B&M: resilient results, wary of COVID headwinds

Date : 11 June 2020

Laura Jacobson

Head of Insight - RA UK

The group delivered 16.5% revenue growth to £3.8bn in its latest annual results. However, it anticipates slower store openings and ongoing impact of social distancing in the year ahead.

Results in brief (52 weeks to 28th March 2020)

B&M: Revenue +12.6%. LFL +3.3% (Q4 +6.6%)

Heron: Revenue +10.1%. Positive LFL growth

Babou: £154m revenue

COVID-19 disruption slowing store openings in current financial year

B&M forecasts it will open 30 stores this year, and these will be backloaded to the end of the period, due to the impact of COVID-19.

In the previous year, the retailer opened net 36 stores, including 12 in the south of England. This takes its total store count to 656 stores.

Its overall long-term target remains 950 stores in the UK.

Outlook uncertain with complex headwinds and tailwinds

In the lockdown period, whilst footfall decreased as a result of social distancing (B&M temporarily closed 49 stores for 3 weeks), this has been offset by higher average transactions. High value DIY and garden furniture were amongst the big ticket items that performed well due to warm weather in May. The trend of lower frequency, higher spend visits has continued into the new financial year.

Longer term, B&M anticipates the appeal of discount to remain strong, whilst rates relief will offset some of its increased costs. However, the possible extension of social distancing into autumn and winter, when shoppers may be reluctant to queue, remains a major area of uncertainty. The challenge of serving customers through times of peak trading is also a concern.