Embattled Marks & Spencer has said it now expects to take a £300m hit to profits this year from the Easter cyber attack that crippled its systems, which it added could disrupt its online business until July.
Simultaneously, M&S said pre-tax profits rose by a better-than-forecast 22% to £876m in the year to 30 March – just before the cyber attack, which has been attributed to the hacking collective Scattered Spider – with sales up 6% to £13.9bn.
The company added that it had more than £400m of funds in the bank and was “in the best financial health we’ve been in 30 years” before the hackers hit, and that the expected financial impact would be significantly mitigated by insurance and cost reductions.
Analysts said they expected to cut profit forecasts for this year by at least 10% but recent reports suggested at least £100m of the cost should to be pulled back from insurance.
The Easter attack, which M&S is still struggling to recover from, forced the retailer to stop orders via its website, through which it sells fashion, homeware and gifts, while deliveries of food and fashion into stores and some deliveries to its online food partner, Ocado, have also been disrupted.
M&S said sales in its stores had “remained resilient.”
The has also admitted that some personal information relating to thousands of customers – including names, addresses, dates of birth and order histories – was taken in the cyber-attack.
M&S CEO Stuart Machin thanked customers and staff for their support during the incident, adding that the business was now focussed on recovery and “will come out of this in better shape, and continue our plan to reshape M&S.”
He went on: “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.
Machin said that in the first few weeks of the new financial year, prior to the cyber-attack, M&S had continued with “sales growth ahead of budget across both businesses.” Indeed, M&S’s figures show that its food business’ sales were up almost 9% to £9bn in the year to March 30, while fashion and homeware sales were up 3.5% to £4.2bn, despite the well-publicised economic difficulties of the last couple of years. The company did not reveal how much sales had fallen since the attack.
The attack on M&S was swiftly followed by further attacks on fellow national retail treasures Co-op and Harrods, also thought to be the work of the elusive Scattered Spider, in what appears to be a concerted campaign against high-profile UK businesses.
