Shares in B&M European Value Retail (BME) have soared 8.5% after the discount chain recorded its best ever Christmas.
Group revenues for the quarter increased 22% to £789.1m, including the German business Jawoll. In the UK, B&M reported a 20.7% sales rise to £741.4m for the 13 weeks to 24 December, with like-for-like growth of 7.2%.
The stronger like-for-like growth reflected strong seasonal product performance, improved in-store standards for customers, the normalisation of service levels from two new distribution centres and an extra day of trade (adding 1.1% to LfL figure), the group said in a trading update.
Jawoll revenues also increased by 18.8% on a euro basis, equating to a 43.2% jump in sterling to £47.7m versus the same period a year ago.
CEO Simon Arora said: “I’m delighted to report that B&M has delivered a strong performance through peak trading, reflecting a powerful return to trading form, helped by increased levels of operational stability in our stores and supply chain.”
B&M, which is chaired by former Tesco boss Sir Terry Leahy, has a 533-strong store portfolio in the UK, opening 14 shops in the past 13 weeks and a net 34 in total during the financial year to date. Jawoll is trading from 73 stores having opened seven in the third quarter.
“We have once again demonstrated the strength, relative appeal and popularity of our model at a time of uncertainty for consumers generally and continuing structural change in the retailing sector,” Arora added.
“We have delivered our best ever Christmas trading and served over 5.5 million customers in a single week in the UK alone as we continue to gain market share. Our German business Jawoll has also performed well and our first steps towards a faster pace of expansion are going to plan.”
B&M was confident it would meet market expectations for adjusted EBITDA in the financial year to March 2017.
Jonathan Pritchard at Peel Hunt said B&M was in a strong position heading into 2017 as consumer uncertainty would play into the hands of discounters.
“We do not see any reason why B&M wouldn’t continue to win lots of market share, across retail and within the discount sector, and pleasingly, the upbeat rhetoric on margins going forward is retained,” the retail analyst said.
“Here is a business with serious momentum, in the right part of the retail sector with strong management and an overseas plan.”