Budget retailer B&M suffered a sharp drop in UK sales as a pandemic-induced boom showed signs of slowing following the end of lockdown.
For the six months to September 25, the business’s UK revenues were down 5 per cent year-on-year on a like-for-like basis. Although overall revenues rose 1.2 per cent to £2.3billion.
Profits fell 6.2 per cent to £238million. B&M was facing a tough set of comparatives from last year when lockdown allowed it to stay open as an essential retailer and take advantage of a surge in consumer demand for its low-cost products.
Sales slump: B&M revenues were down 5% year-on-year on a like-for-like basis. Although overall revenues rose 1.2% to £2.3bn
The group also warned that the opening of five new stores may be delayed until next year, while its Heron Foods business, which focuses primarily on frozen food, was facing ‘more challenging trading conditions’ as grocery shopping levels normalised following the end of lockdown.
Shares fell 5.6 percent, or 36p to 607.8p due to concerns that sales momentum might be stalling.
Despite the slowdown in sales, B&M said it had ‘good stock availability’ heading into the peak Christmas trading season, having ordered its festive stock earlier than normal due to the disruption in global supply chains.
Synairgen Stock Watch
After the company recruited patients from 17 different countries to participate in the last stage of the Covid-19 treatment, Synairgen’s shares rose.
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Data from the trial is expected in early 2022, with Synairgen – founded by professors Sir Stephen Holgate, Donna Davies and Ratko Djukanovic – planning to apply for the treatment to receive Emergency Use Authorisation from the US Food and Drug Administration (FDA).
The shares bounced by 5.2 percent, or 9p to 191.1p.
‘We have responded decisively to supply chain challenges by leveraging our strong supplier relationships and we have improved in-store execution.
As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges,’ said chief executive Simon Arora.
The results also found support from analysts at Peel Hunt, who said they were ‘highly impressive against such a tough comparative’.
‘We have learned to expect brilliance from B&M, and should not be disappointed when trading is only “good”, but the market does not work like that,’ the broker added yesterday.
The FTSE 100 rose 0.6%, or 44.03 point, to 7384.18, while the FTSE 250 rose 0.6%, or 140.80 point, to 23574.05.
This means that the blue-chip index now stands at 7,400. It was last there in February 2020, just before global markets plunged.
The slowdown in UK economy growth was felt by traders, who seemed to ignore it. This is due to rising prices and supply chain disruptions. Also, stocks found support in weakness in the Pound which has fallen to its lowest levels so far this year.
Anglo American saw miners in high demand as it rose 5.9% or 160.5p (to 2897p) Glencore rose 4.1%, or 14.65p to 370p. Rio Tinto gained 3.4%, or 152.5p to 4597p. BHP rose 3.9%, or 77.5p to 1975p.
An increase in gold prices helped precious metal diggers. Polymetal surged 4.1% or 60p at 1509p and Fresnillo rebounded 2.7% or 25.4p at 984.6p.
Endeavour, an Endeavour mid-cap gold miner, saw its price rise by 3.5 percentage points, or 70p to 2100p. The firm had forecast that Endeavour would exceed production guidance for 2021.
According to the company, it has already produced 1.36m ounces this year of gold. This puts it well in its position to exceed full-year forecasts of 1.5m to 1.5m.
Blue-chip investment firm 3i Group was lifted 4.7 per cent, or 63.5p, to 1429p after profits shot up in the six months to the end of September to £2.2billion from £1.26billion in the same period a year ago.
The profit surge followed strong returns from the group’s private equity portfolio, which posted an investment return of £2.4billion in the period, up 27 per cent year-on-year.
It wasn’t all good news, however, with 3i finance director Julia Wilson announcing plans to retire after the company’s AGM next June.
Qinetiq, a defense firm, fell 2.8p to 267.2p following earnings being affected by supply chain and technical issues in one of its projects.
Profits for the six months to the end of September stood at £53.4million, down from £69million in the same period last year, which was attributed to a £14.5million writedown on the contract.