B&M returning £250m to shareholders

Booming Liverpool retailer B&M is returning £250m to shareholders in a special dividend after half-year sales from its 1,097 stores hit £2.27bn. Tony McDonough reports

B&M, BandM, retail, store
B&M is returning £250m to its shareholders. Picture by Tony McDonough


Liverpool-based value retail giant B&M is handing back £250m to its shareholders following another period of booming sales.

In November B&M, which operates from a large distribution centre and head office in Speke in south Liverpool, reported sales of £2.27bn from its 1,097 stores in the UK and France in the six months to September 25, up 1.2% on the same period last year.

On Thursday, the company said it would pay a special dividend of 25p a share to its stock market investors, equating to approximately £250m in total. This is due to what it described as “continued strong performance versus pre-pandemic levels, with ongoing evaluation of its leverage and cash position”.

In a statement to the stock exchange it added: “As a result of that evaluation, the board has now determined to return surplus cash to shareholders in line with the company’s capital allocation framework.”

Its half-year results revealed revenues from the 686-strong B&M UK estate were up 1.3% to £1.9bn. B&M stores in France saw a significant uplift of 10.6% to £155.4m while its UK frozen food chain, Heron Foods, actually saw a 6.1% drop in revenues to £203.1m. Group pre-tax profit rose 2.4% to £241.4m.

Its report said: “Gross margin performance was particularly strong due to a favourable sales mix and limited end-of-season markdown activity across general merchandise categories, while performance in grocery was also pleasing.”

B&M also said it had beaten the UK supply chain crisis by announcing it was already full-stocked for the crucial Christmas trading perhaps. And it also revealed that it was now appealing to more affluent shoppers in increasing numbers.

“The combination of ‘big brands, big savings’ alongside increasingly popular own-branded general merchandise ranges, such as homewares and seasonal, makes for a compelling customer proposition,” it added.

B&M began with a single store in Blackpool in 1976. In 2005 Manchester brothers Simon and Bobby Arora, who ran a successful wholesale business, bought the chain from Private Equity firm Phildrew Ventures. At that time it was still based in Blackpool and its 20 stores generated annual sales of £65m.

The Aroras later relocated the business to Speke. In 2012 private equity house Clayton Dubilier & Rice bought a 60% stake in the business and in 2014 years ago it was floated on the stock exchange with a value of £2.7bn. The Arora family retains a 15% stake.

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