B&M European Value declares ritzy divi as rapid expansion rolls on

B&M European Value Retail, the discounter chaired by Sir Terry Leahy, declared a special dividend as it posted final results showing strong sales, profits and cash generation.

The FTSE 250 group, which floated almost two years ago, opened a record 79 UK stores in the UK and six Jawoll stores in Germany in the 52 weeks to 26 March, helping lift revenues increased by 23.6% to £2.04bn.

UK like-for-like sales crept only 0.3% higher, down from 2015's rate of 4.4% due in small part to deflationary pressures on grocery sales, but more importantly from cannibalisation from the store opening programme.

There were 499 stores in the UK by the year end, with a pipeline of 50 UK B&M stores period and 19 Jawoll outlets as management look to accelerate the pace of growth for the German chain acquired in 2014.

Leahy, who led a surge of store expansion as boss of Tesco's between 1997 and 2011, and chief executive Simon Arora reiterated their believe there is potential for at least 350 more B&M stores in the UK.

Although like-for-like growth slowed, adjusted group EBITDA increased by 16.2% to £202.5m and adjusted profit before tax jumped 19.5% to £161.4m, with adjusted diluted earnings per share 26% higher at 13.0p.

With strong operating cashflow of £170.9m, up 12% on the prior year, the board hiked the final dividend 41% to 3.2p per share to be paid in August and declared a special dividend of 10.0p per share to be paid in July.

"B&M has delivered another year of strong progress with the implementation of our strategy for growth and an excellent financial performance in terms of overall sales, profits and cash generation," Leahy said.

"Our expansion strategy is on track to deliver further growth during the year ahead in our chosen markets."