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UK discounter B&M sees earnings soar 83% on pandemic demand

Jun 3, 2021

LONDON (Reuters) – B&M, the British discount retailer, on Thursday reported an 83% jump in annual core earnings, having thrived during the COVID-19 pandemic.

B&M’s stores were allowed to stay open through multiple UK lockdowns because they sell some food, and its low prices and out-of-town locations chimed with consumers, helping revenue to jump 26% to 4.8 billion pounds ($6.8 billion).

The group, whose full name is B&M European Value Retail, said it had enjoyed very strong sales in the last month of its financial year, with the final week in its year to end of March being the strongest in its history, driving earnings growth.

It warned however that trading was volatile on a weekly basis, in particular since COVID restrictions started to ease, and it expects this to remain the case this year as it comes up against strong comparatives.

It said it was too early to predict revenue and profit and while group gross margin is likely to revert to more normalised levels it would work to keep its adjusted earnings margin higher than historical levels. Organic growth is likely to decline.

“The last year has been an exceptional one,” Chief Executive Simon Arora said. “Looking ahead, there are many uncertainties as society slowly emerges from lockdown and trading patterns are likely to be unpredictable for much of the year.”

The FTSE 100 listed group, which sells everything from homewares and toys to electricals and food, said it made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 626 million pounds ($886 million) in the year to March 27 versus guidance of 590-620 million pounds.

($1 = 0.7066 pounds)

(Reporting by Kate Holton; editing by Michael Holden and Sarah Young)