Marks & Spencer’s profits have been decimated after it was hit by a cyber-attack which left shoppers unable to buy online from the company for months.
The food and fashion chain’s boss said the April attack was “an extraordinary moment in time” and revealed that its statutory profit before tax was down 99% for the first half of the year, compared with the year prior.
It made just £3.4m in the six months to September, down from £391.9m for the same period last year.
As well as disrupting its online business, the hack affected the company in-store, leaving shelves bare in the weeks after M&S was targeted.
M&S said it had received £100m of insurance money related to the cyber-attack, close to the amount the incident had cost it so far, although it expects further costs in the coming months.
READ MORE: ASA censures Manchester online travel agent over “misleading” airport lounge access ads
In another measure of profit which strips out costs from unusual events, it made £184m for the first half of the year, compared with £413m the year prior.
The fashion and food company was forced to suspend online orders for almost two months, with its click and collect service suspended for a further two months.
Revealing its financial figures for the six months to September, M&S said “the underlying strength” of the chain meant it was “getting back on track” and expected full-year profits to be in-line with last year.
Analyst Judith MacKenzie, head of Downing Fund Managers, told BBC’s Today programme this morning that it was reassuring that the main part of M&S’s business, homewares and fashion, only saw sales decline around 16%.
“Given that they were offline for most of the trading period and really only came back online for their click and collect in August, it’s pretty resilient,” she said
Although clearly damaging, the costs related to the attack were actually lower than M&S had initally expected. The retailer earlier estimated that the attack would cost it around £300m, although chief executive Stuart Machin suggested the figure probably still remained broadly accurate in the long run: “In May, we anticipated the material impact of the incident on group operating profit to be around £300m this financial year, and we are broadly in line with that,” he explained, saying that there were still costs from managing the impact, including more IT staffing, and increased food wastage as the firm switched to manual processing during the cyber attack, to be accounted for.
M&S forecast that profits for the second half of the year would recover to the levels seen in 2024, “as the residual effects of the incident continue to reduce in the coming months.”
Machin added that the firm was looking forward to a profitable Christmas period, and said sales were going well of its much-loved rose mulled wine, and men’s washable tuxedos.
The M&S cyberattack was one of a spree on leading UK businesses this year that has also seen bottom lines hit at big British names including Jaguar Land Rover, Co-op and Harrods.
