M&S: Astonishing cost of Marks and Spencer cyber attack is revealed in half-year report
Marks & Spencer’s half-year profits have taken a major hit after a cyber attack this year.
The retail giant reported underlying pre-tax profits of £184.1m for the six months to September 27, down 55.4% from £413.1m a year earlier - so less than half.
On a reported basis, profits were almost wiped out, plunging to £3.4 million from £391.9 million a year ago. M&S said the cost of the attack is set to total around £136m, including about another £34m in the final six months, but it was able to recover £100m in its first half through an insurance payout for the hack.
Stuart Machin, chief executive of Marks & Spencer, said: “The first half of this year was an extraordinary moment in time for M&S.
“However, the underlying strength of our business and robust financial foundations gave us the resilience to face into the challenge and deal with it. We are now getting back on track.”
He said the group also faced cost increases of more than £50 million from the national insurance hike in April over its first half, but that he expects profits to be “at least in line with last year” in the final six months of its financial year as it ramps up cost-cutting.
He added: “The retail sector is facing significant headwinds – in the first half, cost increases from new taxes were over £50 million – but there ismuch within our control and accelerating our cost-reduction programme will help to mitigate this.”