From its base in south Liverpool, B&M operates 1,091 value retail stores in the UK and France and says strong trading over the summer has raised profit forecasts to £285m. Tony McDonough reports

Liverpool-based value retail giant B&M has significantly raised its profits forecasts after  stronger-than-expected sales over the past six months.

From its base in Speke in south Liverpool, B&M operates 1,091 value retail stores in the UK and France under the B&M, Heron Foods and Babou brands. It has increased the number of outlets by 41 in the past year, including 25 new B&M stores.

In June the company reported annual sales for the year to March 27 had rocketed 25.9% to more than £4.8bn in what chief executive Simon Arora described as an “exceptional” year. Pre-tax profits more than doubled from £252m last year to £525.4m.

In a new trading update on Wednesday, stock market-listed B&M reported that its momentum was continuing. It said that while group revenues year to date have been broadly in line with market expectations, gross margins have been stronger than originally anticipated in the B&M UK fascia business.

The update added: “Performance of general merchandise and seasonal categories has been particularly encouraging. Sell-through rates in those categories have been high and accordingly end of season markdowns have been limited.”

As a consequence of the strong trading, B&M now expected adjusted EBITDA (a measure of profitability) for the 26-week period to September 25 to be in the range of £275m to £285m. This is way ahead of current City analyst expectations of £235m.

B&M added that although it is “well positioned” for the upcoming “golden quarter” (Christmas trading period), trading patterns and strength of customer demand remain “highly uncertain” in the coming months. The business will report its half year results on November 11.