B&M set to unveil bumper earnings as cash-strapped shoppers go bargain hunting

B&M, the fast-growing discount retailer, is expected to unveil bumper earnings for the past year as its value proposition continued to draw in customers during the pandemic.

The group is this week expected to reveal adjusted earnings of at least £590 million for the year to the end of March. It is also expected to post higher revenues after its UK stores remained open due to their essential status during lockdown.

Nevertheless, shareholders will be keen to find out if the group was able to maintain the strong revenue growth witnessed in the quarter to Christmas in the final three months of the financial year.

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B&M, which operates a large business in mainland Europe, said last year that it saw a jump in the number of new customers coming into its stores, attracted by its discount prices.

B&M said last year that it saw a jump in the number of new customers coming into its stores, attracted by its discount prices. Picture: Nick Potts/PA Wire

Investors will be keen to hear how the business plans to retain customers while maintaining its profit margins.

AJ Bell investment director Russ Mould said: “In terms of the details, analysts will be looking at like-for-like sales growth in the final quarter.

“It was running at 21 per cent year-on-year in the third quarter at UK’s B&M stores and was positive at value convenience store chain Heron but was slightly down at the French operations, which run under the Babou and B&M France brands.

“Attention will then switch to the outlook for the year to March 2022.”

HSBC analyst Andrew Porteous said he expects B&M to “consolidate pandemic gains” amid expectations that customer behaviours will have become embedded.

“While B&M will face more competition in an open economy, it will also benefit from there being more footfall around,” he noted.

“Consumers that discovered its offer last year are likely to remember its attractions while visiting neighbouring stores.

“We think this combines into a very reasonable outlook for B&M, which has clearly made gains during the pandemic and has the capacity to positively surprise against realistic expectations as things open up.”

In March, the company – whose full name is B&M European Value Retail – said it expects to deliver earnings of between £590m and £620m for the past year.

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