Hang out the bunting! Pop the champagne corks! Marks & Spencer is about to report its first increase in annual profits in four years.

Chief executive Marc Bolland, who has just entered his sixth year in the hot seat at the struggling High Street retailer, will finally have some good news for the City today when he is expected to unveil underlying annual profits of around £650 million.

That’s a modest increase of 4 per cent on the previous year and certainly not a growth rate that would normally set investors alight. But at least profits are, at last, moving in the right direction.

City analysts expect positive news, too, on margin improvements at the group and there has also been chatter about plans to sweeten shareholders with a special dividend or share buyback of up to £250 million.

So, is Bolland’s costly and much-delayed recovery plan finally starting to reap rewards?

The short answer, even after his five-year fight to restore the 131-year-old group’s fortunes, is that it’s still too early to tell.

If profits emerge at the forecast level of £650 million or so, they will still lag well behind those of younger fashion rival Next, which earlier this year reported a 12.5 per cent leap in annual profits to £782 million. Next’s profits were achieved on far lower sales than M&S, at £4 billion against more than £10 billion for its older rival.

Today’s results from M&S will still be left in the shade by its earnings almost two decades ago, when it became the first British retailer to take profits through the £1 billion barrier. That was followed by years of boardroom bust-ups and ill-advised overseas expansion, although profits briefly breached the £1 billion level again in 2007-8.

Bolland, who was recruited in 2010 from the supermarkets group Morrison's to replace Sir Stuart Rose, has pushed through a number of much- needed changes at the retailer, including revamping the stores and improving its fashion ranges. A key factor in the improved performance though is a substantial saving the group has made on sourcing its clothing, which has in turn boosted margins.

Supply chain Behind the improved sourcing are Mark and Neal Lindsey, Hong Kong-based buying gurus who have transformed M&S's lumbering supply chain.

The publicity-shy brothers formerly worked for Next and have been credited with creating its super-efficient buying operation. Appointed joint sourcing directors by Bolland a year ago, they are now working their magic at M&S.

Bolland can take the credit for recruiting the Lindsey brothers, of course, but the jury is still out on how much of an impact he himself has had over the past five years.

The City has been unusually patient with the slow pace of M&S’s recovery, the missed targets and the 14 consecutive quarters of falling clothing sales over which Bolland has presided. That may in part be due to the buoyant share price, which has soared by 50 per cent to 584p since autumn last year, its highest level since late 2007.

However, the City will want further evidence that the recovery can be sustained. It will take more than a 4 per cent increase in profits before Bolland can declare his work at M&S is done.

A new row could be brewing over whose face should grace the new £20 note after Bank of England governor Mark Carney asked the public to nominate their suggestions.

Candidates must come from the field of “visual arts”, which includes artists, sculptors, architects, photographers and filmmakers. Carney urged the public to think “beyond the obvious and most famous” historical figures. Fictional characters or candidates who are still alive are not allowed.

Best-known artists No sooner had Carney launched the exercise than the bookies started setting odds on some of Britain's best-known artists, including William Hogarth, William Blake, George Stubbs and JMW Turner.

Where are the female candidates though? The Bank ran into an equality row two years ago when it announced it was phasing out the £5 note that pictured the prison reformer Elizabeth Fry.

She was the only woman to have featured on a British banknote – other than Queen Elizabeth – since historical figures were first portrayed in 1970. The row ended with author Jane Austen chosen as the face for the new £10 note.

After considering the public nominations, the governor will have the final say. If he wants to avoid another equality row, he might like to consider the sculptor Barbara Hepworth, the author and illustrator Beatrix Potter or the designer Jean Muir. Fiona Walsh is business editor of theguardian.com