Pre-tax profits at Marks & Spencer (M&S) jumped to £522 million in its latest financial year, compared to £403 million before the pandemic.

In its latest financial results, the multinational retailer said that tight spending and a focus on working capital had sharply reduced net debt during the 12-month period.

It also revealed that it would be exiting the Russian market permanently, which will cost the business £31 million.

The company said improved profitability has left it in a strong position to face inflationary headwinds, with financial net debt under a third of pre-pandemic levels.

Trading across the first six weeks of 2022 was ahead of the same period last year, including the months when non-essential retail reopened.

The British retailer saw particularly strong growth in its clothing and home sales and reported that its food business continues to “outperform the overall market”.

However, the company will not receive business rates relief and without the profit contribution from Russia, it will start the financial year from a lower adjusted profit base.

It said that increasing cost pressures and consumer uncertainty means that it doesn’t expect an improvement on this lower profit prediction in the coming year.

“For me, what is important about these results is not just the restoration of profit and strong cash flow; it is that they demonstrate that M&S has fundamentally changed,” said Steve Rowe, who is ">stepping down as M&S chief executive after six years. “While there is much more to do, the business has moved beyond proving its relevance and has the opportunity for substantial future growth.”

M&S said that while it has changed its digital footprint, it plans to invest further in some of its core technology systems. This includes the planning and supply chain systems of its clothing and home category, which it says could be “significantly improved”.

It also says that some of its stores are out of data and poorly located so need to be converted to a new “more efficient shoppable format”.

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