Mixed results for discount retailer B&M

Home discount retailer B&M has reported strong half year growth but didn’t experience a sales surge similar to last year’s lockdown boom.

The group’s statutory pre-tax profit rose 2.4% to £241.4m on revenues of £2.2bn, which is up 1.2% for the 26 weeks to 25 September 2021, while cash generated from operations has halved from £403.2m to £201.7m.

During the period the group said its UK business performed strongly driven by a change in the sales mix towards general merchandise and high sell-through across spring/summer seasonal ranges leading to limited markdown activity.

However, B&M’s value convenience store chain Heron Foods, experienced more challenging trading conditions as average transaction values for grocery shopping normalise to pre-pandemic levels.

Heron generated revenues of £203.1m, down from £216.2m for the same period last year.

In France, revenues increased by 10.6% to £155.4m, up from £140.6m and represented a strong performance given there were six weeks of ‘soft lockdown’ restrictions in force at the start of the financial year.

During the 26-week period, the group opened 14 new B&M UK stores and closed nine, of which 2 were relocations.

CEO Simon Arora said: “The Group has performed strongly throughout the first half of our financial year, with customers continuing to be drawn to our value for money offer.

“We have responded decisively to supply chain challenges by leveraging our strong supplier relationships and we have improved in-store execution.

“As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges. To colleagues across the Group, I express my gratitude for their dedication, skill and commitment, which have made these results possible.

“Although the pathway to a ‘new normal’ remains uncertain and the industry faces a number of supply and inflationary pressures as we enter the second half of the financial year, we are very confident that the B&M Group is well positioned to navigate these and will continue to be successful both in the UK and in France.”

B&M declared half year dividend increased by 16.3% to 5p per share to be paid on 17 December 2021.

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