B&M profits rise but UK sales held back after rush for garden products
July and August were weaker as the retailer ran low on heatwave-friendly gear.
Profits at bargain retailer B&M rose by more than 30% in the first half of the year, but underlying revenue was held back in the UK as it ran out of garden products early in the summer.
Like-for-like sales in the first half grew 0.9% in the UK business, with a slowdown in July and August after most of the gardening and outdoor gear was snapped up earlier in the period.
The lack of products also limited its August end-of-season sale. But comparable sales returned to growth in September with the arrival of new ranges.
Profit before tax jumped by 32.5% to £115 million, while overall group revenues were 16.1% higher at £1.56 billion.
The German business Jawoll notched up 4.1% growth in revenue as it opened two new stores, but margins were reduced by clearance sales on old stock.
Last month, B&M acquired French retailer Babou, which has 95 stores.
Chief executive Simon Arora said the company was now well placed to “expand B&M’s disruptive, value-led model in Europe’s three largest consumer markets”.
“With the core B&M UK business having had a record half year performance, we are well placed to prosper in a difficult and uncertain retail environment,” he said.
Shares in B&M were trading 7% lower at lunchtime on Tuesday.
Analysts at Liberum said the company was well-positioned for a strong full year, but that there was room for improvement in its overseas businesses.
“The group has yet to prove it can be successful internationally, with work still to do in Germany. We look forward to more details on Babou, which looks to be a good opportunity, but is not without risk.”