Marks & Spencer to halt store openings M&S is spending hundreds of millions of pound on modernising its infrastructure so it can compete online with rivals such as Next and John Lewis. This includes the opening of a new distribution warehouse in Castle Donington in the Midlands and the launch of a new website next year. However, Mr Bolland now intends to cut annual capital expenditure from £775m this year to £550m per year. "We have done the heavy-lifting investment, the big chunk has been done," Mr Bolland said. This cut in capital expenditure and slowdown in space growth was welcomed by the City. M&S said the reduction will cause a "material improvement in free cash flow," which could prompt an increase in the dividend or a share buy-back. This sent shares in M&S up 27.40, or 6pc, to 467.90p. This was despite the retailer reporting its lowest statutory pre-tax profits for eight years. The company said pre-tax profits in the year to March 30 were £564m, compared to £658m a year ago and M&S's record pre-tax profits of more than £1bn. The decline was caused by a 4.1pc fall in like-for-like general merchandise sales, which dragged down total like-for-like sales in the UK by 1pc. On an underlying basis, which stripped out one-off items such as the £75m cost of buying back bonds, pre-tax profits fell slightly from £687m to £665m. M&S will pay a final dividend of 10.8p per share on July 12. Mr Bolland said that it had been a "challenging market" for M&S but that the company is making "strong progress" in food, its international business, and its growing multichannel operations. We have already made progress in our operational execution, and our new autumn/winter ranges have received a positive reaction. Mr Bolland said the company's food business is benefiting from a focus on "delivering innovation, and unrivalled quality and provenance." However, the M&S boss, who has been in charge for three years, said the retailer has no plans to follow Wm Morrison and launch an online food business. This is because the average spend by customers on M&S food is too low to make an online operation profitable and the company wants to encourage shoppers to visit its stores to discover new products. On top of its results, M&S confirmed that Steve Sharp, the company's long-serving head of marketing and the man behind the "Your M&S" advertising campaign will retire next February.