Liverpool-based value retailer B&M, which operates 1,050 stores in the UK and France, is likely to exceed earning expectations after already smashing through the £1bn barrier. Tony McDonough reports
Liverpool-based value retail giant B&M says it has made a “strong” start to its financial year with earnings to the first half likely to significantly exceed expectations.
In June the company, which operates 1,050 stores in the UK and France, reported rising sales for the 12 months to March 28, 2020, of £3.8bn with pre-tax profits also up to £252m from £244.3m a year earlier.
B&M, which has its headquarters in Speke, passed the £1bn sales mark for its current financial year on June 27. In a trading update on Tuesday it predicted that EBITDA (a measure of profitability before other deductions such as interest and taxes) is likely to be in the range of £250m to £270m in the six months to September 26.
This is significantly above the expectations of City analysts who had forecast an EBITDA for the company of £208.1m.
The trading statement said: “Against a highly uncertain economic backdrop and continued impacts from COVID-19, B&M was well placed to continue to grow profitably in the UK and continue to develop and prove the proposition in France.”
However, it added: “There remains considerable uncertainty in relation to both the progression of COVID-19 and the economic outlook and it is therefore hard to predict trading levels for the second half of the year.”
During its last financial year the company increased the number of B&M stores by 36 to 656. Its Heron Foods brand, also in the UK, rose by 12 to 293, and its Babou outlets in France also increased by five to 101. In March it sold its loss-making Jawoll retail chain in Germany.
The business plans to open a further 30 new B&M stores in the UK during the current financial year. The rate of new openings is impacted by disruption from COVID-19 but its overall long term target of at least 950 B&M stores in the UK remains unchanged.
In France 19 Babou stores out of a total estate of 101 stores, are now trading as B&M but the controlled testing of the performance of the converted stores was subsequently interrupted by the eight-week week COVID-19 closure period from March 15 to May 11.