Value retailer B&M European Value Retail (BME) saw from strong trading over the holiday period sparking a 20.5% jump in revenue during the final quarter of 2016.
This is unexpectedly robust and increases confidence that the £2.77bn company will meet adjusted earnings before interest, tax, depreciation and amortisation in the year to 31 March 2017.
Investors continue to chase the share price higher, up 7.2% to 296.8p.
Overall sales revenue rose 21.8%, on a constant currency basis, to £789.1m, up from £647.8m during the equivalent October to December period in 2015. However, new stores are to some degree cannibalising sales at existing outlets, leading to a 1.2% sales decline, although management remains confident that this will lessen through early 2017.
UK like-for-like sales are 7.2% higher over the same period, which has been supported by its store opening programme and strong revenue performance.
Jonathan Pritchard, analyst at stockbroker Peel Hunt, remains optimistic that B&M will continue to win market share across retail and within the discount sector. He continues to advise clients to buy the stock.
An extra day of trading in 2016 compared to the prior year has aided B&M’s performance by boosting its like-for-like total by 1.1%.
Broker Numis is also upbeat on the company and its shares, analyst Matthew Taylor pointing out the stock's sector outperformance while continuing to trade at a discount to a selection of European retail growth industry peers.
The company’s German operation, Jawoll, is also performing well, with revenue up 43.2% in sterling terms to £47.7m.
