Another 110 Marks & Spencer stores could close after a 10% drop in annual profits.

The high street chain said it will be closing 85 full-line stores and around 25 Simply Food outlets.

This is on top of the 35 full-line branches closed in 2018-19.

But company said it is not necessarily be reducing the size of the chain. Instead, it said it will be shutting and relocating smaller, less busy outlets as it focuses on larger Simply Food shops with parking access.

In the past financial year, M&S has launched 48 full-service stores.

Profits down 9.9%

The continued closures of M&S stores comes after pre-tax profits of £523.3million for the year until March 30 fell 9.9% from £580.9million the previous year.

Shares fell 5% as the results confirmed a cut to its shareholder dividend payout - down 25.7% to 13.9p a share.

Sales of its womenswear dropped 1.6% with a 1.3% fall in the final three months after it was hit by the timing of Easter and poor stock availability.

Like-for-like sales in its food halls fell 2.3% following a 1.5% decline in the fourth quarter, although this was also affected by the timing of Easter.

'Green shoots' of a turnaround

Chief executive Steve Rowe said: "Our strategy is as much about right sizing, relocating and new openings as it is about closures.

"Our overall numbers of stores will remain broadly level."

Mr Rowe added there were "green shoots" of a turnaround, but the group warned it remained in the "difficult early stages" of its turnaround and progress will largely not come until the second half of 2019-20.

Mr Rowe said: "Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business.

"M&S is changing faster than at any time in my career - substantial changes across the business to our processes, ranges and operations - and this has constrained this year's performance, particularly in clothing and home.

"However, we remain on track with our transformation and are now well on the road to making M&S special again."

Borehamwood Times:

(M&S chief executive Steve Rowe said there were ‘green shoots’ of a turnaround. Photo: Marks & Spencer/PA)

M&S also released details of a £601.3 million rights issue to finance its joint venture with online grocer Ocado.

The investor cash call will help fund the deal with Ocado to boost its food offering and online delivery service.

Arlene Ewing, investment manager at Brewin Dolphin, said: "These results underline that M&S is going through a significant overhaul.

"The major news is the £601.3 million rights issue for the Ocado joint venture and the cut to the dividend - both moves will likely mean short-term pain for shareholders.

"Of course, the hope is that a much stronger business will emerge on the other side - but we will only know whether it has worked years down the line."