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Marks and Spencer has reported a rise in underlying profits but its new boss has warned that improving its clothing and home range will hit profits in the short term.

For the year to 2 April, underlying profits rose 4.3% to £689m. Steve Rowe, who took over as chief executive last month, says he intends to make a number of changes to the clothing range in particular.

He promised to lower clothing prices and improve style, fit and quality. In addition, there are plans to reduce the number of sales promotions in the stores.

Mr Rowe, who took over from Marc Bolland, is the latest in a line of bosses at Marks and Spencer spending their first weeks and months pledging and making changes.

Mr Rowe, who unlike Mr Bolland has spent most of his life working at the company, has already announced he will halve the size of the top management team in an attempt to bring the company closer to its customers.

M&S said that group revenue rose 2.4% over the year to £10.6bn. Statutory pre-tax profits fell 18.5% at £488.8m after taking into account one-off costs of £200.8m.

These costs included about £50m to cover PPI mis-selling at M&S Bank, as well as costs resulting from store closures both in the UK and abroad.

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