B&M revenue tops £4.8bn, but outlook ‘uncertain’

Liverpool-based B&M European Value Retail S.A. said on Thursday its revenue soared 25.9% to just over £4.8 billion for the 52 weeks to March 27, 2021, as it traded through the Covid-19 pandemic as a designated “essential retailer.”

Group statutory profit before tax increased 108.5% to £525.4 million.

Recommended final dividend increased by 140.7% to 13p per share, bringing the full year ordinary dividend to 17.3p per share (FY20: 8.1p), at the top end of the firm’s ordinary dividend pay-out policy.

“The strong performance and high cash generation have enabled the group to pay dividends totalling £697m in FY21,” said B&M.

“This included the £150m special dividend relating to the sale and leaseback of the Bedford facility declared in FY20, and a further £450m of special dividends declared and paid in FY21.”

B&M is based in Liverpool and registered in Luxembourg — but its shares trade in London, where its stock has risen about 50% in the past 12 months to give the firm a current stock market value of around £5.5 billion.

However, B&M shares fell about 4% on Thursday after the results were announced as CEO Simon Arora warned in his outlook that “there are many uncertainties as society slowly emerges from lockdown and trading patterns are likely to be unpredictable for much of the year.”

Arora said: “The last year has been an exceptional one. 

“Our results reflect the speed at which we responded to the challenges presented by Covid-19, and the strength of our execution. 

“The core B&M UK business, as an essential retailer, traded throughout the year and welcomed a number of new shoppers, with colleagues working tirelessly to maintain on-shelf availability and provide a safe shopping environment. 

“We also made strong progress in France, despite many stores being closed for up to ten weeks throughout the year. 

“I express my sincere thanks to colleagues across the group for all of their efforts and determination.

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. 

“Within our UK business, we will be up against the strong comparatives from last year but we remain confident that the B&M customer proposition, with its modern network of predominantly Out of Town stores and value-led variety offer, will prove highly relevant to the needs of shoppers. 

“As such, we are well positioned to support the communities in which we trade, retain the loyalty of new customers, and to continue our store roll-out strategy.”

AJ Bell analyst Danni Hewson said: “Value chain B&M was one of those rare retail names which did well during the pandemic and as a result its sales trajectory is a mirror image of most other retailers which are seeing sharp increases in revenue as restrictions are eased.

“Having received the prized ‘essential retailer’ status thanks to its groceries offering, the company was able to trade at a time when most rivals, other than the supermarkets, were shuttered.

“This inevitably allowed the B&M to snaffle market share and set a very hard act to follow for 2021.

“There was also a stockpiling effect in the early stages of Covid-19 which further inflated sales.

“While some level of drop off is only to be expected, shareholders will be crossing their fingers that the business can hold on to at least a decent chunk of the new customers it won in 2020.

“This means it needs to get the basics of retail absolutely spot on, ensuring stores remain attractive, clean and safe destinations with the products they want at attractive price points.

“One benefit the company enjoys is that a lot of its sites are in retail parks with ample parking, which might suit consumers nervous of public transport and more reluctant to frequent a busy high street as we emerge from Covid.

“The company is continuing with an ambitious rollout of new stores and it sounds like it will remain on the lookout for any opportunities that arise as peers who were harder hit in the last 12 months exit the market.”