Value retailer B&M has swung back into the black in its first year as a listed company as its “rapid” store expansion plan boosted sales by 30%.
- Full-year net profits of £39.9m after loss of £19.4m in prior year
- Sales up 29.5% to £1.6bn
- UK like-for-likes rise 4.4%
The group, which has 425 UK stores, today reported net profits of £39.9m in the year to the end of March, following losses of £19.4m the prior year. However profits before tax, excluding exceptional costs and a “previous financing structure”, rose 55.7% year-on-year to £135m.
Group sales jumped 29.5% to £1.6bn, while operating profits leapt 30.2% to £132.9m.
UK like-for-likes climbed 4.4%, which chief executive Simon Arora said was “pleasing, particularly against the very strong growth in consecutive prior years”.
B&M, whose chairman is former Tesco boss Sir Terry Leahy, revealed that its now serves 2.9m customers a week. “For many shoppers across the UK, B&M is now an established part of their regular shopping habits,” said Arora.
The company, which debuted on the London Stock Exchange last year, sells homewares, household, textiles, toys and “seasonal goods” at low prices, including major brands and its own ranges.
A total of 52 net new stores opened in the year and B&M is revising its guidance for the current financial year with plans for 60 net new openings.
Looking ahead, Arora said B&M will aim to “double” its store estate “during the years ahead” and target larger sites. He said: “We continue to see a good flow of attractive new site opportunities, including a steady stream of suitable stores coming from the larger-spaced retailers as they downsize their portfolios in response to shifts in consumer demand in their markets”.
Arora added: “The retail industry remains competitive and a cold May has led to a slow start for outdoor ranges. Despite this, we remain confident for the year ahead.” The company has also recommended a final dividend of 2.5p per share to be paid on August 7.
B&M also acquired 49 stores in Germany last spring by taking a majority stake in Jawoll. “We are pleased with Jawoll’s progress,” said Arora. “It is still early days but the business has performed well and we are starting to see the benefits of it accessing our sourcing model.”
Conlumino analyst Greg Bromley branded B&M’s group performance as “impressive”. However, he added: “The feasibility and sustainability of this roll-out remains to be seen, especially with many UK high streets already seeing multiple discounters taking space on the same stretch. A future challenge will also likely come from the resurgence of the major grocers, with the Big Four all looking to fight back against declining sales.”