B&M European Value Retail guided higher for full-year operating profits following a “strong” start to the second half, even as it said that it would return the government’s approximately £80m of full-year business rates relief for the firm.
Nonetheless, the variety goods retailer also called on authorities to create “a level playing field” so that all essential and online retailers contribute proportionately as regards taxation and business rates.
The company emphasised the disproportionate burden placed on physical stores versus their digital rivals, especially given the uncertainty around Covid-19 lockdowns and their duration.
B&M chief, Simon Arora, also requested an urgent reform of what he termed the “outdated” business rates system, arguing that it was forcing increased job losses across the sector and keeping both his company and other potential occupiers from taking up vacant space in many locations.
In a statement issued just before the close of trading in London, the outfit also said it would continue to evaluate its ability to return any surplus cash to shareholders, as per its capital allocation policy.
Over the first nine weeks of the third quarter, the company had observed a “steadily” improving customer count and like-for-like sales growth was ahead of that seen in the first half – but was expected to moderate until financial year on 27 March 2021.
Full-year earnings before interest, taxes, depreciation and amortisation meanwhile were pegged to come in at between £600-650m, against an analyst consensus provided by B&M of £571m.
That guidance excluded the impact from any voluntary payment of business rates.
The company also said that “significant uncertainty” remained, but that it was still well placed to continue growing profitably in the UK “while developing its proposition in France”.
Stock in B&M European Value Retail finished the session down 0.69% at 474.7p.
