Shares of Liverpool-based retailer B&M European Value Retail fell about 7% on Thursday after it published results for the 52 weeks to March 28, 2020, showing increased revenue and profit but also warning that recent strong trading “is unlikely to be sustained.”
B&M said revenue rose 16.5% to £3.81 billion, profit before tax increased 3.2% to £252 million, and full year dividend will rise 6.6% to 8.1p per share.
However, in his review, B&M CEO Simon Arora said: “Our strong trading performance in the B&M UK stores in the initial eight weeks of the new financial year was boosted in particular by our gardening and DIY categories as announced on 29 May …
“Whilst trading has continued to be strong in more recent weeks, the growth rate is unlikely to be sustained as gardening ranges have sold through and stock in some other categories is now lower than normal for this time of year …
“There are greater than usual uncertainties during the remainder of the year.
“The economic environment and its impact on customers is difficult to predict.
“In addition to the impact of social distancing on operating costs, should this continue during the winter months, it is likely to reduce footfall due to the reluctance of customers to queue outside during less pleasant weather, and detract from our ability to serve customers in their usual numbers during the peak trading season …”
Liverpool-based B&M is registered in Luxembourg and its shares trade in London, where its stock fell 7% on Thursday to 353p to give the firm a stock market value of around £3.5 billion.
Arora added: “In this last financial year our core B&M UK business delivered solid growth, as did our Heron Foods convenience store business.
“However, so much about our lives has changed so profoundly and so fast as a result of Covid-19 that a financial year which ended only a short time ago already seems a world away.
“It is an understatement to say that the progress made during the year has been overtaken by recent events.
“The challenges posed by the virus have been beyond anything we have experienced before; they have tested every aspect of the way we do business in recent weeks and I’m pleased to say that B&M is coming through the crisis well because of the strength of the B&M proposition and the way our team has responded to those challenges.
“For that, I express my gratitude to all of my colleagues across the business.
“Looking ahead, there are of course many uncertainties for the economy, consumers and not least for the retail industry.
“We will all be living with the consequences of the virus and the public health responses to it for a long time to come.
“I am however confident though that B&M with its modern network of mostly out-of-town stores, well-invested infrastructure and value-led variety offer is well positioned to support the communities in which we trade for whatever lies ahead.
“The health and safety of our colleagues and customers will remain a priority.”