B&M Third-Quarter Results – What The Analysts Said

By Steve Wynne-Jones
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B&M Third-Quarter Results – What The Analysts Said

Discount retailer B&M European Value Retail has reported a 22.5% increase in group revenue in its third quarter, which includes the Christmas period, including a 26.6% increase in UK revenues.

"With our combination of exceptional value and convenient Out of Town locations, we are confident that our business model will prove highly relevant to the needs of customers in 2021," commented Simon Arora, B&M's chief executive.

Here's how leading retail analysts viewed its performance.

Russ Mould, AJ Bell

“Value retailer B&M has been a winner during the COVID-19 pandemic whether restrictions have been relatively tighter or looser, and that’s reflected in a big increase in festive sales and the promise of a special dividend for shareholders. This is a rare income good news story for investors.

“On the one hand the discounted goods it offers will be welcomed by increasingly hard-pressed shoppers who are suffering financially in lockdown but on the other hand, unlike the major supermarkets, it doesn’t have an online channel to speak of.


“A reduction in footfall amid stricter stay at home messaging and the fear created by the new more infectious Covid variant could put a dent in sales given B&M doesn’t sell fresh produce and is therefore not somewhere most people could do their entire weekly shop.

“However, during the pandemic B&M won market share and its spacious out-of-town stores in retail parks are likely to continue to appeal to shoppers. The company has mastered the key art of retail – giving people what they want at the right price and at the right time in the right locations.

“This should stand it in good stead as we exit the coronavirus crisis, particularly as its keen prices will appeal in an economy ravaged by the events of the last year.”

Adam Tomlinson, Liberum

"B&M UK LFLs of +21.1% (13 weeks to 26 Dec) continues the very impressive performance since the start of COVID-19 (H1 LFLs +23.0%). Guidance has narrowed to FY21E adj. (pre-IFRS 16) EBITDA of £540m-£570m – a c.2% upgrade. Another special (20p) is the third since March 2020.


"The momentum again reflects the strength of B&M’s discount, general merchandise offer and retail park sites, which leave it primed to benefit during further lockdowns, as well as being a long-term structural winner. We do not see the current valuation (CY21 PER c.16x) as stretching for the momentum being delivered."

Greg Lawless, Shore Capital

"B&M is a well-run company with a clear customer proposition and a growth story centred on further store rollout with a capital light model with a fast payback. The business is well managed with tight stock and cost controls and excellent cash generation reflected in another special dividend recently paid (£250m back to shareholders) and a further £200m being paid now, so £450m returned in total.

"Whilst we acknowledge that B&M has been a strong momentum story during CY2020 we need to look through the FY2022 forecasts and form a fair value model based on a three-year view, which we will do shortly. On the back of continued momentum and the new news of the special dividend the shares should go better, again today."

Amy Higginbotham, GlobalData

“B&M has cemented its position as a clear winner during COVID-19 with another impressive set of results. Its stores remained open during the November lockdown in England, allowing it to absorb ongoing high demand for categories such as DIY and pet care, and capture seasonal spend during the golden quarter.


“Despite the ongoing impact of COVID-19 on physical retail, B&M opened 16 net new stores in the UK during the quarter, bringing its total to 673 with plans to open a further 18 stores during its Q4. That it achieved like-for-like growth of 21.1% in Q3 indicates that its existing stores continue to appeal to shoppers. Its large out of town locations play to its advantage as they allow shoppers and staff to adhere to social distancing guidelines.

“The outlook for B&M is positive with its stores once again remaining open during the third national lockdown while many of its competitors, such as homewares specialists, are forced to close. Its value proposition will also continue to appeal to shoppers amid ongoing economic uncertainty surrounding COVID-19.”

© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine

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