B&M annual sales swell to nearly £5bn

B&M forecasts higher core revenues for fiscal year 2023-24 as customers pick up budget foods and goods in the cost of living.

Group sales in the year to March 25 were up 6.6 per cent to around £5 billion, with the FTSE-100 retailer supported by shoppers switching to cheaper alternatives, including own-brand products, an area in which B&M is leading the way. performed well in recent years.

“We are actively responding to the short-term pressures on consumers from the cost-of-living crisis with a relentless focus on price and value,” said B&M CEO Alejandro Russo.

B&M shares rose sharply today, rising 6.34 percent or 29.90 p this morning to 501.80 p, after rising more than 28 percent in the past year.

The group opened 21 new stores during the year, offset by 15 closures and relocations. Net debt at the end of the fiscal year was £724 million.

It said: ‘We will accelerate our new store openings to 40 stores per year, with an expected number of around 30 in FY24, but the focus will always be on new stores generating industry-leading returns on investment.’

The group added that it “would not open unprofitable stores just to meet a store opening target.”

Shoppers are buying more of their own label lines, which tend to be less expensive than brand name products, leading discount retailers to outperform their mainstream peers.

UK supermarket sales of private label products have grown twice as fast as branded products this year, according to recent data from market researchers NIQ.

B&M, which sells everything from toys to frozen foods and garden furniture, reported an adjusted core profit of £573 million for the 12 months ended March 25, down 7.4 percent from the previous year.

The company had expected adjusted earnings before interest, tax, depreciation and amortization of £560 million to £580 million.

B&M sales, which had been boosted by Covid-induced demand for essential items, continued to outperform pre-pandemic times.

However, the annual margin fell from 13.2 percent the year before to 11.5 percent, due to a decline in UK retail sales in the first half of the year.

The like-for-like sales of the British division in the first nine weeks of the new financial year increased by 8.3 percent.

Russ Mould, director of investment at AJ Bell, said: ‘During Covid, B&M benefited as one of the few retailers able to stay open and operate.

“Performance over this period has therefore had an asterisk added to it, which is why investors will be particularly pleased if the value benchmarks pay off in a more normal retail environment.”

In theory, B&M should be well placed against a background where households are really watching their money and that is largely reflected in this latest trading update. The company also generates a lot of money that it can return to shareholders.

“There is a strange warning sign here and there, to which the market may pay some attention. In particular, the company’s stock position has increased slightly, indicating a possible slowdown in non-food sales.’

The group, which also operates in France and has Heron Foods stores, has 707 B&M stores in the UK.