B&M has posted a jump in full-year profits despite ongoing struggles in the German market, driven by its rapid store expansion programme.
The value operator said pre-tax profit swelled 10.3% to £249.4m in the 52 weeks to March 30.
Adjusted to strip out the impact of exceptional items, earnings before tax advanced 8.2% to £239.8m. Adjusted EBITDA climbed 11.9% to £312.3m.
B&M hailed a 17.1% spike in group revenues to £3.5bn during the year, but like for likes inched up at the much slower rate of 0.7%.
Sales across B&M’s Heron Food business surged 68.6% to £354.1m, while revenues from its core B&M fascia were up 8.7% to £2.8bn.
B&M opened a net 44 new UK stores during the financial year, taking its portfolio to 620 at by year-end. It also launched 16 standalone Heron Foods shops – it now operates 281 – and a net 10 new stores in Germany, which trade under the Jawoll banner.
Despite taking its Jawoll estate to 96 shops – and growing sales 6.7% to £213.7m – B&M’s challenged German business swung to the red.
Jawoll booked an adjusted EBITDA loss of £10.2m, compared to a £5.6m profit the previous year.
B&M said performance in Germany “was hampered by the need to clear obsolete stock to make way for new ranges”.
A “greater proportion” of the products Jawoll stocks will now be sourced through B&M’s supply chain – a move the group said will allow the chain to “offer its shoppers a more compelling product range”.
Looking ahead, B&M said the group had made a “pleasing start” to its current financial year, with like for likes in its core UK fascia registering “mid-single-digit” growth to date.
B&M boss Simon Arora said the business had delivered “strong results” despite the “challenging backdrop of continued structural change in our industry, rising costs and uncertain times for consumers”.
He hailed the “important progress” made in Germany and France – where it acquired the Babou chain last October – but cautioned there was “much work to be done to implement the disruptive, value-led B&M model in these large new markets”.
Arora added: “We enter the new financial year with renewed trading momentum particularly in the UK, a high-quality new store expansion programme in place, and investing in our new infrastructure to support future growth. I’m confident B&M is well positioned to deliver further strong progress in the current year and beyond.”