B&M profits above guidance mid-point after solid Q4

Discount retailer     has said that adjusted operating profits should be above the mid-point of its guidance range for the year ended 29 March on the back of productivity gains and a pick-up in underlying sales growth in the fourth quarter. 
Guidance for adjusted EBITDA was cut in February to £605m-625m, down from an earlier forecast of £620m-650m.

Full-year group revenues totalled £5.6bn, up 3.7% on the year before as the impact of a 5% increase in store numbers and positive like-for-like sales in France (+2.6%) offset falling LFL sales in B&M UK (-3.1%) and the Heron Foods division.

At B&M UK, which accounts for around four fifths of group sales, headline sales increased by 5.4% in the fourth quarter, picking up from the 2.8% growth seen in the third.

Sales still fell on an underlying basis, as positive general merchandise sales - helped by the garden, toys, paint and stationery categories - were outweighed by a weaker performance in FMCG, but the LFL decline eased to -1.8% from -2.8%.

Operating costs at B&M UK rose by 6% over the year, as new store growth, greater volumes and higher wage rates "have been partly mitigated by productivity gains", the company said.

B&M, which announced in February that chief executive Alex Russo would be stepping down at the end of this month, said it is making progress on its CEO succession plans and will make an announcement "in the coming weeks".