Liverpool retail giant B&M issues profits warning and announces the departure of chief executive Alex Russo after just over two years at the helm. Tony McDonough reports
Value retailer B&M lowered its full-year profit forecasts for the second time in a few weeks on Monday and announced the departure of chief executive Alex Russo.
South Liverpool-based B&M, which operates more than 1,100 stores in the UK and France, said that in the full year to March 31, 2025, it expects adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of between £605m to £625m.
This is lower than the £620m to £650m it forecast in January which in itself was a downward revision on the previous forecast range of £620m to £660m.
At the end of last week B&M shares plummeted and on Monday morning they were trading at 268p. This is a big fall from the 500p share price seen at the end of February 2024.
In Monday’s trading update, B&M said its revised profit forecasts “reflects the current trading performance of the business, an uncertain economic outlook and the potential impact of exchange rate volatility on the valuation of our stock and creditor balances”.
It also said it was in the “advanced stages of a recruitment process” after chief executive Alex Russo notified the board of his intention to retire.
Mr Russo took over the helm of the business in September 2022. This followed the retirement of Simon Arora. He and brother Bobby Arora had acquired the then modest-sized B&M in 2005 and turned it into a UK retail powerhouse with annual sales of £4.2bn.
A City analyst at Panmure Liberum, Wayne Brown, noted the timing of Mr Russo’s departure, saying: “The retirement of Alex Russo and a downgrade are unlikely to be mutually exclusive events.
“The performance of B&M has been disappointing for the past year, but we were hopeful that things were turning and momentum in the first quarter was going to ensure EBITDA consensus guidance of £620m to £650m was going to be met in FY25. This has now been downgraded to £605m to £625m.”
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Mr Russo himself said: “I have thoroughly enjoyed my time at B&M since joining in 2020. The business has been successfully steered through the pandemic years and is now larger and stronger with group revenues increasing by almost 50%.
“It has been professionally rewarding to assemble and work with a high quality leadership team and to retire leaving growing businesses with great potential in both the UK and France.”
B&M’s board has said that MR Russo will be eligible for an annual bonus for the current financial year and will retain his awards under the company’s share plans.
Company chair Tiffany Hall said: “I would like to thank Alex for his commitment, energy, dedication and hard work since joining the business in 2020 and, in particular, since becoming CEO in September 2022.
“Alex has increased our store footprint in both the UK and France and driven a relentless focus on high operational standards and low costs, enabling the company to provide great products and everyday low prices to our customers whilst generating continued strong cash returns for our shareholders. We wish him well for the future.”
