Discounter B&M shares sink despite profit doubling during Covid pandemic
Discount retailer B&M saw profits soar during the last financial year as its low prices lured in customers throughout the pandemic.
B&M’s adjusted pre-tax profit surged 107 per cent to £540.1m in the year ended March 2021.
Total group revenues were up 26 per cent to £4.8bn, while annual core earnings jumped 83 per cent to £626.4m.
However, investors binned B&M shares, sending the retailer to the bottom of the FTSE losers board today. Shares fell 4.6 per cent to 535p by midday.
The FTSE 100-listed group, which sells everything from homewares to food, also opened 43 new stores as shoppers flocked to its B&M and Heron Foods shops.
“Our results reflect the speed at which we responded to the challenges presented by Covid-19, and the strength of our execution,” said Simon Arora, B&M chief executive.
“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.”
Shares in B&M are up some 60 per cent over the past year, easily outpacing the FTSE 100, in recognition of how the firm has kept Britain fed during the multiple rounds of lockdown.
March’s trading update gave an early flavour of this, with sales, margins and profits all higher than expected.
Attention will now switch to the outlook for the next year, where chief executive Simon Arora believes the company is “well positioned” to support the communities in which it trades.
“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.”