B&M shares ditched as troubles in Germany take big toll on profits

Shares in bargain chain B&M dived today after it admitted profits had fallen, dragged down by its struggling German arm.

The retailer of everything from Henry vacuum cleaners to Harry Potter branded headphones reported a 2.8% fall in first-half profits to £96 million. Investors sold off the stock, down 27p or 7% at 350.8p.

That was despite sales at the chain, which has 645 stores, rising 12.4% to £1.8 billion and same-store sales growing 3.7% in the UK. Chief executive Simon Arora said: “We’re in the same fast lane that Aldi, Lidl, Primark are in.” He added there is now “no embarrassment” in shopping at budget stores.

B&M bought its German business, Jawoll, for e80 million in 2014 and the division has slipped into the red. Arora has kicked off a “strategic review” of Jawoll but said this doesn’t necessarily mean it will be sold. Investec analysts said “We still argue there is a credible route to return Jawoll to satisfactory profitability.”

Arora said the timing of the December election is “deeply unhelpful” and called on the next government to tackle business rates.

He said: “It can’t be right that UK retail, which employs so many people, is paying a disproportionate share of business rates and that does need urgent review.”