Marks & Spencer is poised to unveil its first increase in full-year profit under the stewardship of chief executive Marc Bolland, paving the way for the retailer to hand a cash bonus to shareholders.

M&S said last year that it would update investors on its balance sheet with its full-year results next Wednesday.

The announcement is likely to include guidance on a potential cash return, according to people close to the situation. The company already pays a regular dividend.

Analysts said M&S could deliver an extra £200 million to investors. However, they said it was possible that it may not specify how much it could pay out, and whether this would be via a share buyback or special dividend.

Fraser Ramsan, an analyst at Nomura, said M&S had scope to return £250 million.

Richard Chamberlain, an analyst at RBC Capital Markets, said: “The full-year results would be the obvious time for M&S to give an update on cash returns. Now that the trading outlook has improved, capital expenditure has stabilised and the pension deficit is lower, we expect it to indicate it will return excess cash to shareholders over time.”

Another analyst said: “If there is not an actual repatriation [of capital], I think there will be a firm indication.”

The potential cash return is expected to be underpinned by an improvement in profitability in M&S’s clothing after the retailer brought in Mark and Neal Lindsey, the architects of rival Next’s supply chain.

M&S has said it expects the gross margin – the difference between the price at which it buys and sells goods – for clothing and homewares to rise by 1.5 to 2 percentage points in the year to March 2015.

M&S declined to comment. It last announced a £1 billion buyback in November 2007, the financial year in which its profits hit £1 billion, under Mr Bolland's predecessor, Sir Stuart Rose. – (Copyright The Financial Times Limited 2015)