B&M upgrades forecast after strong December

Variety discounter B&M European Value has upgraded its full-year profit forecast after a strong third quarter and will pay a £200mn special dividend as a result.

The FTSE 100 company, which trades from more than 700 stores in the UK and 113 in France, said adjusted earnings before interest, tax, depreciation and amortisation would be between £560mn and £580mn in the year to March. Analysts had forecast an average of £557mn, it added.

The retailer will pay a 20p per share special dividend — or a total of £200mn — in February under a longstanding capital allocation policy that returns surplus funds to shareholders.

Sales in the 13 weeks to December 24 were up 12.3 per cent to £1.57bn, with UK sales rising 10.4 per cent. Same-store sales in the UK, which strip out the impact of new store openings, rose 6.4 per cent.

Revenues in France, where the company has been converting acquired stores into the B&M format, were up 24.9 per cent.

B&M’s figures reinforce recent data showing that many Britons chose to shop at cheaper outlets over the festive period, as high inflation pushed up grocery prices during the cost of living crisis.

The British Retail Consortium said on Wednesday that annual growth of UK food prices hit 13.3 per cent in December — the highest reading since the trade body’s records began in 2005.

Aldi, the hard discounter, earlier this week said its sales during December were 26 per cent higher than 2021.