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B&M: Bargain hunting Brits help budget chain’s revenues top £1bn

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Seven new B&M stores were opened in the UK though four were also closed.
Seven new B&M stores were opened in the UK though four were also closed.

Brits seeking out bargains have continued to drive earnings at value retailer B&M as it reported a 13.5 per cent rise in group revenue in the first leg of the year. 

The news, however, failed to impress investors as its share price slumped over 6 per cent when markets opened this morning.

The homeware to grocery seller said like-to-like-sales in its UK arm rose 9.2 per cent, as red hot inflation sent shoppers searching for the the best deals. 

Revenues in its UK portfolio, which spans over 700 sites, also reached more than £1bn up from £957m in the same period last year. 

“Our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards,” Alex Russo, chief executive, said. 

In the midst of the cost of living crisis, business has been booming for B&M.  In May, the retailer revealed plans to roll out an extra 30 stores across the UK to up keep demand. 

For the year, the budget chain, gained revenues of £4.9bn up from £4.6bn, as the group improved its offering in its existing stores and shoppers turned to the brand for cheap prices.

“B&M is the ultimate play on the cost-of-living crisis, offering a range of goods at cheap prices. Chief executive Alex Russo says the business has ‘strong trading momentum’ which is no wonder when interest rates keep going up,” Russ Mould investment director, at AJ Bell, said.

“A lot of people are feeling the pinch of the higher cost of borrowing and are looking for ways to trade down to cheaper items for the things they need in the home. This is not simply a pound store offering, B&M is a place for people to buy things like garden furniture, desks and kettles.”

He added: “So why has the share price fallen 6 per cent on the news? It could be the lack of full-year guidance which implies no upgrades to earnings expectations. The shares have already had a strong run this year, up more than 30%, so perhaps some investors are banking profits while the going is good.”