Clothing and home retailer in the U.K. And last year had GBP 3.9 billion of sales and generated GBP 403 million of operating profit, and about a 10% market share. We're also a leading food retailer under the M&S brand, with GBP 8 billion of sales and GBP 395 million of operating profit last year, trading through actually almost 600 stores, both owned and franchised. And finally, we also trade the M&S brand internationally with about GBP 1 billion of sales, operating in multiple markets, usually with franchise partners. And last year, that business generated GBP 76 million of operating profit. The company also has a 50% investment in the Ocado Retail joint venture, which is the U.K.'s leading pure-play online grocery retailer.
Now, that business last year generated GBP 2.5 billion in sales, and an EBITDA, sorry, a profit before tax loss, primarily because it is still building and using capacity that was, you know, invested in during the recent pandemic. But that gives you a very quick snapshot of who we are and our operations. Now, our vision for M&S, we always say, is that we want to be the most trusted retailer, doing the right thing for our customers, where quality products are at the heart of everything we do, and what really differentiates us is we are an own brand, own label retailer. 99% of what we sell is the M&S own label, and our Chief Executive always says, "You know, we are a branded retailer, not a retailer of brands," and that makes us very distinctive.
It does mean today we are actually seen in YouGov surveys as the U.K.'s most trusted brand, and of course, there's a lot we can do with that when we consider expansion for the future. Now, moving on from our vision, I just want to spend a moment on our strategic priorities. M&S is a transformation story. It's a business that's been in turnaround for a number of years, and we like to set this out very, very clearly for investors. Our objective is to deliver profitable sales growth, through an exceptional product and being a trusted retailer brand, as I mentioned before. We want customer-centric businesses, and recently focused on growth through online channel, both our clothing business, which is one-third online, and our food business, which we're growing through Ocado Retail.
And we want to leverage that brand, expand our global reach over time with our franchise partners in key markets. Now, in addition to delivering profitable sales growth, our objective is to improve our operating margins, and we have a long-term, structurally lower cost base program aimed at permanently removing legacy activity from our business. And that's supported by a big cultural change program that I'll mention later. To deliver these goals, clearly, we need to invest. And of course, like all retailers, there are three important parts of our program: accelerating the rotation of our store estate from legacy locations into growth channels, modernizing our end-to-end supply chain, that means that we can flow stock rather than store it in our network and deliver it to customers quickly, and also supporting all of that change through a data, digital, and technology infrastructure that really drives excellent customer service.
Now, none of that works unless we do it in a disciplined way from the point of view of capital allocation. And M&S has a long track record of, in the past, having made some missteps on this front. We have very, very clear hurdle rates today for the capital that we commit. We measure ourselves against them, and we report them regularly to the market, so that we can deliver free cash flow growth, strengthen the balance sheet, and over time, return cash to shareholders. So they're really our nine strategic priorities that form the foundations of delivering our key financial ambitions, which are on the next slide. So what do we want to deliver? Over the five years from FY 2023 to FY 2028, we aim to grow our market share by 1% in food and 1% in clothing.
Now, our market share in food starts at 3.6%, so clearly that is a very, you know, strong growth target for the business. Our clothing and home market share starting point is 10%, so we see less relative growth opportunity in clothing, but still substantial category opportunities, to exploit and channel opportunities through online to exploit over time. In terms of margin, we set out these target operating margins a couple of years ago. We believe that being a competitive retailer in our space means, a food operating margin of over 4% and a clothing and home operating margin of over 10%. Last year, we delivered margins at a 4.3%-4.8% in food and 10.3% in clothing. And we support delivery of those plans by a long-term structural cost reduction program.
Originally, two years ago, when we set this out, that was GBP 400 million. Today, it's GBP 500 million, and in the first year, from FY 2023 to FY 2024, we delivered GBP 180 million of cost out. This year, our objective is about GBP 120 million of incremental cost out for the business. Of course, as I said before, all of this comes with very clear hurdle rates, which we seek to invest our capital at, but also measure ourselves against and share with you over time. In our year-end results detail, we did show that in all of our key areas, we're delivering paybacks ahead of plan. So if I just move on to the next slide. This shows you a few of the financial highlights for FY 2024 that we reported last year.
So group sales up 9%, that was led by growth in food. Profit before tax and adjusting items up 58%, as we saw a step change in our operating margins in both businesses. And earnings per share growth of 46%, that was primarily due to a slightly higher tax rate in the year, the U.K. corporate tax rate going up. But clearly, we converted strong sales growth to very rapid earnings growth in the past year. And all of that translated to a substantial improvement in both free cash flow from operations and net cash position, excluding leases capitalized on the balance sheet, and also a step change in the group's return on capital employed, which we aim to invest ahead of, going forward.
Now, over the next couple of slides, we do have a little bit of additional detail, and I wouldn't propose to go through that today, but we will, you know, we will share these slides in that extra detail for anybody watching. As you can see, as I mentioned before, we saw some very rapid profit growth, leveraging the sales growth improvement last year. Now, looking at how we converted that to cash, EBITDA last year of GBP 1.4 billion, CapEx and disposals of GBP 420 million, and after GBP 222 million of financial interest in tax, free cash flow from operations of GBP 414 million, enabling further deleveraging of the balance sheet, improved return on capital employed, and the restoration of a dividend to shareholders.
Now, I did mention at the beginning, a very important part of our program to transform M&S is cultural change, and when you talk to us, what you will find over time is we don't sugarcoat anything. We have made some progress at the initial stages of our transformation program, but our Chief Executive always says we remain positively dissatisfied. We've done a lot, but there's still lots to do and lots of opportunity for the business. We also are a relatively old business. We've been around a hundred and forty years, and one of the issues with legacy businesses is you tend to start to believe your own narrative about what's driving the company, so when you speak to us, you will find that we aim to be very, very direct in our communications. We tell it as it is.
If we say we're gonna do something, we do it. And if you look at our Capital Markets Day presentation last year, you will see that we rated ourselves on performance, either red or green, against all of our key, strategic priorities. As a business, the danger is that we end up with a corporate hierarchy at the center, far removed from our colleagues, frontline colleagues and our customers. So we have a program to get closer to our customers and closer to our frontline colleagues. What that means is that all support center colleagues work seven days a year in store on the frontline, and their role is to bring back problems from the stores and solve them so we can better serve our customers. And we have a number of other key behaviors that we expect of our colleagues going forward.
A very important part of delivering the M&S transformation, the initial progress that we've made to date, has been cultural change. You know, part of the problem in the past wasn't a lack of strategy, but it was a lack of execution. Under this team, we have a very, very clear narrative and very, very clear expectations of people and the part that they deliver in the transformation program. Now, before we move to questions, on the next slide, providing it moves forward, I just want to address the outlook. Now, over the last couple of years, clearly, everybody in the retail sector has been through a lot of change.
If we go back a year ago, two years ago, there were relatively high levels of inflation in selling prices for all retailers, although indeed, we were inflating behind the market, and that is now coming, thankfully coming down. And so to grow our sales and to grow our market share, for us, is about growing our volumes. And we've been very, very clear with investors that our top line growth expectations this year are about driving volume, with average selling prices typically only growing between 1% and 2% across our retail businesses. At the same time, the trading environment requires us to deal with high levels of operating cost inflation, investment in colleague pay because of increases in minimum wage here in the U.K., have meant a step change in colleague rewards.
What that means is we have to have a continual focus on cost out programs to offset that inflation. I mentioned earlier, GBP 120 million of structural cost reduction in our plan this year. That enables us to broadly offset inflation in colleague pay, which means that if we drive our volume, we can improve our profitability and our profit before tax, and drive the bottom line. Other inflation is also largely offset by reduced energy costs. As a result of volume growth or as a result of market share improvement, what we said at our full-year results in May is we do expect to make further progress, you know, in a profit in 2024, 2025, and beyond.
And if you look at current consensus for M&S, expectations are for around GBP 770 million of pre-tax profit in the current year, compared with the GBP 716 million that the group reported for FY 2023/24. So just on that note, I'll finish with a quick look at our strategic priorities for this year. There's a lot on this slide, so I won't spend too long on it. As you would expect, the business is continually focused on investing in value and upgrading quality. And driving its clothing business through improving style, and driving its online sales participation, reducing its costs so that actually volume growth can drop through to the bottom line.
We've got some key targets for new store upgrades, for new stores, and for renewals in the current year, and to increase capacity in our online network to support longer term growth, and we expect to continue to generate free cash flow, further strengthen the balance sheet, so that we can drive sustainable growth in returns for shareholders over time, so on that note, I think I'm about at time. I will hand over to questions.
Fantastic, so we have the opportunity. If you have any questions for us, then now is the time to submit that through the chat option. There's a few coming through now, so we're just going to take a quick read of those, so should we go for this one to begin with? In terms of how does M&S optimize cash flow from operations, and what measures are in place to ensure sufficient liquidity during times of uncertainty?
That's a really good question. M&S has a very good track record of strong operational cash flow generation in the past. One of the issues we've struggled with in our previous world and before this transformation is being disciplined about allocating capital. But we do have a substantial amount of liquidity available to the group. So as of the end of last year, we had about GBP 1.1 billion in available cash on the balance sheet. Now, we have deployed over the past six months about GBP 180 million of that cash, buying back some of our medium-term notes, because that was an effective use of our cash. But at the same time, we also have a GBP 900 million unused revolving credit facility.
So the business does have around or just under GBP 2 billion of available cash, you know, through its RCF and on-balance sheet cash flow available to it at any one time. And at the same time, if you look at our metrics, we do generate strong levels of operational cash flow, on top of that. So that stood us in very good stead in the past, for example, during the COVID pandemic. Even at the bottom of the cycle of lockdown one, for example, the business barely dipped into its RCF because of the strong levels of cash flow in the business. So I think hopefully that answers part of that question. Now, moving on to inventory methods used and how we manage inventory obsolescence and markdowns. It's a very good question.
So, first of all, how we manage markdowns has changed quite a lot over the past few years. If you look at our clothing business, today, about 80%-81% of our clothing sales at the end of last year were at full price, and that compares with about 66% five years ago. So we've seen a very strong increase in our full price sales mix. Behind that has been a whole, you know, improvement in the discipline around inventory management, ordering, cancellation, and flow, so that the business does not end up clogged with stock. So if you look at our position five years ago, we had about 20 weeks of stock holding, a really slow-moving supply chain, a lot of stock on the water. Today, we're down to about 12 weeks of stock holding.
I think actually it was eleven at the end of last year, which obviously gives us a lot more flexibility in terms of stock into sale, in terms of in-season trading, in terms of using our open to buy, to chase down style and trend. And we think that has been a very important part of the change in perceptions for M&S, not just around value, because we trade full first price, right price now, you can trust the price you're seeing, but also on style, because we're able to introduce more short lead time product into the range than we were before. And we do have, of course, at the end of each year, an obsolete stock provision that the company constantly updates and takes, you know, a sense of with our auditors.
Moving on, could we speak to our geographical footprint and where we see growth? It's a really good question. So today, M&S today is still a business that has about 92% of its sales in the UK. However, we are the UK's most trusted brand, and we do have some really strong partnerships overseas with the likes of Al-Futtaim in the Middle East, with the likes of Fibabanca in Turkey, and also with Reliance Retail in India, with, you know, who are really very powerful partners who could help us drive growth in the medium term and know their markets incredibly well. Now, at the moment, we operate with most of those partners on a franchise basis. That's to say, say we wholesale stock on relatively long lead times to those partners.
We don't take much risk, and we do earn a reasonable margin. But actually, going forward, we see a big opportunity for growth, for getting that stock to them on a much shorter lead time basis, and also taking more interest in the sales performance of their markets and regions. So we do expect to be expanding in the medium term, and we've just put new leadership in charge of our international business, a guy called Mark Lemming, who used to run our Clothing and Home supply chain. Because what we know is actually being successful internationally. A big part of that is going to be about the logistics of how we handle our inventory on a global basis. So another question here on energy costs. How are we reducing our energy costs?
Now, it's a really good point because actually, particularly in our foods business, we have a high level of chilled product within our range. Typically, fresh and chilled constitutes around two-thirds of the offer, within our food stores. M&S is famous for its fresh products, it's famous for its quality, but of course, there's a certain amount of energy costs, associated with that. So it's a very big challenge for us, and what we're doing as we drive the rotation of our store estate, is we're building energy efficient, measures into all of those stores, whether it's LED lighting, whether it's ensuring that we have fridge doors on all of our fridges around the store. It really does make a difference for, how cold it is in those stores and, you know, how we manage the heating and lighting.
but also, we're also retrofitting fridge doors and LED across the rest of the estate as circumstances allow, and we've got a four- or five-year program to do that.
Already made great progress in our financial targets. Regarding market share gains and operating margins, what's the next step from here?
That's a really good question, and we understandably receive that one a lot because the business last year achieved its target operating margins, in fact, was ahead of its target operating margins, in a sense, so what our management team said at the full year on our conference call is that growing our margins is not the main target. Our main target is to drive volume and market share, but if by driving volume and market share, we drive operating leverage through the PNL, then we're perfectly happy for our margins to move ahead, so I hope that's clear. What we mean by that is, in an environment where we have very limited average selling price inflation, driving volume is critical if we're going to be a growth company.
So our focus on a, as a business, is on constantly ensuring that we've got the cost savings to mitigate operating cost inflation, like pay. That we've got the volume related supply deals to get a pipeline of cost of goods savings to invest in value and invest in quality. And if we can do that, we then drive volume growth, which means that actually we could still deliver operating margin, operating leverage to the bottom line and move our margins forward. But in itself, it's not the main goal. It would be very easy and straightforward for us to say, actually, now we want to have a higher margin, but the risk of that would, you know, sort of choke off the market share opportunity that we have.
Just to remind you, we're less than 4% of the U.K. grocery market. We are a minnow compared with, you know, a Tesco that's 25%, yet we are the U.K.'s favorite food brand. What that means today is we're most people's second shop, but our objective is to become more of a first shop and certainly more of a top-up shop for our customers over time, and that gives us a huge growth opportunity, you know. New stores are typically 50% larger than the average store that we trade today.
Can we talk about our debt structure, including short and long-term debt?
So, I mean, we're relatively fortunate in, as I mentioned earlier, we have very limited, in fact, we have a net cash position today. If we take our overall debt less cash, we have about GBP 1 billion of cash at the year-end. But we did have medium-term notes to the tune of about GBP 1.2 billion at the back end of last year. And what you'll see we're doing is slowly paying off our shorter-term obligations over time. Just because I won't remember all the numbers, the actual full detail of MTN expiries is on our corporate website under the fixed income section, by principal and by maturity.
How do we integrate sustainability metrics into our reporting, and what frameworks do we follow?
So like most listed U.K. businesses, we are subject to, you know, frameworks around sustainability reporting, and you know we do report on those every year, and you can see them in our annual report and accounts. The business has an objective of reaching Net Zero across scope one, two and three emissions by 2040, which is relatively early, and has set out some markers along the way to achieve that, both across scope one and across scope two, and we're going to deliver those over time. Now, we've also set out some quite specific targets around removing plastic packaging, making sure that we use sustainably sourced fabrics, and also other products within our food supply chain, which we report against very frequently.
Just been given the five-minute warning.
Oh, right.
We've gone through the questions that come through. So if there's anyone on the call that has any further questions, then now is the opportunity to submit that. What strategies do you employ to manage and control operating expenses in the context of inflation and supply chain disruptions?
Oh, thanks, thanks for the question, actually. That's a really good one for us. So, you know, our Chief Executive, Stuart Machin, set out a GBP 400 million structural cost reduction program, two years ago, which we increased at the end of last year to GBP 500 million. Now, when M&S talks about structural cost reduction, it's talking about SG&A. So we do have cost of goods sold programs in both supply chains. We call them our strategic sourcing programs, to consolidate the volume, to cut a better deal, to make sure that our supply base is sustainable, and we do invest those savings in better value and better quality for our customers. But at the heart of our approach to structural cost reduction is our operating cost base, which is primarily here in the U.K.
And it's got three different parts to it, of course. Our retail costs, so that's our store base. You know, there's about GBP 1 billion of operating costs in our store base, a lot of that related to colleague pay. Our supply chain in both businesses, food and clothing and home, we have networks to supply both of those businesses. Obviously, you have a chilled supply base in food, and then we're moving non-food products in a slightly different way for clothing and home. And then, of course, at our store support center, we have over 3,000 colleagues here in the U.K. Now, the structural cost reduction program is about permanently removing cost base. So that's the reason we use the word structural. What do we mean by that?
We mean if you take some of our stores, for example, introducing self-checkouts, where we're investing in technology, which means that we can permanently redeploy colleagues to service on the front line and across the aisles. That means we've got far less colleague resource on tilling and far more focus on filling and serving our customers than we did in the past, and we measure very carefully the amount of cost that is removed from that program. At the same time, in the store support center, where, you know, growing digital, growing our online presence is super important. In the past few years, we've reallocated teams from, you know, working with our stores to working with our online business, probably fair to say.
And then finally, in our logistics network, as an example, we've been automating our clothing logistics network, and also changing the routing of product through our network, so that we're not sending two parcels to customers, but instead sending one, and there's a lot of, obviously, algorithmic work behind there. Now, what that has meant for the past couple of years is largely we've been able to offset inflation, whether that's inflation in colleague pay, inflation in energy, and so forth. And that means the benefits of volume growth from reinvesting in value, reinvesting in quality, flow to the bottom line in terms of incremental margin. And that will continue to be our focus in terms of trying to create a virtuous circle over time.
Fantastic. They were all the questions that we had. I've been giving a one-minute warning. You should have access to Fraser and myself, email addresses, if you've got any follow-up questions. We're more than happy to answer those, but it's been great to have the opportunity to speak to you guys, and we'll call it the day there.
Thank you very much. Thanks for joining us, and yeah, as Helen says, any questions, do shoot them our way. Thanks for joining today.