B&M Bargains has doled out a 20p-a-share special dividend to shareholders as well as £30million to its boss Simon Arora after the cheap retailer enjoyed a bumper Christmas..
Arora and his family are the biggest shareholders in B&M, enabling him to pay himself £30million, in addition to a £44million dividend payout revealed two months ago.
B&M will also share some of the profits with staff, and has agreed to pay 30,000 workers an extra week’s wages.
Brothers, let to right, Bobby, Robin, Simon Arora are behind the extraordinary rise of discount store B&M Bargains
All in a year: A chart showing B&M’s share price shifts over the last year
Shares in London-listed B&M are currently down 0.19 per cent or 1p to 529p. A year ago the group’s share price stood at 405p.
The extra 20p-a-share payout will be on top of the special payout of 25p per share and 4.3p ordinary payout, which the retailer said it would dish out at its half-year results in November.
While many retailers up and down the country battle to survive, bosses at B&M said sales in UK stores in the 13 weeks to 26 December grew 26.6 per cent on a like-for-like basis to £1.4billion.
But, the retailer has cut its earnings forecast for the year from between £600million-£650million to £540million-£570million. This is driven by its decision to pay back the sums it received from the Government in rates relief.
In November Mr Arora was forced to defend the company’s first special dividend payout as it came at a time when B&M was benefitting from the business rates holiday announced by Chancellor Rishi Sunak.
Since then, B&M has agreed to hand back over £80million received frim the Government during the pandemic.
In the money: Analyst Russ Mould said B&M has ‘mastered the art of retail’
B&M, which is based in Luxembourg but has its UK head office in Liverpool, opened 18 new stores and closed two during the period, creating 500 new jobs, meaning B&M now has 673 stores across the country.
Russ Mould, investment director at AJ Bell, said: ‘The company has mastered the key art of retail – giving people what they want at the right price and at the right time in the right locations.
‘This should stand it in good stead as we exit the coronavirus crisis, particularly as its keen prices will appeal in an economy ravaged by the events of the last year.’
B&M boss Mr Arora said: ‘Our trading performance is testament to the hard work and commitment of all our colleagues, to whom I express my sincere thanks.
‘The safety and wellbeing of our customers and colleagues has remained our priority during these unprecedented times, whilst we have worked hard to provide customers with the everyday essentials they need.
‘We are awarding some 30,000 store and distribution colleagues an extra week’s wages in recognition of their considerable efforts.’
He added that he remains confident that the business will remain strong in the coming year, despite continued uncertainty on the high street.
B&M’s Heron Foods arm also saw sales grow 7.6 per cent over the period to £102.9million.
Open: B&M has been branded an essential retailer and been able to stay open in the UK throughout the pandemic
But, its division in France, Babou and B&M France, struggled due to lockdowns in the country during November.
Sales across the French arm fell 1.4 per cent due to a four week temporary closure, but remained relatively strong outside of this period.
AJ Bell’s investment director Russ Mould, said: ‘Value retailer B&M has been a winner during the Covid-19 pandemic whether restrictions have been relatively tighter or looser, and that’s reflected in a big increase in festive sales and the promise of a special dividend for shareholders. This is a rare income good news story for investors.
‘Able to stay open through lockdown due to its focus on essential lines such as homewares, food and DIY products, it will be interesting to see if the new, stricter measures in the UK interrupt its momentum.’
Amy Higginbotham, a retail analyst at GlobalData, said tBritain’s lockdown had enabled B&M to thrive. Its low prices appealed to shoppers during the current economic uncertainty while its big out-of-town stores ‘allow shoppers and staff to adhere to social-distancing guidelines,’ she said
B&M has been deemed an essential retailer by the Government and stores will stay open throughout the latest lockdown.
The retailer offers a broad range of products including food and drink, toiletries, cleaning products, DIY tools, medicines, and items for pets. It has over 670 stores across the country.
On Wednesday, B&M confirmed that NHS and care staff will be able to save an extra 10 per cent on their shop at B&M during the latest lockdown.
Sainsbury’s enjoys strong Christmas sales and delivers over 1m orders over crucial festive period
Sainsbury’s, Britain’s second biggest supermarket behind Tesco, has reported a bumper Christmas, with sales up 9.3 per cent for the festive trading period.
More customers bought their food online than ever before, it said.
In the 10 days leading up to Christmas, it delivered 1.1million online orders, twice last year’s number.
‘Many customers had to change their Christmas plans at the last minute and we sold smaller turkeys and more lamb and beef than normal,’ said chief executive Simon Roberts.
Sainsbury’s Christmas trading period covered the nine weeks from 1 November 2020 to 2 January 2021.
Russ Mould, investment director at AJ Bell, said: ‘While many people won’t look back fondly on Christmas 2020, for one business it proved to be a truly memorable experience. Sainsbury’s achieved knockout sales across both food and its general merchandise, with the shift in the market backdrop playing to its strengths.
‘The restrictions for many parts of the country on visiting friends and family meant that a lot more people had to fend for themselves rather than sharing a big meal. That dynamic may well have resulted in a greater number of smaller-sized items being sold.
‘A strong reputation for providing decent premium-range items also worked in favour with good sales of Taste the Difference products, showing that the supermarket game isn’t always about having the cheapest possible price.’
Shares in Sainsbury’s are up 3.96 per cent or 9.20p to 241.70p. A year ago, the share price was 231.00p.
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