UK retailer Marks and Spencer today (22 May) hailed the "strong" performance of its food business, which posted higher sales and margins in a year when company-wide profits fell.

The company reported a 0.2% fall in underlying pre-tax profit to GBP705.9m (US$1.11bn) for the 12 months to the end of March. On a reported basis, pre-tax profits were down 15.7% at GBP658m.

Sales were up 2% at GBP9.9bn. Revenue from its UK stores increased 1.5% to GBP8.9bn. However, it was M&S's food business that boosted its UK turnover. Food sales increased 3.9% on the back of a 2.1% rise in like-for-like sales. Sales from the retailer's general merchandise arm fell.

The company said its food retail arm had "performed strongly in a tough market" in the year to the end of March. Sales were up 3.9% to GBP4.7bn on the back of a 2.1% increase in like-for-like sales.

M&S cited a "focus on freshness, speciality and convenience" and said it "continued to lead the way with high-quality, first-to-market food products".

Gross margins from the retailer's food business increased by 50 basis points to 31.4% thanks to "better management of promotions and waste" and the early introduction of new systems. Both factors helped offset increased commodity prices, M&S said. Its UK business as a whole saw gross margins fall 30 basis points.

Looking ahead, M&S said it would "develop space selectively, particularly [our] Simply Food stores, which have been a very successful format".

However, it said it expected to spend GBP200m less on its UK retail estate in the next two years. The retailer said its space would increase by 3% in the coming year and 2.5% in the next 12 months.

Nevertheless, M&S said it planned to open 100 overseas stores a year. International sales increased by 5.8% in the retailer's last financial year.

Shares in M&S were up 1.04% at 341.7p at 09:26 BST.

Click here for the full statement and check back later for coverage of the retailer's press conference in the City.