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B&M expects record full year earnings after Christmas sales grow despite weaker UK performance

“Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings, representing our fourteenth consecutive year of profit growth,” said chief executive Simon Arora
B&M
B&M said December’s positive trading momentum has continued into January

B&M European Value Retail SA (LON:BME) reported a 12.1% increase in revenue over the key Christmas trading period as international sales growth offset a decline in the UK.

Total group revenue rose to £1.09bn in the third quarter to December 29 from £969.8mln the same period a year ago.

At the B&M variety retail business, UK total sales increased 4.5% to £874.5mln but on a like-for-like basis fell 1.6% compared to a 3.9% rise last year amid a challenging retail market. 

The company said like-for-like cash gross margin at B&M was held back by a “disappointing” November but had a strong December so delivered a 3.2% increase for the period.

“December’s positive trading momentum has continued into early trading in January,” the group said.

“Careful control of inventory has meant that stocks for the January 2019 end of season sale period are below the levels of last year, which should provide further support to the margin over Q4.”

READ: B&M shares fall as sales ease after end to warm summer months

The UK Heron Foods business grew revenue by 12.6% to £89.9mln in the quarter as the company added nine new stores.

B&M’s German discount retailer Jawoll increased revenues by 4.9% to £55.3mln, driven by sales of toys and electrical products.

French discount chain, Babou, which B&M bought last October, contributed £67.3mln of revenues in the quarter.

B&M said it remains on course to achieve sales and earnings growth this financial year and the next. The group plans to open 56 new B&M stores in 2019. The group plans to open 56 new B&M stores in 2019.

“Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings, representing our fourteenth consecutive year of profit growth,” said chief executive Simon Arora.

“The business’ ability to manage profitability through uncertain trading conditions is a testament to the resilience of the business model and the strong operational controls we have in place.

“We continue to open new stores and win market share when other retailers are retrenching.”

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B & M European Value Retail Timeline

Article
March 01 2019

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