meeting.
12. The following documents are available for inspection
at an agreed time at the Company’s registered office:
Waterside House, 35 North Wharf Road, London W2 1NW.
Email company.secretary@marks-and-spencer.com
during normal business hours on any weekday
(excluding public holidays).
i. Copies of the executive directors’ service contracts.
ii. Copies of the non-executive directors’ letters
ofappointment.
iii. Copies of the directors’ Deeds of Indemnity.
iv. A copy of the Company’s Articles of Association.
v. The rules for each of the proposed Marks and
Spencer Group employee share plans: Performance
Share Plan 2025, Deferred Share Bonus Plan
2025, Restricted Share Plan 2025, and Executive
Share Option Plan 2025.
Copies of these documents will be available at the
AGM upon request, both online and in person, from
10am on the morning of the AGM until the meeting’s
conclusion. Copies of the rules detailed in v. above will
also be available for inspection on the National Storage
Mechanism at https://data.fca.org.uk/#/nsm/
nationalstoragemechanism from the publication
date of this document.
NOTICE OF MEETING
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NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
13. Shareholders are advised that, unless otherwise
specified, the telephone numbers, website and email
addresses set out in this Notice or proxy forms are not
to be used for the purpose of serving information or
documents on the Company, including in relation to
proceedings at the Company’s AGM.
14. As at 20 May 2025 (the latest practicable date before
the publication of this Notice), the Company’s issued
share capital consists of 2,056,146,579 ordinary shares
carrying one vote each. No shares are held in treasury.
Therefore, the total voting rights in the Company as at
20 May 2025 are 2,056,146,579.
15. CREST members who wish to appoint a proxy/proxies
through the CREST electronic proxy appointment
service may do so for the AGM and any adjournment
thereof by using the procedures described in the
CREST Manual (available via euroclear.com). CREST
personal members or other CREST-sponsored
members, and those CREST members who have
appointed a service provider, should refer to their
CREST sponsor or voting service provider, who will be
able to take the appropriate action on their behalf.
16. For a proxy appointment or instruction made using
the CREST service to be valid, the appropriate CREST
message (a ‘CREST proxy instruction’) must be
properly authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications and must contain
the information required for such instruction, as
described in the CREST Manual. The message,
regardless of whether it constitutes the appointment
of a proxy or is an amendment to the instruction given
to a previously appointed proxy must, in order to be
valid, be transmitted so as to be received by Equiniti
(ID RA19) by 11am on Friday 27 June 2025. For this
purpose, the time of receipt will be taken to be the
time (as determined by the time stamp applied to the
message by the CREST Application Host) from which
Equiniti is able to retrieve the message by enquiry to
CREST in the manner prescribed by CREST. After this
time, any change of instructions to proxies appointed
through CREST should be communicated to the
appointee through other means.
17. CREST members and, where applicable, their CREST
sponsors, or voting service providers should note that
Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any
particular message. Normal system timings and
limitations will, therefore, apply in relation to the
input of CREST proxy instructions. It is the
responsibility of the CREST member concerned to
take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a
voting service provider, to procure that their CREST
sponsor or voting service provider(s) take(s)) such
action as shall be necessary to ensure a message is
transmitted by means of the CREST system by any
particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting
system providers are referred in particular to those
sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
18. The Company may treat as invalid a CREST proxy
instruction in the circumstances set out in Regulation
35(5) (a) of the Uncertificated Securities Regulations 2001.
19. If you are an institutional investor, you may be able to
appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the
Company and approved by the Registrar. For further
information regarding Proxymity, please go to
proxymity.io. Your proxy must be lodged by 11am on
Friday 27 June 2025 in order to be considered valid.
Before you can appoint a proxy via this process you
will need to have agreed to Proxymity’s associated
terms and conditions, which will govern the electronic
appointment of your proxy.
20. Any corporation that is a member can appoint one or
more corporate representatives who may exercise on
its behalf all of its powers as a member, provided they
do not do so in relation to the same shares.
21. Duly appointed proxies or corporate representatives
should contact the Company’s Registrar, Equiniti,
before 11am on Monday 30 June 2025 by emailing
hybrid.help@equiniti.com, for their unique username
and password to join the meeting. Please ensure a
valid proxy appointment has been made by no later
than the voting deadline of 11am on Friday 27 June
2025. Mailboxes are monitored 9am to 5pm Monday to
Friday (excluding public holidays in England and Wales).
22. Under Section 527 of the Companies Act 2006,
members meeting the threshold requirements set out
in that section have the right to require the Company
to publish on a website a statement setting out any
matter relating to:
i. the audit of the Company’s accounts (including
the Auditor’s Report and the conduct of the
audit) that are to be laid before the AGM; or
ii. any circumstance connected with an auditor of
the Company ceasing to hold office since the
previous meeting at which annual accounts and
reports were laid in accordance with Section 437
of the Companies Act 2006.
The Company may not require the shareholders
requesting any such website publication to pay its
expenses in complying with Sections 527 or 528 of the
Companies Act 2006. Where the Company is required
to place a statement on a website under Section 527 of
the Companies Act 2006, it must forward the
statement to the Company’s auditor no later than the
time when it makes the statement available on the
website. The business that may be dealt with at the
AGM includes any statement that the Company has
been required to publish on a website under Section
527 of the Companies Act 2006.
23. Any member joining the meeting has the right to ask
questions. The Company must cause to be answered
any question relating to the business being dealt with
at the meeting but no answer need be given if:
i. to do so would interfere unduly with the
preparation for the meeting or involve the
disclosure of confidential information;
ii. the answer has already been given on a website
in the form of an answer to a question; or
iii. it is undesirable in the interests of the Company
or the good order of the meeting that the
question be answered.
We will not permit behaviour interfering with anyone’s
safety and comfort, or the meeting’s orderly conduct.
Guests will be admitted at the Company’s discretion.
24. A copy of this Notice, and other information required
by Section 311A of the Companies Act 2006, can be
found at corporate.marksandspencer.com.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 213
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
APPENDIX
This appendix summarises the principal terms of the
Marks and Spencer Group Performance Share Plan 2025
(the ‘PSP’), the Marks and Spencer Group Deferred Share
Bonus Plan 2025 (the ‘DSBP’), the Marks and Spencer
Group Restricted Share Plan 2025 (the ‘RSP’), and the
Marks and Spencer Group Executive Share Option Plan
2025 (the ‘EXSOP’ and together with the PSP, RSP and
DSBP, the ‘Plans’).
The Company’s Remuneration Committee (the ‘Committee’)
will supervise the operation of the Plans under which
awards may be made over ordinary shares of the
Company (‘Shares’). Awards under the Plans may be made
at the discretion of the Committee. Under the PSP, DSBP
and RSP, awards may be granted in the form of options to
acquire Shares (‘Options’), conditional awards to acquire
Shares (‘Conditional Awards’) or forfeitable share awards
over Shares (‘Forfeitable Shares’). Awards under the PSP,
DSBP and RSP may have a nil or nominal cost award price,
or an award price set at such other amount as the
Committee determines. Equivalent cash-based or cash
satisfied awards may be granted under the Plans.
Sections 1 to 4 below relate to principal terms applying
specifically to the PSP, DSBP, RSP and EXSOP, respectively,
and section 5 relates to principal terms applying to all the
Plans, except where the context otherwise requires.
1. The PSP
Eligibility and grant
All employees (including executive directors) of the
Company or any participating subsidiaries are eligible to
participate in the PSP at Committee discretion. The
Committee determines which employees will be granted
awards under the PSP (‘PSP Awards’) and what type of PSP
Awards will be granted.
Individual limit
The maximum total market value of Shares over which an
individual may be granted PSP Awards in any financial
year shall not exceed the percentage of the individual’s
salary which is the director PSP maximum percentage in
the prevailing Directors’ Remuneration Policy (currently
300% of annual base salary).
Performance conditions and normal vesting
The vesting of PSP Awards may be made subject to the
satisfaction of one or more performance conditions set
by the Committee. PSP Awards normally vest following
the third anniversary of grant after determination of any
applicable performance conditions provided the
participant remains employed in the Company’s group
(the ‘Group’).
Leavers
A PSP Award will lapse if a participant ceases to hold
employment with the Group before the first anniversary
of grant. It will also lapse if a participant ceases to hold
employment between the first anniversary and vesting
unless the cessation is by reason of death, disability,
ill-health, injury, retirement with the agreement of their
employer, sale of the employing company or business
unit out of the Group or any other reason at the Committee’s
discretion. In these circumstances, the participant’s PSP
Award will vest on the normal vesting date (unless the
Committee permits vesting on cessation), to the extent
applicable performance conditions are satisfied. PSP
Awards will be pro-rated, unless the Committee otherwise
decides, to reflect the period between grant and cessation
as a proportion of the original vesting period and PSP
Awards granted as Options may be exercised during a
period of normally 12 months commencing on the date
ofvesting.
2. The DSBP
Eligibility
The DSBP provides for part of participants’ cash bonus in
respect of a financial year granted under the Company’s
discretionary bonus arrangements, to be awarded in the
form of awards over Shares (‘DSBP Awards’), at the
discretion of the Committee.
All employees (including executive directors) of the
Company or any of its participating subsidiaries) are
eligible to participate in the DSBP in any financial year,
provided they received a cash bonus under the Company’s
discretionary bonus arrangements in the same financial
year. DSBP Awards may also be granted to former employees.
The Committee determines which individuals will be
granted DSBP Awards and what type of DSBP Awards will
be granted.
Individual limit
The maximum total market value of Shares over which a
DSBP Award may be granted to any participant during
any financial year of the Company may not exceed such
amount as is specified in any discretionary bonus
arrangement operated by a participating company.
Normal vesting
DSBP Awards normally vest following the third
anniversary of the date of grant provided the participant
remains employed in the Group.
Leavers
A DSBP Award will lapse if a participant ceases to hold
employment with the Group prior to vesting, unless the
cessation is by reason of death, disability, ill-health, injury,
retirement with the agreement of the employer, sale of the
employing company or business unit out of the Group or
any other reason at the Committee’s discretion. In these
circumstances, the DSBP Award will vest on the normal
vesting date (unless the Committee determines it will vest
on the date of cessation). DSBP Awards will be pro-rated,
unless the Committee otherwise decides, to reflect the
period between grant and cessation as a proportion of the
original vesting period, and DSBP Awards granted as
Options may be exercised during a period of normally
12months commencing on the date of vesting.
3. The RSP
Eligibility
All employees (including executive directors) of the
Company or any participating subsidiaries are eligible
toparticipate in the RSP at Committee discrestion. The
Committee determines which employees will be granted
RSP Awards and what type of RSP Awards will be granted.
Conditions and normal vesting
The vesting of RSP Awards may be subject to the
satisfaction of one or more conditions which will be
stated at the date of grant. The Committee may choose
to apply no formal performance conditions, save for
continued service. RSP Awards normally vest, subject to
the satisfaction of any applicable performance conditions,
on the day after the end of the restricted period specified
by the Committee on the date of grant, provided the
participant remains employed in the Group.
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025214
Leavers
An RSP Award will lapse if a participant ceases to hold
employment with the Group prior to vesting, unless the
cessation is by reason of disability, ill-health, injury,
retirement with the agreement of the employer, sale of
the employing company or business unit out of the
Group or any other reason at the Committee’s discretion.
In these circumstances, the RSP Award will normally vest
on the normal vesting date (unless the Committee
determines it will vest on another date). RSP Awards will
be pro-rated, unless the Committee determines
otherwise, to reflect the period between grant and
cessation as a proportion of the original vesting period
and RSP Awards granted as Options may be exercised
during a period of normally 12 months commencing on
the date of vesting. In the event of death, an RSP Award
will vest if it has not already vested and an RSP Award
granted as an Option may be exercised during a period of
normally 12 months commencing on the date of vesting.
4. The EXSOP
Introduction
The EXSOP permits the grant of Options (the ‘EXSOP
Options’), at the discretion of the Committee. One part of
the EXSOP is designed to meet the requirements of a
Company Share Option Plan (‘CSOP’) under the Income
Tax (Earnings and Pensions) Act 2003, to which the
provisions of the EXSOP apply subject to and insofar as
permitted by the applicable requirements of the CSOP
legislation.
EXSOP Options will have an exercise price not less than
the Shares’ market value at grant (i.e. the average market
value over up to five business days before grant or, if the
Committee decides, on the business day before grant).
Eligibility
All employees (including executive directors) of the
Company and any participating subsidiaries are eligible
to participate in the EXSOP at Committee discretion. The
Committee determines which employees will be granted
EXSOP Options.
Individual limit
The maximum total value of Shares over which an individual
may be granted EXSOP Options in any financial year shall
not exceed the percentage of the individual’s salary
which is the director EXSOP maximum percentage in the
prevailing Directors’ Remuneration Policy (currently 250%
of annual base salary or on recruitment 400% of annual
base salary). The maximum total value of Shares for CSOP
grants may not exceed the CSOP legislation limit
(currently £60,000).
Performance conditions and normal vesting
The vesting of EXSOP Options may be made subject to
the satisfaction of one or more performance conditions
set by the Committee. EXSOP Options normally vest
following the third anniversary of grant after determination
of any applicable performance conditions provided the
participant remains employed in the Group.
Leavers
An EXSOP Option will lapse if a participant leaves the
Group before the first anniversary of grant. It will also
lapse if a participant leaves between then and vesting
unless because of death, disability, ill-health, injury,
retirement with the agreement of the employer, sale of
the employing company or business unit out of the
Group or any other reason at the Committee’s discretion.
In these circumstances, the EXSOP Option will vest on
the normal vesting date (unless the Committee permits
vesting on leaving), to the extent any applicable
performance conditions are satisfied. EXSOP Options will
be pro-rated, unless the Committee otherwise decides,
to reflect the period between grant and leaving.
5. Provisions applying generally to the Plans
Introduction
The principal terms below apply to each of the Plans and
to PSP Awards, DSBP Awards, RSP Awards and EXSOP
Options (together, the ‘Awards’), unless otherwise indicated.
Grant of awards
Awards may usually be granted under any of the Plans
during the six week period following (i) the date on which
the relevant Plan is approved by shareholders, or (ii) the
announcement of Company results for any period. Awards
may also be granted when the Committee considers
circumstances are sufficiently exceptional to justify the
grant of Awards (including, in the case of RSP Awards, to
allow the quarterly grant of RSP Awards where the
Committee determines appropriate).
No Awards may be granted under a Plan after 30 June 2035
(that is, the expiry of the period of 10 years beginning
with the date on which the relevant Plan was approved
byshareholders of the Company).
No payment is required for the grant of an Award.
Awardsare not transferable except on death and
arenotpensionable.
Dilution limit
No Award may be granted under a Plan if it would cause the
number of Shares issued or issuable in the preceding 10
years under that Plan and any other employee share plan
adopted by the Company to exceed 10% of the Company’s
issued share capital at that time. These limits include
treasury Shares unless institutional investor bodies decide
they need not count but exclude lapsed awards.
Adjustment of level of vesting
The Committee may adjust the level of vesting of an
Award (upwards or downwards) to ensure it is appropriate
and fair in the context of the overall performance of the
Company or the participant.
Malus and clawback
The Committee may in its absolute discretion determine
before vesting to reduce the number of Shares subject to
an Award, cancel the Award or impose further conditions
on the Award in circumstances it considers appropriate,
including, but not limited to, a material misstatement of
the Company’s audited results.
In addition, the Committee may in its absolute discretion
reclaim Awards paid to individuals for up to two years
after their vesting date in the case of the PSP, RSP and
EXSOP, and for up to three years from the date of grant in
the case of the DSBP, if the Committee determines the
circumstances to be appropriate.
Circumstances that may trigger clawback are:
•
the discovery of a material misstatement resulting in an
adjustment in the audited consolidated accounts of the
Company or a Group member,
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025 215
APPENDIX CONTINUED
5. Provisions applying generally to the Plans
continued
Malus and clawback continued
•
the assessment of any performance condition, terms or
conditions in respect of an Award or payment that were
based on error, or inaccurate or misleading information,
•
the discovery that any information used to determine
the number of Shares subject to an Award or amount
payable was based on an error, or inaccurate or
misleading information,
•
action or conduct of a participant occurs or is
discovered which, in the reasonable opinion of the
Committee, amounts to gross misconduct or a material
breach of the participant’s service agreement or
employment contract that falls short of gross
misconduct, and
•
events or behaviour of a participant that have had a
significant detrimental impact on the reputation of any
member of the Group, provided that the Committee is
satisfied that the relevant participant was responsible
for the reputational damage and that the reputational
damage is attributable to the participant.
Clawback may be effected by requiring transfer of
Shares, cash payment or reduction of Awards.
Post-vesting and post-cessation holding requirements
Following the vesting of an Award or the cessation of a
participant’s employment with the Group, the Shares
subject to the relevant Award may be subject to a holding
period, determined by the Committee at the time of grant,
during which they may not be assigned, or disposed of.
Where an Award has been granted subject to a post-vesting
or post-cessation holding requirement, the vested or
exercised Shares will be delivered (net of any tax liability)
to such nominee, or other holding arrangement, as the
Committee may determine.
Corporate events
On a takeover, scheme of arrangement or winding up
(except an internal reorganisation):
•
PSP Awards and EXSOP Options will vest to the extent
that any applicable performance conditions have, in the
Committee’s opinion, been satisfied. RSP Awards which
are subject to performance conditions will also vest to
the extent that any applicable performance conditions
have, in the Committee’s opinion, been satisfied. PSP
Awards and EXSOP Options (and RSP Awards which are
subject to performance conditions) will be pro-rated
(unless the Committee decides otherwise) to reflect the
period between grant and vesting.
•
DSBP Awards, and RSP Awards which are not subject to
performance conditions, will vest in full (unless and to
the extent the Committee determines otherwise).
•
Awards granted as Options may be exercised during a
period of normally one month following the relevant event.
On an internal reorganisation, Awards will be replaced by
equivalent awards over shares in a new holding company
unless the Committee decides otherwise.
If a demerger, special dividend or similar event is
proposed which, in the Committee’s opinion, would
materially affect the market price of Shares subject to
Awards, the Committee may determine those Awards will
vest (in the case of PSP Awards, RSP Awards and EXSOP
Options, to the extent applicable performance
conditions have, in the Committee’s opinion, been
satisfied). PSP Awards and EXSOP Options (and RSP
Awards subject to performance conditions) will be
pro-rated (unless the Committee decides otherwise) to
reflect the period between grant and vesting. Awards
granted as Options may be exercised during such period
as the Committee may determine.
Dividend equivalents, exercise of options and share
rights
The Committee may decide that a PSP Award, DSBP
Award or RSP Award will include the right to a payment in
cash or Shares on vesting, equivalent to dividends that
would have been paid on the Shares subject to the
relevant Award between grant and vesting.
Once vested, Options granted under the Plans may
normally be exercised up to the 10th anniversary of
theirgrant.
Shares allotted under the Plans rank equally with other
Shares then in issue (except for rights arising by reference
to a record date prior to their allotment).
Variation of capital
On a variation in the Company’s share capital, a special
dividend or any event that would materially affect the
market price of the Shares subject to an Award, the
Committee may adjust the number of Shares and/or
award price or option exercise price (where relevant)
subject to the Award as appropriate.
Alterations
The Committee may amend the rules of any of the Plans,
provided that no amendment to the advantage of
participants or employees may be made to the relevant
Plan to: (a) the provisions relating to who is eligible to
participate, (b) the individual limits on participation,
(c)the overall limits on the number of Shares that can be
issued or transferred from treasury under the Plan,
(d)the basis for determining a participant’s entitlement
to, and the terms of, Shares or cash, (e) the adjustments
that may be made in the event of any variation of capital,
or (f) the adjustment provision in the Plan rules, without
the prior approval of the shareholders of the Company in
a general meeting.
Shareholder approval is not required if the amendment is
minor and made to benefit the administration of the
relevant Plan, or to take account of a change in
legislation or to obtain or maintain favourable tax,
exchange control or regulatory treatment.
In the case of the PSP, the RSP and the EXSOP, the
Committee may amend any performance condition if an
event occurs which causes it to consider it would not
achieve its original purpose and the amended condition
is, in its opinion, no less difficult to satisfy but for the
event in question.
Overseas plans
The Committee may, at any time, establish further plans
based on any of the Plans for overseas territories. Any
such plan shall be similar to the relevant Plan, as
relevant, but modified to take account of local tax,
exchange control or securities laws. Any shares made
available under such further overseas plans must be
treated as counting against the limits on individual and
overall participation under the relevant plan.
NOTICE OF ANNUAL GENERAL MEETING 2025 CONTINUED
NOTICE OF MEETING
Marks and Spencer Group plc Annual Report and Financial Statements 2025216
Analysis of share register
Ordinary shares
As at 29 March 2025, the Company had 111,950 registered holders of ordinary shares.
Their shareholdings are analysed below. It should be noted that many of our private
investors hold their shares through nominee companies; therefore, the actual number
of shares held privately will be higher than indicated below.
Range of shareholding
Number of
shareholders
Percentage
of total
shareholders
Number of
ordinary
shares
Percentage
of issued
share capital
1-500 59,986 53.59 11,019,847 0.54
501-1,000 20,229 18.07 15,055,838 0.73
1,001-2,000 15,772 14.09 22,474,803 1.09
2,001-5,000 10,968 9.80 33,527,737 1.63
5,001-10,000 2,902 2.59 19,836,802 0.97
10,001-100,000 1,482 1.32 34,675,844 1.69
100,001-1,000,000 406 0.36 148,791,917 7.24
1,000,001-Highest 205 0.18 1,769,817, 382 86.11
Total 111,950 100 2,055,200,170 100
Category of shareholder
Number of
shareholders
Percentage
of total
shareholders
Number of
ordinary
shares
Percentage
of issued
share capital
Private 110,399 98.60 122,788,494 6.30
Institutional and corporate 1,551 1.40 1,932,411,676 93.70
Total 111,950 100 2,055,200,170 100
Useful contacts
Marks and Spencer Group plc
Registered Office
Waterside House, 35 North Wharf Road, London W2 1NW
Telephone: +44 (0)20 7935 4422
Registered in England and Wales (No. 4256886)
General queries
Customer queries: +44 (0)333 014 8555
Shareholder queries: +44 (0)345 609 0810
Or email: chairman@marks-and-spencer.com
Registrar/shareholder queries
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Telephone: +44 (0)345 609 0810 (please use the country code when contacting from
outside the UK).
Online: help.shareview.co.uk (from here, you will be able to securely email Equiniti with
your enquiry).
Students
Please note, students are advised to source information from our website.
Additional documents
An interactive version of our Annual Report is available online at
corporate.marksandspencer.com/investors.
Additionally, the Annual Report (which contains the Strategic Report) is available for
download in PDF format at corporate.marksandspencer.com/investors.
2025/26 financial calendar and key dates
29 May 2025 Ex-dividend date, final dividend
30 May 2025 Record date to be eligible for final dividend
1 July 2025 Annual General Meeting (11am)
4 July 2025 Final dividend payment date
5 November 2025* Half Year Results
†
8 January 2026* Results, Christmas Trading Update
†
† Those who have registered for electronic communication or news alerts at corporate.marksandspencer.com
will receive notification by email when this is available.
* Provisional dates.
Marks and Spencer Group plc Annual Report and Financial Statements 2025 217
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION CONTINUED
Shareholder queries
The Company’s Share Register is maintained by our Registrar, Equiniti. Shareholders
with queries relating to their shareholding should contact Equiniti directly using one of
the methods listed on pages 202 and 217 or by visiting shareview.co.uk. For more
general queries, shareholders should consult the Investors section of our corporate
website corporate.marksandspencer.com/investors.
Managing your shares online
Shareholders can manage their holdings online by registering with Shareview, a secure
online platform provided by Equiniti. Registration is a straightforward process and
allows shareholders to:
•
Sign up for electronic shareholder communications.
•
Receive trading updates and other electronic-only broadcasts by the Company
viaemail.
•
View all of their shareholdings in one place.
•
Update their records following a change of address.
•
Have dividends paid into their bank account.
•
Vote in advance of the Company’s general meetings.
M&S encourages shareholders to sign up for electronic communications as the Company
has found this creates a more engaged shareholder base. The reduction in printing costs
and paper usage also makes a valuable contribution to our Plan A commitments.
To find out more information about the services offered by Shareview and to register,
please visit shareview.co.uk.
Dividends
Subject to the relevant Board and shareholder approvals, dividends are paid in January
and July each year. Shareholders who receive their dividend payments directly into their
bank accounts will receive an Annual Dividend Confirmation in January, covering both
dividend payments made during the tax year.
Shareholder Panel
Established in 2016, our Shareholder Panel provides an opportunity for private
shareholders to hear more about how we’re reshaping M&S and to share views on the
business. The panel meets two to three times a year, mainly digitally but occasionally in
person. We try to refresh the panel each year so we can provide the opportunity to as
many shareholders as possible.
Applications to be part of the panel for 2025/26 are open; register your interest by
emailing privateshareholders@marks-and-spencer.com before 31 July 2025.
ShareGift
If you have a very small shareholding that is uneconomical to sell, you may want
toconsider donating it to ShareGift (registered charity no. 1052686), a charity that
specialises in the donation of small, unwanted shareholdings to good causes.
Youcanfind out more by visiting sharegift.org or by calling +44 (0)20 7930 3737.
Shareholder security
We are aware that some shareholders have received unsolicited and suspicious phone
calls received from purported ‘brokers’ who offer to buy their shares at a price far in
excess of their market value. It is unlikely that firms authorised by the Financial Conduct
Authority (FCA) will contact you with offers like this; these are likely part of a scam,
commonly referred to as a ‘boiler room’. The callers obtain your details from publicly
available sources of information, including the Company’s Share Register, and can be
extremely persistent and persuasive.
Shareholders are cautioned to be wary of any unsolicited advice, offers to buy shares at
a discount, sell your shares at a premium or requests to complete confidentiality
agreements with the callers. Remember, if it sounds too good to be true, it probably is!
We encourage shareholders to read the FCA’s guidance on how to avoid scams at
fca.org.uk/consumers/protect-yourself-scams.
AGM
The 2025 AGM will be a digitally-enabled meeting, held at, and broadcast from, M&S’
Waterside House Support Centre at 11am on Tuesday 1 July 2025. Shareholders are
invited to engage with the AGM electronically via the Lumi AGM platform, which can be
accessed by logging on to https://meetings.lumiconnect.com/100-898-832-080.
Onthis website, questions and voting instructions can be submitted, both during the
meeting and in advance. Details on how to join the meeting electronically and submit
votes and questions can be found on pages 201 to 203.
If a shareholder wishes to attend in person as part of our studio audience, we ask that
they register their intention to do so in advance, to help manage capacity on the day.
Details of how to register attendance can be found on page 203.
The meeting will also be available to view online after the event at
corporate.marksandspencer.com/investors.
M&S reserves the right to retain and use footage or stills for any purpose, including
Annual Reports, marketing materials and other publications.
Marks and Spencer Group plc Annual Report and Financial Statements 2025218
SHAREHOLDER INFORMATION
INDEX
A Page
Accounting policies 128
Adjusting items 141
Appointment and retirement of directors 104
Audit & Risk Committee Report 76
Auditor 82
Auditor’s remuneration 140
Auditor’s report 110
Annual General Meeting 200
B
Board 62
Borrowing facilities 162
Business model 8
C
Capital commitments 176
Capital expenditure 29
Colleague involvement 107
Conflicts of interest 105
Corporate governance 60
Cost of sales 140
Critical accounting judgements 136
D Page
Deadlines for exercising voting rights 201
Deferred tax 175
Depreciation 132, 157
Derivatives 162
Diluted earnings per share 146
Directors’ indemnities 105
Directors’ interests 97, 101
Directors’ responsibilities 109
Directors’ single figure of remuneration 91
Disclosure of information to auditor 109
Dividend cover 193
Dividend per share 22
E
Earnings per share 146
Employees 32
Employees with disabilities 108
Equal opportunities 107
ESG Committee Report 74
F
Finance income/costs 144
Financial assets 160
Financial instruments 162
Financial liabilities 162
Financial review 23
Fixed charge cover 193
G Page
Glossary of alternative performance measures 194
Going concern 108, 128
Goodwill 155
Groceries Supply Code of Practice 108
H
Hedging reserve 125
I
Income statement 122
Intangible assets 155
Interests in voting rights 107
International Financial Reporting Standards 128
Inventories 133
Investment property 124
K
Key performance indicators 22
L
Lease liabilities 162
N
Nomination Committee Report 72
P
Principal risks and uncertainties 54
Profit and dividends 105
Power to issue shares 106
Political donations 108
Marks and Spencer Group plc Annual Report and Financial Statements 2025 219
INDEX
INDEX CONTINUED
R
Risk management 52
Remuneration Policy 89
Remuneration Committee 84
Remuneration Report 91
S
Segmental information 138
Shareholder information 217
Share capital 176
Share schemes 89-91, 94-97
Significant agreements 106
Statement of cash flows 127
Statement of comprehensive income 123
Statement of financial position 124
Strategic progress 12
Subsidiary undertakings 187
T
Taxation 144
Total shareholder return 98
Trade and other payables 161
Trade and other receivables 160
Transfer of securities 106
V
Variation of rights 106
Viability statement 59
FINANCIAL STATEMENTS
Page
Consolidated income statement 122
Consolidated statement of comprehensive income 123
Consolidated statement of financial position 124
Consolidated statement of changes in equity 125
Consolidated cash flow statement 127
Note
1 Accounting policies 128
2 Segmental information 138
3 Expense analysis 140
4 Profit before taxation 140
5 Adjusting items 141
6 Finance income/costs 144
7 Income tax expense 145
8 Earnings per share 146
9 Dividends 147
10 Employees 147
11 Retirement benefits 147
12 Marks and Spencer
ScottishLimitedPartnership 152
13 Share-based payments 153
14 Intangible assets 155
15 Property, plant and equipment 157
16 Other financial assets 160
17 Trade and other receivables 160
18 Cash and cash equivalents 160
Note Page
19 Trade and other payables 161
20 Borrowings and other financial liabilities 162
21 Financial instruments 162
22 Provisions 174
23 Deferred tax 175
24 Ordinary share capital 176
25 Contingencies and commitments 176
26 Analysis of cash flows given in the
statementofcashflows 177
27 Analysis of net debt 178
28 Related party transactions 180
29 Investments in joint ventures and associates 180
30 Business Combination 181
31 Contingent assets 182
32 Subsequent events 182
Company financial statements 183
Notes to the Company financial statements 186
Group financial record 192
Marks and Spencer Group plc Annual Report and Financial Statements 2025220
INDEX
CBP031010
Marks and Spencer Group plc commitment to environmental
stewardship is reflected in this Annual Report, which has been
printed on Revive 100 Offset, which is 100% post-consumer recycled,
FSC
®
certified and totally chlorine free (TCF) paper. Printed in the UK
by Pureprint Group using vegetable-based inks, with 99% of dry
waste being diverted from landfill. The printer is a CarbonNeutral
®
company. Both the mill and the printer are certified to ISO 14001
(Environmental Management System) and ISO 9001 (Quality
Management System).
Please recycle.
Marks and Spencer Group plc Annual Report and Financial Statements 2025
Read the report online at corporate.marksandspencer.com/annualreport2025