Marks and Spencer Group plc, Preliminary Results 2007/08, 52 weeks ended 29 March 2008

Full Year Results:

• Sales up 5.1% at £9,022.0m: UK up 4.2%; International up 16.8%

• UK like-for-like sales -0.5%: General Merchandise -0.5%; Food -0.4%

• Adjusted profit before tax up 4.3% at £1,007.1m1

• Profit before tax up 20.5% to £1,129.1m

• Adjusted basic earnings per share up 7.9% at 43.6p1

• Basic earnings per share up 25.8% to 49.2p

• Dividend per share up 23.0% at 22.5p per share

• Bought-back 7.4% of issued share capital for £555.9m

1From continuing operations before property disposals and exceptional items

Quarter 4 Trading:

• Q4 UK sales +3.7%: General Merchandise +0.1%; Food +6.8%

• Q4 UK like-for-like sales -1.7%: General Merchandise -3.1%; Food -0.5%

Highlights:

Good progress against our five priorities:

• UK: Profit up 1.7%; Clothing volume market share +50bps to 11.2%; value

share held at 11.0%. Food share up 10bps to 4.3%;

• Property: 4.8% new space opened; 35% refurbished, taking total now

modernised to 70%;

• M&S Direct: Growth of 63% online; market share up 200bps to 6.2%;

• International: Profit up 33.0%; 20% space added during year; investments made in

Central and Eastern Europe and India; Store to open in Shanghai in

Autumn;

• Plan A: 17 of the 100 commitments delivered; progress on 77 underway

Sir Stuart Rose, Chief Executive, said:

“Despite tougher economic conditions in the second half, M&S had a good year. Profit

before tax was up at over £1.0bn with earnings per share up 8%. We have returned

£914m to shareholders through the buy-back of 7.4% of our shares and a 23% increase in

our dividend.

“The Company did not meet its internal bonus targets set in April 2007 and consequently

will not be paying a bonus. However, we will be paying £12.8m to store teams

recognising their hard work in delivering great service and dealing with significantly

increased volumes.

“We expect market conditions to remain difficult for the foreseeable future and are

managing our business accordingly. Tight stock control and management of costs are a

priority. M&S is well positioned to compete in this challenging market. We are giving our

customers better value and more choice than ever before. Brand momentum continues to

strengthen and we have made significant investment to improve the quality of our trading

space.

“We believe there is a real opportunity to expand our business in the UK and abroad, to

stretch the brand into new product areas and to develop our Direct business. Capital

expenditure is planned at £800-900m this year, demonstrating our confidence in the long

term future of our business.

“Trading for the first seven weeks of the year has been mixed. April was, as expected, a

difficult month, reflecting dramatically different weather patterns compared with the same

period last year. May to date has shown a marked improvement although we remain

cautious about consumer sentiment. We will update on our first quarter sales on 9 July

2008.”

Guidance for the financial year 2008/09

• The planned opening of new footage in the UK will add around 5.5% to total

space, representing a c.4.5% increase in General Merchandise footage and c.7.5%

increase in Food footage, on a weighted average basis. Total square footage at 29

March 2008 was 14.3m square feet.

• UK gross margin is expected to improve by 0 to +50bps. This will be driven mainly

by improvements in primary margin from better buying and improved supplier

terms.

• UK operating costs are expected to increase by c.7% with the impact of new

openings and cost inflation being offset by a c.£50m reduction in our underlying

cost base.

• Capital expenditure is expected to be £800-900m.

• The planned opening of new footage in our International business will add around

15-20% to total space. Total square footage at 29 March 2008 was 2.9 million

square feet.

• We intend to complete the buy back of 10% of our issued share capital during

2008.

• Pension finance income, based on the 29 March 2008 accounting of the pension

fund, is expected to be c£33m (2007/08: £58.9m).

• The effective tax rate is expected to be 28% (2007/08: 27%).

Source: Marks & Spencer Plc