- Guidance updated after robust ‘golden quarter’
- Planned special dividend of 20p
- UK consumer spending ‘more resilient than feared’ says Shore Capital analyst
Budget retail chain B&M (BME) shone in its ‘golden quarter’ - the three-month period encompassing Christmas - as sales held up and supply chain issues eased. Its shares were marked up 0.9% to 449.2p as the company also nudged up guidance and announced plans to pay a 20p special dividend.
In the 13 weeks to 24 December revenue was up 12% to £1.57 billion from £1.4 billion for the same period in 2021. The UK operations saw a 10% increase to £1.3 billion, up 6.4% on a like-for-like basis. Growth in the smaller French business was particularly strong - with revenue up by a quarter to £136 million.
EARNINGS GUIDANCE NUDGED HIGHER
Frozen food seller Heron Foods enjoyed a 23% increase in revenue at £129 million. Encouragingly performance was good across all categories, both in grocery and general merchandise. The intended special payout of 20p is down 20% from the 25p B&M paid during financial year 2022.
For the financial year to late March, adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) are now expected between £560 million to £580 million, coming above current analyst outlook consensus of £557 million. The anticipated adjusted EBITDA still represents a drop of at least 6.3% from £619 million in the 2022 financial year. The company also hinted at some easing of supply chain challenges.
Shore Capital Eleonora Dani said: ‘Full employment in the UK and a return to “normality” meant that consumer spending on both food and non-food was more resilient than feared.
‘B&M is a well-run company with a clear customer proposition and a growth story centred on further store rollout with a capital-light model and a fast payback.’
