Bargain-loving Brits help drive profit at B&M with 45 new stores in the pipeline
Value retailer B&M Bargains is expecting profits to come in at the top range of guidance, as demand for bargain goods continues to surge amid the cost of living crisis.
The Liverpool-based group, which included Heron Foods, said group revenue increased by 10 per cent in the year to March to £5.5bn.
A squeeze on living costs has driven customers to seek out affordable goods, leading to a rise in popularity in stores such as B&M.
During the financial year, B&M also acquired 51 Wilko stores for £13m after the fellow discounter collapsed into administration.
The group said it opened 47 B&M UK new stores, two ahead of previous guidance, and the Wilko conversion sites were “performing ahead of expectations”.
Alex Russo, chief executive, at B&M said: “The group has performed well in the year delivering strong operational execution.
“We serve our customers through a relentless focus on everyday low prices (EDLP), great product ranges and excellence in operational standards. This delivers profitable, cash generating growth for our shareholders.”
He added:”The business and team are well set up for the year ahead, our pipeline remains on track to open not less than 45 UK B&M stores in each of the next two financial years and our French and Heron businesses continue to demonstrate significant profitable growth potential.”
For the full financial year, the group now expects profits to reach £629m, the top end of its £620m-£630m range.
This figure is nearly 10 per cent higher than last year and 83.9 per cent on the year of the pandemic.
Analysts at Peel Hunt rated the firm a ‘Buy’ this morning, as its shares slightly dropped by 2.45 per cent AT 9AM.
They said: “The new store opening programme has been delivered (indeed two more stores opened than expected) and the performance of the new Wilko stores is ahead of expectations.
“B&M expects to make £629m of EBITDA this year, which is nicely at the top of the previous range of £620-630m. All in all, a solid set of numbers and one that the market will probably enjoy, as the shares have been pretty weak into the numbers from 12x PE.”