B&M reports a 3.2% increase in annual profit despite Coronavirus restrictions

B&M reports a 3.2% increase in annual profit despite Coronavirus restrictions
Written by:
Wajeeh Khan
11th June, 10:35
Updated: 11th June, 10:39
  • B&M reports a 3.2% increase in annual profit despite Coronavirus restrictions.
  • The retailer opens 36 net new stores in the UK and targets 950 stores in the long term.
  • The UK-company posts a 6.6% increase in its annual dividend to 8.1 pence a share.

B&M (LON: BME) said on Thursday that its annual pre-tax profit came in 3.2% higher at £252 million. The company also expressed confidence that it is well-positioned to survive the ongoing Coronavirus pandemic that has so far infected a little under 7.5 million people worldwide and caused more than 419,000 deaths.

Shares of the company were reported 2% down in premarket trading on Thursday. The stock dropped another 7% on market open. At £3.46 per share, B&M is roughly 15% down year to date in the stock market after recovering from a low of £2.66 per share in early April. Learn more about how to choose winning stocks.

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B&M opens 36 net new stores in the UK

Founded in 1978, the British discount retailer deals in everything from electricals to furniture to food. According to B&M, it delivered £1 million in food banks and cash donations since the end of the year. The company also accentuated to have offered discounts worth £2.9 million to NHS workers.  

The retailer opened a net total of 36 new stores in the United Kingdom in fiscal 2019-20. It now operates 656 stores in the country. Despite COVID-19, B&M plans on opening 30 new stores in the current financial year. In the long term, the company has a target of a minimum of 950 stores in the UK.

In the year that ended on 28th March, B&M registered a 16.5% year over year increase in its revenue to £3.8 billion. In the UK alone, its revenue jumped 12.6% in the recently ended fiscal year. The company also posted a 6.6% increase in its annual dividend to 8.1 pence a share.

B&M reports a 22.7% increase in underlying sales

As per B&M, its UK-based stores remained open during the countrywide lockdown in recent months. In its report in May, the retailer said that in fiscal 2020-21 to date (8 weeks), it has seen a massive 22.7% increase in underlying sales in the United Kingdom. B&M attributed the sales increase to a significantly higher demand for DIY (do-it-yourself) and gardening products.

In recent weeks, B&M European Value Retail said, trading has remained strong but warned that the growth rate is expected to take a hit in upcoming months as multiple categories including gardening products are now running low on stock.

At the time of writing, the Luxembourg-headquartered variety retailer has a market cap of £3.45 billion and a price to earnings ratio of 28.75.

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