Shares in Marks & Spencer were down on the FTSE 100 in morning trading after the supermarket chain reported a rise in revenue and pre-tax profit in the full year ended 2 April.
Revenue in the period rose from £9.5 billion to £9.7 billion, while underlying pre-tax profit increased from £694.6 million to £714.3 million.
Internationally group sales remained at one billion pounds, while in the United Kingdom revenue grew from £9.5 billion to £9.7 billion. Marks & Spencer opened 49 new stores internationally during the year and announced that it would be returning to France later this year.
Net debt in the period dropped from £2.1 billion to £1.9 billion.
The group added that it would be raising its final dividend 13.7 per cent to 10.8 pence per share, making for a total dividend of 17.0 pence per share, up 13.3 per cent from the previous year.
Looking ahead Marks & Spencer said it expected the coming year to be "challenging" thanks to increasing pressure on consumer disposable income and high commodity, making for a "cautious outlook".
Marc Bolland, Chief Executive of Marks & Spencer, said, "Marks & Spencer had a good year with sales and profits ahead of last year. We traded well in a challenging environment, growing our market share in both Clothing and Food.
"In November we set out our plan to grow M&S into a truly international, multi-channel retailer. We have made good early progress and are focused on both trading the business in the short term and on delivering against our long term targets."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "The results mark a confident start by the new chief executive. Profits have materialised at the high end of analysts' forecasts, with market share gains being made for both food and clothing.
"On the downside, management has understandably injected a degree of caution over the outlook, while commodity prices such as cotton continue to cast a shadow over costs. In all, with the shares having outperformed both the General Retailing sector (+1.9pc) and the wider FTSE-100 index (+3.4pc) over the last six months, investors may today be banking some profit, with the re-rating, at least for now, seen as having run its course. Market consensus opinion currently denotes a strong hold."
By 08:25 shares in Marks & Spencer were down 1.34 per cent on the FTSE 100 to 391.70 pence per share.