B&M swaps one tax haven for another
B&M has revealed plans to swap Luxembourg, the European tax haven the discount retailer has been domiciled in for over a decade, with Jersey.
The London-listed company, which has its operational headquarters in Liverpool, said the move would simplify its corporate and administrative structure and provide “greater flexibility for returning capital to shareholders going forward”.
It added that this would be completed through share buybacks as well as the fact that shareholders would be able to hold their shares directly through CREST and no longer in the form of CDIs (crest depository interests).
B&M also said that it would become fully subject to the UK takeover code through the move and that dividends paid following the migration will not be subject to dividend withholding tax.
The retailer confirmed that it intends to retain its London listing and its eligibility for inclusion in the FTSE’s UK Index.
B&M moved its corporate domicile to Luxembourg in 2014 as it established B&M European Value Retail S.A. as its ultimate parent company.
At the time, the relocation part of a broader strategy to simplify the company’s structure and potentially attract investment, particularly from US private equity firms.
B&M has previously stated that it doesn’t benefit from its Luxembourg domicile as it pays UK taxes at the full rate.
B&M hails Jersey move as boost for shareholders
In a statement issued to the London Stock Exchange, B&M said: “The migration will entail relocating the company’s domicile from Luxembourg to Jersey, such that the company will become a Jersey company pursuant to a statutory migration under applicable Luxembourg and Jersey law.
“The directors believe that there are a number of benefits that arise from the migration, including simplifying the company’s corporate and administrative structure, providing greater flexibility for returning capital to shareholders going forward, including through share buybacks and by virtue of the fact that following the migration being completed, shareholders will be able to hold their shares directly through CREST and no longer in the form of CDIs.
“In addition, the company would be fully subject to the UK takeover code and would no longer need to rely on the provisions in its articles that are intended to provide a framework for the conduct of any potential takeover offer for the company.
“Furthermore, dividends paid following the migration will not be subject to dividend withholding tax.
“The company intends to retain its London listing and its eligibility for inclusion in the FTSE’s UK Index and will apply for admission of the ordinary shares in B&M Jersey following completion of the migration.”
Profit and share price struggles
The announcement comes after B&M, which is a member of the FTSE 250 index, reported a pre-tax profit of £431m for the 12 months to 29 March, 2025, down from the £498m it achieved in the prior year.
Figures filed earlier this month with the London Stock Exchange also showed the chain’s net debt increased in the year by almost six per cent to £781m while the average number of people B&M employed in the 12 months fell from 41,115 to 40,641.
However, B&M’s group revenue did rise in the year from £5.3bn to £5.5bn.
Off the back of the results being revealed, shares in B&M slumped from 330p to a low of 255p before recovering slightly in recent days.
Addressing its financial performance earlier this month, B&M said: “Despite operational and market challenges in FY25 the group remains well-positioned for the future by continuing to offer customers great value on best-selling products.
“The business model, focused on a disciplined approach to limited-assortment value retailing and cost control, remains robust.
“The underlying market trend towards discount retail continues, and the group’s value proposition will continue to resonate with consumers navigating ongoing economic pressures.
“Initiatives are in place to address the underperformance in FMCG [fast-moving consumer goods] categories and drive average selling prices in general merchandise.
“Continued store expansion in the UK and France, supported by investments in distribution infrastructure, provides a clear path for growth.
“The group recognises that FY26 will bring retail sector-wide challenges of increased minimum wage costs, higher employee National Insurance and other taxes, and inflation on input costs.
“Work continues to reduce the impact of these pressures, through driving productivity improvements and sales volume growth.
The impact of these additional costs and mitigations is reflected in the current range and median of analyst consensus operating profit forecasts for FY26.
“With a robust model, clear growth pathways, and targeted strategic initiatives, the Group is strongly positioned to capitalise on market opportunities and generate significant long-term value for shareholders through disciplined growth and continued cash generation.”
No golden goodbye for departing CEO
Shortly before its annual results were published, B&M announced that it had appointed ex-Tesco executive Tjeerd Jegen as its new CEO.
Jegen succeeded Alex Russo, who joined the company in 2020 and was promoted to the top job in 2022.
B&M announced Russo’s departure in February this year, with analysts citing a worse-than-expected trading performance as a likely reason for his move.
Jegen, who will have a base salary of £928,000, has worked in leadership for roles for over 20 years.
He served as the CEO of Tesco Malaysia, the CEO of Dutch value chain Hema, and the CEO of European discount clothing brand Takko.
His most recent role was CEO of Accell Group, a Dutch e-bike and bicycle parts retailers.
Now, B&M’s annual report has revealed that Russo did not receive a golden goodbye as he stepped down from his role.
According to the document, Russo’s remuneration package fell from £3.1m to £1.8m for B&M’s latest financial year.
While his salary increased from £832,000 to £980,500, Russo’s bonus was slashed from £1.6m to £853,125.
He also did not receive a long-term incentive payout, having been handed £562,206 in the prior year.