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B&M European Value Retail SA on Wednesday said annual profit fell below market expectations despite revenue rising by 6.6%, but expects sales and profit to improve next year.
The Luxembourg-based variety goods value retailer reported revenue of £4.98 billion for the year ended on March 25, up 6.6% from £4.67 billion the year before. This is in line with Barclays’ estimates.
The company said the rise in revenue was due to positive like-for-like in all businesses, which includes inflation and mix effects, and by strong trading from new stores.
Pretax profit, however, fell by 17% to £436 million from £525 million, as earnings per share dropped by 18% to 34.7 pence from 42.1p. Barclays expected B&M to report pretax profit of £454 million.
Operating costs increased by 5.7% to £950 million from £899 million the year before.
Group adjusted earnings before interest, tax, depreciation and amortisation fell 7.4% to £573 million from £619 million the year before.
Chief Executive Alejandro Russo said: ‘We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value. A strengthened management team and the hard work of our 39,000 employees executing our unchanged strategy will help us deliver in the current financial year. We expect to grow sales and profits in [financial 2024], despite economic uncertainty.’
B&M recommended a final dividend of 9.6p per share, down 17% from 11.5p a year prior. This brings the company’s full-year dividend to 14.6p, down 12% from 16.5p.
Looking ahead, B&M said it expects to grow sales and profits in financial 2024, despite economic uncertainty. It added that in the first nine weeks of financial 2024, B&M UK like-for-like sales have run at 8.3%. It expects group adjusted Ebitda to be higher than financial 2023.
Shares were up 4.6% at 493.00 pence each on Wednesday morning in London.
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