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- B&M’s latest trading update showed increasingly value-conscious shoppers are flocking to the discounter, with its UK like-for-like sales up 6.5% year on year over the Christmas quarter and total revenue up 12.3%.
- Price hikes to counteract inflationary pressures will account for a good deal of that growth, but it was good to see management also note an increase in gross margins, which suggests good news further down the income statement given B&M’s traditionally tight controls over operating costs.
- It’s tough to predict how consumer spending will hold up in the quarters ahead, but B&M’s focus on providing value for money that has served it well in previous economic downturns should provide some solace to investors in these turbulent times.
- The company’s trailing 16.5p ordinary dividend equates to a hearty 3.7% yield at present. But add in the additional 20p per share special payout due in February and that yield jumps to 8.1%. Now, investors shouldn’t count on special dividends continuing to be an annual occurrence, but B&M’s board remains committed to returning excess cash to shareholders when they deem leverage has fallen too low.