Discount retailer sees half year profits more than double
Discount retailer B&M continued its meteoric rise with half year results that showed profits more than doubled in the six month period to September 26.
The group, based in Speke, South Liverpool, achieved a 25.3% increase in total revenues of £2.242bn, while pre-tax profits soared 122.4% to £235.6m.
Nine gross new B&M UK store openings were offset by eight closures in the first half, and the group is on track to open 40 to 45 gross new B&M UK stores this financial year, offset by 10 closures.
The Heron Foods brand has continued to trade well and opened seven gross new stores with one closure, and is on track to open 20 gross new stores, 16 net of closures, this financial year.
There was positive like-for-like sales growth at the French operation at Babou since re-opening on May 11, with total revenue of £140.6m and adjusted EBITDA of £2.7m in the first half, despite being closed due to lockdown for the first six weeks. Approximately half of the Babou stores remain open, but are restricted to selling essential goods only during the November lockdown in France.
Net cash flows from operating activities of £343.0m – against £138.2m last year – reflect EBITDA growth, lower capital expenditure and tight working capital discipline, the group said.
The ordinary half year dividend has been increased by 59.2% to 4.3p per share, and B&M has announced a special dividend of 25.0p per share to return surplus cash to shareholders.
The group said: “In the current uncertain macroeconomic outlook we are taking a prudent approach to our capital structure and returns, remaining comfortably within our stated leverage ceiling of 2.25x net debt to adjusted EBITDA (pre-IFRS16).
“We continue to evaluate our leverage and surplus cash position in line with our capital allocation framework.”
Chief executive, Simon Arora, said: “The group delivered a strong performance in the first half, with our business model proving well-attuned to the evolving needs of customers.
“Our combination of everyday value across a broad range of product categories and convenient out-of-town locations has proved popular with shoppers.
“During such challenging times we have been proud to play an active role in supporting the communities in which we operate, having created over 1,800 new jobs across the group during the past six months in addition to repaying the £3.7m furlough support originally received during the height of the crisis.
“I am proud of the way in which our colleagues have risen to the many challenges posed by COVID-19.
“I thank them for the commitment, hard work and resilience they have demonstrated in keeping our shelves filled and maintaining an environment which is as safe as possible for our colleagues and customers.”
He added: “Despite the wider economic uncertainty and ongoing restrictions related to COVID-19, we remain confident in our business model and future prospects.”
