Marks & Spencer has highlighted the difficulties it has encountered during the current economic slowdown by reporting a profit drop of nearly 40 per cent in its yearly results, down to £604.4m (€682.8m) from £1bn (€1.13bn) in 2007/08.

Like-for-like sales in the group's core UK market fell 5.9 per cent for the 52-week period ended 28 March 2009, with overall UK sales dropping 1.7 per cent.

Better news was that total sales increased 0.4 per cent to £9.1bn (€10.3bn), driven by international growth of 25.9 per cent, while net debt was reduced from £3.1bn (€3.5bn) to £2.5bn (€2.8bn).

Group chairman Sir Stuart Rose said that the group had put in place strategies to cater for the changing economic environment, and that these would have a long-term benefit to the company.

'During the year we acted decisively to meet the challenges of the economic downturn, responding quickly to the changing need of our customers, managing costs tightly and protecting our balance sheet,' he said. 'We sharpened our values without compromising on quality. We believe this, together with our investment programme, is creating stronger foundations for long-term growth.'

And Mr Rose remained wary of what the next fiscal year would bring amid a cloudy economic climate.

'Trading for the first seven weeks of the year has been broadly in line with trends experienced in the fourth quarter,' he added. 'We remain cautious about the outlook for the remainder of the year.'

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