Marks & Spencer shares have hit an eight-year high, as the group reported its first profit rise in four years and pledged to return excess cash to shareholders.
The UK's biggest clothing retailer posted an underlying pre-tax profit of £661m for last year, up 6.1 per cent on 2013 and above analysts' typical expectations of £648m.
It has raised the dividend by 5.9 percent to 18p and announced a programme of enhanced shareholder returns with a £150m share buyback for 2015/16.
The group has 46 outlets in Scotland including over 20 Simply Food formats, and is planning a new store in the Buchanan Galleries expansion in Glasgow.
After a poor Christmas, the results ease the pressure on Marc Bolland, chief executive since 2010 and now tipped to be looking to go out on a relative high. But he said he had no plans to depart any time soon, telling reporters he "absolutely" expected to be presenting the annual results in 12 months' time.
"In the coming year there's a lot to do and I'm enjoying it," Mr Bolland said.
M&S said it expected to deliver better gross margins in its key clothing business over each of the next three years as it benefits from sourcing more goods directly from suppliers and from lower levels of discounting.
The group lost its crown as number one clothing retailer to Next last year and remains behind it, with core profit still only two-thirds of its £1billion peak seven years ago.
But M & S shares have risen by over a third over the past nine months and they hit an eight-year high yesterday, closing up 0.5p at 586p.
The positive sentiment reflects hopes that Mr Bolland's billions of investment on the redesign of products, stores, supply chain logistics and the website is paying off and addressing decades of under-investment in the 131-year-old business.
Mr Bolland said: "We clearly made a step in the right direction. You cannot think that you can trade a business hard when you don't have the infrastructure."
The Dutchman has focused on boosting profit margins, which delivered a rise in the 2014/15 gross margin for general merchandise - spanning clothing, footwear and homeware - of 1.9 percentage points. He is targeting growth of 1.5 to 2 points this year and further unquantified gains over the following two years.
Last month M&S said fourth-quarter sales of general merchandise rose 0.7 percent at stores open more than a year, the division's first positive performance in 15 quarters. It also claims its spring/summer 2015 fashion ranges are 'bang on trend', with a £199 suede skirt leading the way.
Gross margin on food rose 0.3 points, with another 0.1 point promised, and the group has raised the target for new Simply Food stores from 200 to 250 in the three years to March 2017. Underlying sales have outperformed the wider market with 22 consecutive quarterly rises.
M & S cautioned that its international business will be hit in the short term by the weaker euro and macroeconomic backdrop, particularly in its Middle East region, but flagged long-term opportunities across several markets, including France and India.
Clive Black, analyst at Shore Capital said: "With general merchandise now positive and...set to remain so for much, if not all, of 2015-16, more exciting times could be ahead for shareholders."
However another sector veteran Tony Shiret at BESI Research said: "It would be wrong in our view to over interpret these results as being 'all the problems are sorted'."
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