After posting robust year-end results, B&M suggested it was in a better position than many other retailers as the UK emerges from lockdown and cash-strapped consumers focus on value in the months ahead.
B&M’s total group revenue rose by 16.5% to £3.81bn over the 12 months to 28 March, with pre-tax profit up 3.2% to £252m.
Its main B&M chain in the UK saw sales grow 12.6% to £3.14bn, driven by new store openings and a like-for-like increase of 3.3%. This included a 6.6% like-for-like rise in its fourth quarter, driven by people stockpiling groceries at the start of the pandemic. The fascia’s adjusted EBITDA was up 8.7% to £319.8m.
As flagged last month, B&M’s sales in eight weeks since the year-end have jumped 22.7% despite a fall in customer numbers. With most general merchandise stores closed during the lockdown, B&M benefitted from consumers buying its DIY and gardening products. Excluding those two categories, B&M’s like-for-likes rose by 10.3% over the eight-week period.
However, B&M has warned that the strong growth in DIY and gardening may represent “significant pull-forward in demand”, driven by warm weather and customers being at home during the crisis. The company has also highlighted that it is experiencing higher than normal operating costs in its distribution centres and stores due to social distancing measures.
During the year, B&M opened a net 36 new stores in the UK and is planning to open a further 30 in the current financial year. The group stated whilst the rate of new openings has been impacted by the disruption caused by the crisis, its long-term target of at least 950 B&M stores in the UK remains unchanged.
Meanwhile, the 293-strong Heron Foods chain saw sales rise 10.1% to £389.9m, with EBITDA up 28.2% to £25.5m. Without giving a figure, the group said the supermarket business had seen “strong” like-for-like performance.
The recently acquired Babou business in France generated revenues of £283.4m, although recent trading has been impacted by the country’s lockdown measures. The 101 stores are currently being converted to the B&M fascia.
Looking ahead, the group said: “For many retailers, the outlook in the Covid-19 world is more about survival than it is about the shape of the year ahead and beyond.
“B&M has significant advantages. The ‘variety retailing’ model with its core strength in everyday essentials, a well-invested infrastructure, strong value credentials, a modern and convenient store network with continuing growth opportunities in the UK and France, mean that the business is better positioned and more resilient than most to deal with the new realities.”
NAM Implications:
- On balance, better to be with B&M at this stage in its evolution…
- …given its fit with current market conditions…
- …and the emergence of the super-savvy consumer.
