Discount retailer B&M aims to accelerate expansion after more than doubling profits last year with sales of DIY kits, gardening and housewares booming as its stores remained open throughout the lockdown.
Sales at its established UK stores grew 30% in the year to March 27, helping to boost pre-tax profit by 108% to £ 525.4million.
Total sales rose 26% to £ 4.8 billion, as the group’s Heron Foods frozen grocery chain increased sales by more than 6%, while its Babou group’s sales in France increased by ‘a little more than 9% despite 10 weeks of closure.
B&M, which had essential status as it sells food and equipment, said its top-selling items were non-food items, including crafts, garden kits, toys and Christmas items. ‘last year.
Simon Arora, managing director, said the group has attracted new buyers, including affluent middle-income families, as it improved the design of its products and benefited from its status as a “core” retailer allowing it to trade while many other stores remained closed.
“Last year was exceptional. Our results reflect the speed with which we have responded to the challenges presented by Covid-19, ”he said.
The company, which was promoted to the FTSE 100 last year, has confirmed plans to open 45 new B&M stores in the coming year, but will also open 15 new Heron Foods stores. It renames all Babou points of sale to B&M by the end of 2021.
In the long run, the group expected to have 950 B&M stores, up from 681 currently, but Arora said the pandemic’s effect on rival retailers “could present attractive new opportunities.” B & M’s strong performance during the year made the target of 950 “increasingly look like a conservative estimate”.
Arora said out-of-town stores and B & M’s low-budget product lines meant it was in a good position to do well after Covid, but he said sales were likely to slow. Sales are down 1% in the nine weeks since the end of March, compared to the same period in 2020.
“Looking ahead, there are many uncertainties as the company slowly emerges from foreclosure and business patterns are likely to be unpredictable for much of the year,” Arora said. “Within our UK business, we will face the strong benchmarks from last year.”
Arora, the group’s highest-paid director, saw a 66% pay rise to £ 1.78million, according to accounts released Thursday, while the group said it was increasing its final dividend from the year, payable this summer, by 141% to £ 130million. This brings the total dividend payments for the year to £ 697million.
The group has reimbursed the government £ 80million in trade tariff relief and £ 3.7million in paid leave.
However, B&M employees did not enjoy the same level of bonuses as most of their supermarket counterparts.
Most large supermarkets paid staff bonuses for several months last year in recognition of their extra work during the pandemic. B&M workers only received one 10% monthly bonus in April of last year and an additional week’s pay in January of this year.