11th Nov 2021 11:01
(Alliance News) - Shares in B&M European Value Retail SA fell on Thursday after a weak start to the new quarter, but the company remains upbeat as it is well-stocked and well-prepared for the Christmans period ahead.
Shares in the FTSE 100-listed variety store chain fell 5.4% to 609.18 pence each in London on Thurusday.
For the 26 weeks to September 25, pretax profit rose 2.4% to GBP241.4 million from GBP235.6 million.
Revenue increased by 1.2% to GBP2.27 billion from GBP2.24 billion last year.
B&M noted more challenging trading conditions in frozen food-focused retail chain Heron Foods, as average transaction values for grocery shopping normalise to pre-pandemic levels, but the chain saw "satisfactory earnings through careful cost control and cash discipline".
Chief Executive Simon Arora said: "We have responded decisively to supply chain challenges by leveraging our strong supplier relationships and we have improved in-store execution. As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges."
Looking at current trading, in the first six weeks of the third quarter of its financial year, one-year like-for-like sales have been 8.9% lower. The the prior year six week period saw highly elevated sales due to unusually early Christmas trading, it noted. On a two-year basis versus pre-pandemic levels of financial 2020, like-for-like sales have been up 15%.
B&M declared an interim dividend of 5.0 pence up 16% from 4.3p paid last year.
"Although the pathway to a 'new normal' remains uncertain and the industry faces a number of supply and inflationary pressures as we enter the second half of the financial year, we are very confident that the B&M Group is well positioned to navigate these and will continue to be successful both in the UK and in France," Arora said.
Looking ahead, inventory levels and in-store availability remain good, with the company having taken receipt of imported goods earlier than normal in response to the supply chain constraints and shipping disruption in both Asia and the UK.
"As such, the business remains focused on maintaining a very strong two-year performance for the second half of the financial year," the firm said.
By Greg Roxburgh; [email protected]
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