Compare and contrast. Here is the former CEO of Marks & Spencer, Marc Bolland, patting his back when he checked in 2016: “I’ve done the hard work that was needed. I’m very happy with what I’ve done over the last few years and I think I built the foundations. “
The declaration of a weightlifting triumph was not convincing at the time, and Bolland’s efforts were soon exposed as a light exercise in relaxation at best. Well-known problems, in fashion, logistics and abroad, re-emerged because they never disappeared. In 2018, Steve Rowe, the successor who was now leaving, launched a strategy of “face the facts” that was clearly behind.
In this context, Rowe’s farewell assessment on Wednesday was infinitely better because it was nuanced. Yes, he also said that M&S had “fundamentally changed” his watch, which is true thanks to the closure of stores, a withdrawal from France, the online food partnership with Ocado and the elimination of tired domestic fashion brands. . But Rowe also explained the elements that have not been done.
His list was not short. Basic technology in the clothing and home department needs an upgrade. Both sides of the business have to invest in their supply chains: the power operation was described as “less efficient” than that of its rivals. Some of the stores are still “outdated and misplaced.” The reduction in the area devoted to clothing has not accompanied the change in demand for the network. Top marks for honesty.
Rowe has been unlucky in his last round because the tightening of the cost of living has nearly halved the price of M&S shares since January. The two profit improvements from last fall have almost been forgotten.
But M&S is clearly in better shape than in the recent past, mostly because cash is flowing again, even though shareholder dividends aren’t yet. The thing is, credibility improves if you don’t airbrush the stains. Others should try the approach.
A more complete account is needed after the unattractive departure of JD Sport
And here’s how not to communicate with shareholders, courtesy of JD Sports: Make a statement 11 minutes before the stock market closes for the day that says the CEO, a man in office since 2004, comes out “with immediate effect “as a result of a” continuous review of government and internal controls “.
JD’s share price fell 10% in the remaining minutes of trading, not surprisingly, as the statement raised more questions than it answered. Peter Cowgill had been the architect of JD’s rise to the FTSE 100 index, a period in which the company has eclipsed Sports Direct and globalized. Now it came out without elegance.
Part of the backdrop is the company’s £ 4.3m fine in February by the Competition and Markets Authority for sharing commercially sensitive information with Footasylum, a business it had bought but was supposed to had to be run separately during the pre-authorization period. Another part, however, seems to be JD’s slowness in executing a plan, announced last summer, to split Cowgill’s roles.
If the man himself was blocking the reform, then yes, an instant exit is a way to solve the problem. And since Stephen Rubin’s Pentland group owns 52% of the shares, he can get away with it.
Minority shareholders, however, can reasonably expect a more complete account of the confrontation. For example, what will Cowgill pay for on departure?
Aside from the extra tax, SSE still seems to be in a safe place
Business secretaries are not usually injected into the company’s annual earnings announcements, so it was rare to see Kwasi Kwarteng appear on SSE to hail the company’s £ 24bn investment program in the UK for in the next decade as “a great vote of confidence in our energy security plans.”
What was Kwarteng signaling? Who still opposes unexpected energy taxes? Should this SSE get an A * in any “show us your investment” exam set by Rishi Sunak? Whatever the chancellor does, will the government continue to get along with the wind farm builders with a spirit of peace, love and mutually beneficial contracts?
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It could be any of the above. Meanwhile, SSE investors are likely to feel more relaxed in the face of the unexpected threat, even if it extends to generators. The group’s adjusted operating profits rose 15% to £ 1.5 billion last year, but the wind at the sails comes from updating profit growth to 2026. Instead of 5% – 7%, SSE now sees 7% -10%. Since the rate is compounded, the improvement is significant.
SSE credited higher inflation, more volatility in the energy market and better prospects for its thermal and hydraulic assets, where flexibility in generation is suddenly a great virtue.
After the small oscillation on Tuesday, the shares return to 3% of their all-time high. The self-proclaimed “champion of clean energy” in the UK still seems a safe place.