Marks and Spencer have decided to cut their dividend payments by over 30% to shareholders after they reported a fall in annual profits from £1.1 billion to £706 million. When a company makes a profit, it can choose to either reinvest the money into the business (retained earnings) or it can pay shareholders dividends. The dividend the shareholder received would depend on the size of their shareholding in the company.
This is the first time in 9 years that Marks and Spencers have cut the dividend. By not paying out as much in dividends this year, Marks and Spencers are running the risk angering their existing shareholders who expect a decent dividend payout.
Listen to the interview with Stuart Rose, M&S Chariman by clicking below:
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