This has all helped it to sell 11

This has all helped it to sell 11.6 per cent more items at full price in the past three months, compared with 5.3 per cent more in the previous quarter.But with the cost of doing business soaring, by an estimated 6 to 7 per cent at the operating level during the next year, the time has come for the retailer to change tack slightly. To pay for this M&S is spending up to £570m, about £40m more than it had originally budgeted.To date, the group’s turnaround has been predicated on better stock control, screwing more money from its suppliers and selling more clothes at full price, actions that have all strengthened its profit margin and saved it money A cool £260m in the past 12 months alone, in fact. By Christmas, one in three of M&S’s 400-odd stores will have been given a makeover to make them “brighter, lighter and more contemporary” in the words of Mr Rose. I have to see the autumn/winter collection first,” Ms Zedda added.In an attempt to cement that recovery, M&S will embark on the biggest store refurbishment programme undertaken by any UK retailer in the past 10 years. They have turned it around very well but they have to keep it up I’m not completely sold. It has very daring, directional pieces that you can actually find in store,” she said.Dresses that softly hint of 1980s puffballs with rolled-over hems and City shorts in this season’s navy and white colour chart have made it on to the shop floor.”They have upped their credibility. Stuart and his team are clearly doing a good job for shareholders and employees alike.”Yet Mr Rose’s caution was echoed elsewhere.

Philip Dorgan, at Panmure Gordon, said: “After this excellent Q4, it would seem churlish to challenge that this will happen, but we believe that the real hard work starts now, although the force is clearly with them given the easy comparables in Q1 and Q2.”Francesca Zedda, the executive fashion editor at Easy Living, a Conde Nast women’s title aimed at M&S’s archetypal female fan, has a foot in both camps when it comes to calling the recovery “Definitely this season M&S is better than it’s ever been. The only reason current estimates did not soar above the £745m to £755m range signalled yesterday by M&S was because the numbers included £26m of accelerated asset writedowns because it is modernising its store portfolio and a total staff bonus of £70m, which was £10m more than expected.The upgrades for next year, however, put M&S within a two-year whisker of achieving profits of £1bn once more, according to Deutsche Bank, its house broker, among others.Kiki MacDonald, the investment director at Standard Life, one of the group’s top shareholders, said: “The recovery is firmly on track although we believe there is still further potential at M&S. And this against a tough retail backdrop and up to eight inches of snow on the ground.M&S’s numbers contrasted particularly sharply with those recently reported by Next, which unveiled its worst sales figures for more than three years, with an underlying fall in sales of about 9 per cent.Building on a crescendo of profit upgrades, analysts again increased their forecasts yesterday both for the year just ended and the coming one. These are very, very good like-for-like figures at a time when everyone else is struggling to stay above the line and most people are below it.”M&S said its like-for-like general merchandise sales, which includes clothing, home and footwear, rose 8.2 per cent in its fourth quarter, while food sales climbed 6.8 per cent on the same basis. Richard Ratner, at Seymour Pierce, who was no fan of Mr Rose’s at the outset, said: “He is being overcautious because he’s done extremely well. “I do hope our shareholders feel we have vindicated ourselves when we said what value there was in the business when we turned the offer down in 2004,” he said.But with yesterday’s trading update showing the third consecutive quarter of growth – and that in a year when Mr Rose said he’d be pleased with just one week of positive sales – is the man parachuted in to save the British icon of retailing from falling into Mr Green’s clutches being too modest?Some analysts certainly think so. We are just making steady progress.”He promised to revisit the question only if the group managed to grow its sales this Christmas when it will be up against much tougher comparisons.Mr Rose did concede that the sort of progress M&S is making, which includes grabbing market share from rivals in all of its categories, puts the retailer six months ahead of his own game plan, drawn up during the frenzy of Mr Green’s advances.

In investors’ minds, at least, Mr Rose has delivered the recovery he promised when batting off Philip Green’s 400p-per-share advances two summers ago.
Yet Mr Rose is anxious not to count his chickens, even if they are the succulent oven-ready Oakham birds that feature in the group’s widely mimicked food porn adverts on TV.He is particularly keen not to hold himself hostage to fortune in the manner of Luc Vandevelde, the former chairman who declared M&S was “well beyond” the recovery stage in November 2003 only to be ousted five months later in the early phases of the takeover d??e.Despite like-for-like sales growth of 6.8 per cent in the 13 weeks to 1 April – twice as fast as analysts had expected – Mr Rose ducked out of using the “R word”, insisting: “We’ve been careful to say there is no recovery yet. Shares in the retailer shot 22p higher to 586p, reaching levels not seen since 1998 when the group was at the height of its hubris and ruled the high street with profits of more than £1bn. Even after this rise they trades at just 6.5 times 2008 forecast earnings That is too cheap.. Marks & Spencer delighted the City yesterday with its strongest trading figures for years but Stuart Rose, its chief executive, still stopped short of declaring the group had turned the corner. There were also hints from him that acquisitions could be on the cards over the coming months.In the wake of the figures, analysts were forced to sharply upgrade their earnings forecasts while directors are believed to have piled into the market to top up their personal shareholdings.The broker Teather & Greenwood raised its estimate for the current year earnings by 110 per cent Walker Greenbank shares finished 5.75p higher at 24p.

Ian Kirkham, the chairman, boasted that his company is gaining market share at a considerable pace and trading ahead of City expectations. Its Harlequin and Sanderson brands are doing particularly well. They achieved revenue growth in excess of 10 per cent.The group enjoyed a strong final quarter and the buoyant trading continued into its new financial year. Over the past year the group has reduced its deficit from £11.2m to £7.9m.All Walker divisions are now operating at a profit. The designer and maker of wallcoverings and premium textiles registered full-year pre-tax profits of £2.6m compared with a loss of £800,000 in 2005.The turnaround in the company’s fortunes has been triggered by an extensive restructuring Walker started in 2004.This saw management get out of loss-making low-margin businesses and focus on upmarket brands which enjoy good profit margins.Yesterday’s results also brought good news on the pensions front.

This is a bit steep given it is expected to make only a profit of £1m this year, rising to £1.5m in 2007.The stock is best avoided until Bioquell starts getting major orders for its technology.Walker GreenbankOur view: BuyShare price: 24p (+5.75p)Walker Greenbank broke into the black yesterday for the first time in six years. In those days, the company seemed to be going nowhere with its shares trading at about20p. On taking the reins he restructured and refinanced Bioquell.Yesterday, the group’s shares closed at 116p, valuing Bioquell at nearly £50m. Initial results suggest they work well against leg ulcers but are some way off being launched on the market.Clearly, Bioquell has travelled a long way since Nick Adams, the chief executive, took over in 1998. Yesterday’s annual results saw the group drop into the red with a £500,000 loss. It promised to do better this year and talked of rising sales.