Discount chain B&M on course for a record year

Discount store chain B&M says it is on course for a record year, in its latest trading update covering the third quarter, to December 29.

The group, based in Speke, South Liverpool, said group sales revenue growth in the quarter was 12.1% up at £1.087bn, although UK like-for-like revenues were down 1.6% against a strong prior year comparable of a 3.9% increase.

It said it achieved a pleasing finish to the quarter with December B&M UK like-for-like sales 1.2% up at £874.5m. and like-for-like cash gross margin showing a 3.2% increase, after a difficult November.

The positive sales momentum has also continued into January for the group, which plans to open 13 new stores in its final quarter, on top of the 20 new stores it opened in the third quarter.

The group is on track to open 56 gross new stores during the 2019 financial year.

B&M said careful control of inventory has meant that stocks for the January 2019 end of season sale period are below the levels of last year, which should provide further support to the margin over the fourth quarter.

The Heron Foods arm has continued to trade strongly with overall revenues growing by 12.6% to £89.9m in the quarter, which was a good performance given the business was annualising the product range extensions that were made last year following its acquisition.

There were nine net new stores opened in the quarter, taking the total to 278 stores, and the group is on track to open 20 net new stores in the full year.

Sales revenue at the German store chain Jawoll increased by 5.5% on a Euro basis in the quarter, which equates to an increase of 4.9% in Sterling to £55.3m in the quarter compared with the same period in the financial year 2017/18.

There were three new stores opened in the quarter and B&M is on track to open 10 gross new stores in the full financial year.

The Babou stores business which was acquired in October 2018 contributed £67.3m of revenues in the quarter, with clearance activities on existing merchandise commencing as the business transitions the product range ahead of new B&M-sourced product ranges arriving in stores from March 2019 onwards.

B&M said its January period has started well and it is well positioned for the remainder of the financial year.

“Our pipeline of new stores is healthy and we remain on track to deliver continued sales and earnings growth this financial year and the next.”

Chief executive Simon Arora added: “Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings, representing our 14th consecutive year of profit growth.

“The business’ ability to manage profitability through uncertain trading conditions is testament to the resilience of the business model and the strong operational controls we have in place.

“We continue to open new stores and win market share when other retailers are retrenching.”

He said: “I would like to thank all our colleagues across our UK, German and French businesses for their hard work and commitment over our busiest ever peak Christmas period.

“I am pleased by the December trading and the positive momentum with which we enter 2019. We look forward to the year ahead with confidence as our value proposition is clearly resonating with shoppers.”