B&M has posted robust annual results as cash-strapped shoppers turned to value-oriented retailers to help manage their budgets.
Over the year to 25 March 2023, B&M’s total revenues climbed 6.6% to £4.98bn. This was despite the group lapping strong growth during the Covid crisis, with its sales now 30.7% ahead of pre-pandemic levels.
Group adjusted EBITDA slipped from £619m to £573m as more normal trading conditions returned and the business faced the well-documented cost pressures in the retail sector. Pre-tax profits also fell from £525m to £436m.
In the UK, the B&M fascia saw revenues increase by 4.0% to £4.07bn, driven by like-for-like growth of 0.7% and new store openings. However, the group noted that it exited the final quarter of the year with a like-for-like run rate of 3.2%. EBITDA for the unit decreased by 10.9% to £502m, with margins impacted by the reintroduction of markdown activity.
At the year-end, they were 707 B&M outlets operating in the UK after 21 gross new store openings were offset by 15 closures and relocations.
In France, revenues increased by 22.1% to £431m, reflecting strong LFL performance and new store openings.
Meanwhile, discount convenience chain Heron Foods saw revenues in its 319 stores jump 18.1% to £485m, boosted by new openings and increased consumer demand across all categories.
Chief Executive Alejandro Russo stated that it had been “another year of strong underlying progress” for B&M and added that the long-term future of the business looked “very positive”.
He added: “We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value … We expect to grow sales and profits in FY24, despite economic uncertainty.”
In the year ahead, the company plans to open a further 30 B&M shops in the UK, about 10 in France and around 20 Heron Foods stores.
In the first nine weeks of its new financial year, B&M UK like-for-like sales were running at 8.3%, while momentum continued in France and at Heron Foods. The group stated that it expects its adjusted annual EBITDA to be higher this year.
News of the positive outlook helped drive up the group’s share price by over 7% in early trading.
NAM Implications:
- Time for suppliers not already on board.
- To find ways of trading with B&M?
- In an era made for discounting…
