Company Announcements
Annual Report - National Storage Mechanism
Related Companies
By LSE RNS
8 June 2017
Marks and Spencer Group plc (the "Company")
Annual Report and Financial Statements 2017
In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Listing Authority, and will shortly be available for inspection via the National Storage Mechanism at morningstar.co.uk/uk/NSM:
· Annual report and financial statements 2017;
· The Notice of Annual General Meeting of the Company which will be held at Wembley Stadium, Wembley, London HA9 0WS at 11am on Tuesday 11 July 2017; and
· Proxy forms for the 2017 Annual General Meeting.
In accordance with DTR 6.3.5(3) the Annual Report and Financial Statements 2017 is accessible on annualreport.marksandspencer.com. The Notice of Annual General Meeting is available on marksandspencer.com/investors.
A condensed set of Marks and Spencer Group plc financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's preliminary announcement on 24 May 2017. That information together with the information set out below which is extracted from the Annual Report and Financial Statements constitute the requirements of DTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and Financial Statements. Page and note references in the text below refer to page numbers in the Annual Report and Financial Statements 2017. To view the preliminary announcement, visit the Company website: marksandspencer.com/thecompany.
Principal risks and uncertainties
As with any business, we face risks and uncertainties on a daily basis. It is the effective management of these that places us in a better position to be able to achieve our strategic objectives and to embrace opportunities as they arise.
Below are details of our principal risks and uncertainties and the mitigating activities in place to address them. It is recognised that the Group is exposed to risks wider than those listed. However, we have disclosed those we believe are likely to have the greatest impact on our business at this moment in time and those that have been the subject of debate at recent Board or Audit Committee meetings.
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DESCRIPTION |
MITIGATING ACTIVITIES |
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Clothing & Home Recovery Our future performance will be impacted if we fail to meet customer expectations. As we continue to reassert our Clothing & Home credentials, we are focused on ensuring that product relevance, pricing and quality meet customer expectations. Meeting our customers' needs in all respects is key to driving improved performance in an increasingly competitive market. |
- Clothing & Home strategy and supporting workstreams in place to drive sales, target market share, control costs and drive profitability. - Monthly monitoring and challenge of delivery against strategy and performance indicators. - Continued focus on product quality and style, including adherence to our Clothing Quality Charter. - Ongoing engagement through customer panels and our Customer Insight Unit. |
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Food Safety and Integrity A food safety or integrity related incident occurs or is not effectively managed. Our brand is based on trust and our customers have high expectations of both the quality and integrity of our food. It is of paramount importance that we effectively manage safety and integrity, especially as we continue to grow our global food business. |
- Dedicated Food Technology team responsible for ensuring products are safe for consumption through rigorous controls and processes. - Long-established store, supplier and depot auditing programme in place. - Visible response to emerging customer concerns. - Proactive horizon scanning for future issues, including focus on fraud and adulteration. - Crisis management plan in place. |
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Corporate Responsibility Our reputation as a sustainable retailer relies on our ability to meet our social responsibility agenda and stakeholder expectations. Our sustainability credentials have historically been a key differentiator in the retail market. As our peers place greater focus on this and the regulatory environment continues to develop, it is essential that we continue to evolve our aims, maintain strong ethical standards and meet stakeholder expectations. |
- Continued commitment to and development of Plan A objectives to allow risks to be identified, mitigated and monitored. - Overarching governance of processes through Plan A leadership. - Mature supplier ethical auditing programme, including independent third party auditors, across our Clothing & Home and Food businesses. - Policy on supplier selection processes. - Business-wide human rights policy and ownership. - Updated Global Sourcing Principles to incorporate requirements of Modern Slavery Act. - Signatory to United Nations Global Compact principles covering human rights, the environment and ethical behaviour. - Membership of the Ethical Trading Initiative. |
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Information Security (including Cyber) We experience a major information security breach. Our business, and society, continues to be subject to external threats to security - including external hackers and viruses, physical security attacks or sensitive data being lost or accessed without authorisation. |
- Established security controls, including policies, procedures and use of security technologies. - Dedicated Head of Data Governance. - Data Governance Group in place. - Dedicated Corporate Security team with ongoing focus on improving physical security environment. - Dedicated Head of Cyber Security, leading a team of cyber security experts and analysts, with 24/7 monitoring and defence tools. - Third party cyber maturity assessment performed. - Ongoing monitoring of developments in cyber security threats, engaging with third party specialists as appropriate. - Control of sensitive data through limited and monitored access and the roll-out of systems with enhanced security. - Specific team dedicated to managing security requirements for M&S.com. |
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Technology To support future profitable growth, we need to keep pace and develop our technology capability. Our business needs to identify, keep pace with and embrace developments in technology. This will encompass a range of technology demands driven by the needs of our customers, deployment of tools that promote effective and flexible working and maintaining an overarching IT infrastructure that enables resilient business delivery. |
- Digital lab in place developing new technology enabled solutions. - Proactive simplification of IT infrastructure through clearly defined technology roadmaps for all business areas. - Structured deployment of Smarter Working principles and enabling technologies. - Overall review of future IT strategy under way. |
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Customer Proposition & Experience Our performance and reputation will be impacted if we fail to deliver a competitive and reliable customer proposition and experience across all channels. Notwithstanding the growth delivered and expected to continue in our M&S.com business, we need to ensure that we meet expectations however our customers choose to shop or have their order delivered. |
- Appointed dedicated Head of Customer Experience. - Omnichannel approach adopted to drive consistent experiences online and in store. - Proactive monitoring of social media to observe and respond to trends in customer experience. - Further integration of M&S.com functions within core teams to drive consistency across all channels. - Robust business continuity plans, incident reporting and management procedures in place across all channels. - Ongoing review of future strategic opportunities to meet customer needs. |
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Talent & Succession We need to attract, develop, motivate and retain the right individuals to achieve our operational and strategic objectives. Effective talent management is essential to deliver current and future business requirements. We recognise the importance of both developing internal talent and successfully integrating external hires. |
- Completion of top tier talent review. - Review of cross-Group talent management processes under way. - Third party review completed to help support and develop skill set of senior leadership group. - Targeted development programmes in place. - Clear line manager responsibility for succession planning supported by appropriate people forums. - Ongoing focus on enhancing recruitment processes across the business. |
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Margin Sourcing or cost pressures impact our margin performance. While our business continues to face challenging foreign currency headwinds, other factors place significant pressure on margin performance. These include the availability of raw materials and pricing strategies in the context of the overall retail market. |
- Clearly defined margin targets across the business with performance monitored and reported to management. - Comprehensive sourcing plans in place for key products/suppliers. - Currency strategy to actively manage foreign exchange rate fluctuations. - Ongoing monitoring of pricing strategy in the context of the wider retail market. - Strong engagement with buying teams to communicate fluctuations in raw material prices and foreign exchange rates. - Enhanced Clothing & Home product development system in place, improving efficiency to leverage margin growth. |
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Brand Our brand needs to evolve with consumer lifestyles and attitudes for us to successfully attract and retain customers. We need to ensure that we recruit, engage and retain customers through the ongoing relevance of the M&S brand. |
- Focus on clearly defined brand purpose to Make Every Moment Special, connecting with customers through our Spend It Well campaigns with greater focus on lifestyle and outlook. - Engagement with customers through our Customer Insight Unit and focus groups, providing rich insights and quantifiable data. - Strengthened Customer Insight Unit leadership. - Continued investment in the development of Sparks. |
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UK Store Estate We fail to maintain and develop a UK store estate that is relevant to future customer preferences and supports business performance. As consumer behaviours continue to evolve, our physical store estate planning must align to our business strategy, providing better range authority in more convenient locations, while generating higher space productivity. |
- Full review of our UK store portfolio during 2016/17. - Multi-year programme under way to improve our estate to better meet customers' needs. - Strengthened property capabilities, including appointment of senior external hires. - Cross-business Steering Group and working groups set up to manage and monitor the store estate change programme. - Property Board approval process and governance framework in place. - Continued expansion of our Simply Food business alongside improvements to the UK store estate. |
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Profitable Growth To drive profitable growth our business needs to innovate as well as successfully deliver additional space and strong like-for-like performance. To generate long-term shareholder value, we need to identify alternative revenue streams and opportunities to leverage growth, while also ensuring that we drive the performance of our existing products and services. |
- Customer Insight Unit provides horizon scanning of changes in consumer behaviour. - Review of innovation processes underway. - New operating model implemented to drive efficiency and effective decision-making. - Business restructure completed to help drive our business objectives and strategic aims. - Ongoing focus on establishing foundations for new paths to growth. |
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Third Party Management To drive value for our business we need to successfully manage and leverage our third party relationships and partnerships. Our business relies on a number of significant third party relationships. To ensure that we continue to drive value for the business, it is essential that we work collaboratively, clearly define requirements and proactively manage our third parties. |
- Ongoing Board-level review of key relationships and partnerships. - Dedicated personnel managing key contracts. - Defined service level agreements and key performance indicator standards in place for key contracts. - Defined contract governance and oversight standards. - Strong engagement with in-house Legal and Procurement teams. - Periodic, independent review of performance. |
The risks listed do not comprise all those associated with Marks & Spencer and the numerical referencing does not denote an order of priority. Additional risks and uncertainties not presently known to management, or currently deemed to be less material, may also have an adverse effect on the business. These less material risks are kept in view in case their likelihood or impact should show signs of increasing.
Further information on the financial risks we face and how they are managed is provided on pages 118 to 123.
Directors' Responsibility Statement
The 2017 Annual Report contains the following statements regarding responsibility for the financial statements in compliance with DTR 4.1.12. Responsibility is for the full Annual report and financial statements 2017 and not the condensed statements required to be set out in the Annual Financial Report announcement.
The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the directors, whose names and functions are listed on pages 36 and 37 of the Annual Report, confirm that, to the best of their knowledge:
- The Group financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole.
- The Management Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
- The Annual Report, taken as a whole, is fair, balanced and understandable, and provides the necessary information for shareholders to assess the Group's performance, business model and strategy.
The Directors of Marks and Spencer Group plc are listed in the Group's 2017 Annual report, and on the Group's website: corporate.marksandspencer.com.
For further information, please contact:
Group Secretariat: +44 (0)20 8718 9888
This information is provided by RNS
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