B&M to hand out a special dividend after healthy Christmas performance

B&M intends to pay shareholders a special dividend following strong sales growth across the Autumn and Christmas seasons.

The discount retailer said it would hand investors a 20 pence per share dividend in precisely a month as it revealed revenue grew by 5 per cent to £1.65billion in the 13 weeks ending 23 December.

Turnover in the UK, where the firm derives most of its trade, rose by 3.7 per cent to £1.35billion, while sales expanded by over 11 per cent in its French and Heron Foods divisions.

Cost-of-living pressures have provided a boon for bargain retailers like B&M, which sells everything from electrical goods to furniture, clothing and beauty products.

Following the result, the group has upheld its annual guidance for adjusted earnings before nasties of £620million to £630million for the 2024 financial year.

B&M also said it was on track to open another 76 outlets during the period, including 45 in the UK and 20 Heron Foods stores.

After Wilko’s collapse last summer, B&M snapped up 51 of the homeware chain’s stores from administrators in a £13million deal.

Then, in November, B&M said it expected to launch at least 125 more shops across the UK over the coming three years.

At the same time, the FTSE 100 business expanded its long-term domestic store target from 950 to 1,200.

The Liverpool-based company operates around 717 UK shops under the B&M brand, as well as 122 French outlets and more than 330 stores under the ‘Heron Foods’ and ‘B&M Express’ names.

Alex Russo, B&M’s chief executive, said: ‘Our strategy remains unchanged – we are an everyday low-price discounter with a laser-focus in keeping excellence in retail standards and our costs the lowest.

‘This allows us to provide our products at the best price to all customers – many of whom continue to face significant cost-of-living pressures.’

Despite the impressive results, B&M European Value Retail shares were 0.85 per cent lower at 556.4p on Tuesday morning, although they have still grown by around a quarter over the past 12 months.

B&M’s results come in a week where numerous retail giants are due to report their festive trading figures, with Greggs and Sainsbury’s releasing their results tomorrow and Tesco and Marks & Spencer following the day after.

But even if they publish impressive results, the coming months could be challenging for them, according to Victoria Scholar, head of investment at Interactive Investor.

She said: ‘With concerns about higher interest rates and the risk of a UK recession, the consumer strain may be starting to have a broader impact, affecting retailers even at the value end of the spectrum.

‘While the Golden Quarter is typically the strongest, most significant period for retail, the post-Christmas lull and the confluence of macroeconomic pressures this January and February are likely to be quite painful.’