M&S profits almost wiped out after cyber hack left shelves empty

M&S’s income had been nearly worn out after it was hit by a cyber-attack which left consumers unable to purchase on-line from the corporate for months.The meals and trend chain’s boss mentioned the April assault was “a rare second in time” and revealed that its statutory revenue earlier than tax – the determine that takes in to account all prices for a interval – was down 99% for the primary half of the yr, in contrast with the yr prior.It made simply £3.4m within the six months to September, down from £391.9m for a similar interval final yr.In addition to disrupting its on-line enterprise, the hack affected the corporate in-store too, leaving some cabinets naked within the weeks after M&S was focused.M&S mentioned it had acquired £100m of insurance coverage cash associated to combating the cyber-attack, across the quantity which the incident had value it to this point, although it expects additional prices within the coming months.In one other measure of revenue which strips out prices from uncommon occasions, it made £184m for the primary half of the yr, in contrast with £413m the yr prior.The style and meals firm was compelled to droop on-line orders for nearly two months, with click on and acquire suspended for nearly 4 months.Revealing its monetary figures for the six months to September, M&S mentioned “the underlying energy” of the chain meant it was “getting again on observe” and anticipated full-year income to be in-line with final yr.One analyst informed BBC’s Immediately programme that it was reassuring that the primary a part of M&S’s enterprise, homewares and trend, solely noticed gross sales decline round 16%.”On condition that they had been offline for a lot of the buying and selling interval and actually solely got here again on-line for his or her click on and acquire in August, it is fairly, fairly resilient,” mentioned Judith MacKenzie, head of Downing Fund Managers.She mentioned it was “excellent” that its meals gross sales had been up 7.8% over that point regardless of it being “a fairly horrendous interval” for the corporate.The truth that prices associated to the assault had been decrease than anticipated was constructive, mentioned Lucy Rumbold, fairness analysis analyst at Quilter.M&S had earlier estimated that the assault would value it round £300m.On a name after the outcomes, chief govt Stuart Machin mentioned: “in Might, we anticipated the fabric influence of the incident on group working revenue to be round £300m this monetary yr, and we’re broadly according to that”.He mentioned there have been prices from managing the influence, together with extra IT staffing, and elevated meals wastage because the agency switched to handbook processing in the course of the cyber assault.Ms Rumbold mentioned there was a view from buyers that the disruption attributable to the hack “was a one-off”.”Regular buying and selling can due to this fact resume and the constructive story M&S had going previous to the cyber-attack stays in place.”M&S mentioned within the second half of the yr it forecast income would get well to the degrees seen in 2024, “because the residual results of the incident proceed to cut back within the coming months.”Mr Machin mentioned the agency was wanting ahead to a worthwhile Christmas interval, and mentioned gross sales had been going properly of its much-loved rose mulled wine, and males’s washable tuxedos.Whereas income at M&S tumbled, different retailers have seen a lift in gross sales as individuals turned to them for buying after the cyber assault.Subsequent continued to see gross sales overperform, with its newest leads to October seeing a ten.5% enhance in gross sales. Nevertheless, that was not so good as earlier within the yr when it had seen “distinctive efficiency” within the speedy aftermath of the M&S cyber assault.