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(Alliance News) - Discount store chain B&M European Value Retail on Thursday confirmed itself as a lockdown winner, with annual results showing its stellar run continued in recent months.
B&M said it experienced an exceptional year as customers flocked to the popular discount retailer during stringent restrictions brought about by the Covid-19 pandemic.
B&M's business offers an assortment of branded food, non-perishable grocery, and general merchandise products, all sold at low prices.
In the UK, the Luxembourg-based company was allowed to trade through lockdowns as it was classified as an essential retailer.
For the financial year ended March 27, revenue was up 26% to GBP4.80 billion from GBP3.81 billion the year before and pretax profit doubled to GBP525.4 million from GBP252.0 million.
In addition, adjusted earnings before interest, tax, depreciation and amortisation increased by 83% to GBP626.4 million from GBP342.3 million. In March, B&M had guided for adjusted Ebitda to be in the range of GBP590 million to GBP620 million.
The company said the B&M UK business experienced very strong sales in the last month of the financial year, with the final week being the strongest in its history which led to the Ebitda outperformance. Like-for-like revenue growth picked up from 23.0% in the first half of the year to 24.5% in the second half.
B&M declared a total dividend of 17.3 pence, more than doubled from 8.1p paid out the year before. The ordinary dividend was slightly above expectations and was in addition to GBP450 million special dividends paid in financial 2021.
Chief Executive Officer Simon Arora said: "Looking ahead, there are many uncertainties as society slowly emerges from lockdown and trading patterns are likely to be unpredictable for much of the year. Within our UK business, we will be up against the strong comparatives from last year but we remain confident that the B&M customer proposition, with its modern network of predominantly out-of-town stores and value-led variety offer, will prove highly relevant to the needs of shoppers. As such, we are well positioned to support the communities in which we trade, retain the loyalty of new customers, and to continue our store roll-out strategy."
B&M shares were down 3.8% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 7,079.07
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Hang Seng: down 1.2% at 28,943.90
Nikkei 225: closed up 0.4% at 29,058.11
DJIA: closed up 25.07 points, or 0.1%, at 34,600.38
S&P 500: closed up 0.1% at 4,208.12
Nasdaq Composite: closed up 0.1% at 13,756.33
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EUR: down at USD1.2185 (USD1.2214)
GBP: down at USD1.4150 (USD1.4182)
USD: up at JPY109.80 ((JPY109.61)
Gold: down at USD1,896.85 per ounce (USD1,904.77)
Oil (Brent): up at USD71.76 a barrel (USD70.96)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
0955 CEST Germany services purchasing managers' index
1000 CEST EU services PMI
0930 BST UK CIPS-Markit services PMI
0815 EDT US ADP national employment report
0830 EDT US unemployment insurance weekly claims report - initial claims
0945 EDT US services PMI
1000 EDT US ISM report on business services PMI
1030 EDT US EIA weekly natural gas storage report
1100 EDT US EIA weekly petroleum status report
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The Chinese services sector saw softer expansion in May as it continued its trend of growth for the thirteenth consecutive month, data from IHS Markit showed. The headline seasonally adjusted general services purchasing managers' index slipped to 55.1 in May from April's four-month high of 56.3, but remained firmly above the neutral 50.0 level to signal a marked increase in activity. The reading has stayed above the 50.0 point mark for 13 consecutive months now. The general composite purchasing managers' index fell to 53.8 in May from 54.7 in April.
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The Japanese services sector contracted sharply in May as tighter restrictions weighed on output and demand, according to survey results reported by IHS Markit. The seasonally adjusted Japan services business activity index fell sharply to 46.5 in May, from 49.5 in April. "The latest reduction was solid and the sharpest recorded since February as tighter restrictions weighed on output," Markit said. The au Jibun Bank Japan composite purchasing managers' index - which measures combined output in the manufacturing and service sectors – fell to 48.8 in May from 51.0 in April, highlighting a renewed fall in private sector output. The decline was marginal, yet the quickest since February, Markit noted.
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Ireland's service sector saw strong growth in May as pent-up demand was unleashed after Covid-19 restrictions were lightened, data from IHS Markit showed. The services business activity index increased sharply for the fourth successive month to 62.1 in May from to 57.7 in April. The pace of expansion was the strongest since March 2016, IHS Markit said, and noted the index has trended at 54.8 since its inception in May 2000. The composite index rose to 63.5 in May from 58.1 in April - the fastest rate of growth since the series began in May 2000.
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BROKER RATING CHANGES
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DEUTSCHE BANK CUTS BT GROUP TO 'SELL' ('HOLD') - TARGET 140 PENCE
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BERENBERG CUTS INTERTEK TO 'HOLD' ('BUY') - TARGET 6,250 (6,450) PENCE
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RBC CUTS EXPERIAN TO 'UNDERPERFORM' (SECTOR PERFORM) - TARGET 2,400 (2,900) PENCE
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COMPANIES - FTSE 100
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Informa said trading was in line with expectations. The business publisher and exhibitions firm said that, following the release of its annual results in April, it has continued to trade in line with expectations. Informa said it remains on track to deliver the baseline revenue target for the year of at least GBP1.7 billion, as well as remaining cashflow positive, supported by improving underlying revenue growth in its two subscriptions-led businesses. CEO Stephen Carter said: "Further strength in Informa's subscriptions-led businesses and measured confidence in the progressive return of physical events in Mainland China, North America and the Middle East, is delivering further stability and security. "We remain on track to deliver our revenue commitments through the 2021 transition year, whilst continuing to generate positive cashflow. Improving growth in subscriptions, ongoing expansion in Digital Services and the enduring strength of our B2B brands and platforms, gives us increasing confidence in revitalisation and growth through 2022 to 2024."
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FTSE Russell announced the latest index review changes after the London close on Wednesday with Renishaw relegated from the FTSE 100 and replaced by ITV. The changes will take effect from the market open on Monday, June 21
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COMPANIES - FTSE 250
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Exeter-based water utility Pennon Group rewarded shareholders with a special payout as it acquired its neighbour, Bristol Water. Pennon also announced plans for a share buyback and a share consolidation, as it reported annual results. For the financial year to March 31, the utility posted revenue of GBP644.6 million, up 1.2% from GBP636.7 million the year before, but pretax profit was GBP132.1 million, down 32% from GBP193.1 million. In addition, Pennon said it has acquired Bristol Water Holdings for an equity value of GBP425 million and enterprise value of GBP814 million from iCon Infrastructure and Itochu. Pennon also announced a return of capital to shareholders, consisting of a special dividend of GBP1.5 billion - representing 355 pence per share - and a share buy-back programme of up to GBP0.4 billion. As part of the special dividend, Pennon intends to consolidate its share capital on the basis of two new shares for every three existing shares. Pennon declared a final dividend 14.97p, leading to an annual dividend of 21.74p, down from 43.77p. Pennon said the special dividend equates to GBP3.55 per share after the share consolidation, while the final dividend will equate to 22.46p and the full-year dividend 32.61p. Pennon also said it expects to increase its dividend base by 2.00p per share in financial 2022 to recognise the earnings accretion of the Bristol Water acquisition. Chief Executive Susan Davy said: "This has been a pivotal year for the group as we have repositioned Pennon to focus on driving sustainable growth in the UK water sector, building stability for the longer term, and recognising ongoing shareholder loyalty."
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In the FTSE Russell quarterly review, Moonpig Group, Trustpilot, Trustpilot and Spire Healthcare were added to the FTSE 250 at the expense of Sabre Insurance, Provident Financial, Foresight Solar Fund and JLEN Environmental Assets.
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COMPANIES - MAIN MARKET AND AIM
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Lekoil said it has fired Olalekan Akinyanmi as CEO, effective immediately, due to a "corporate governance breach". The oil and gas explorer and producer in Nigeria and elsewhere in West Africa said it will start proceedings to recover the USD1.5 million outstanding balance of a loan to Akinyanmi. Anthony Hawkins will be interim executive chair while Lekoil searches for a new CEO. The stock was down 7.9% early Thursday.
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Thursday's Shareholder Meetings
Camellia PLC - AGM
CentralNic Group PLC - AGM
Checkit PLC - AGM
Destiny Pharma PLC - AGM
Flowtech Fluidpower PLC - AGM
i3 Energy PLC - GM re share capital reduction
Informa PLC - AGM
Kazera Global PLC - AGM
Menhaden PLC - AGM
Michelmersh Brick Holdings PLC - AGM
NetScientific PLC - AGM
PageGroup PLC - AGM
Pebble Group PLC - AGM
Tissue Regenix Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
