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B&M confirms floatation plans

A fast-growing Speke-based discount retailer has confirmed plans to float on the London Stock Exchange within the next few months.

Currently owned by the Arora family and a private equity investor, B&M Retail wants to raise fresh capital to fund a massive expansion plan that could see it operating around 850 stores throughout the UK.

City analysts expect the stock market flotation to value the company’s shares at more than £2bn.

According to financial details published by the company yesterday, B&M Retail, which trades as B&M Bargains, has seen its revenue rise sharply from £764m two years ago to almost £1.3bn by March this year.

It represents growth of 29% per year.

Its underlying profits have risen at an annual rate of 39% over the same period to reach £130m last year.

Company chief executive Simon Arora said: “B&M comes to the market with a strong track record of growth in revenues, profits and cashflow and has a proven business model that offers customers sensational value.

“We have built a high-growth retailer which customers love and which has so much potential still to be realised – approximately 66% of the population does not have easy access to a B&M store and we believe there is room for around 850 stores across the UK.

“Over recent years the UK has witnessed a sustained structural shift towards value retailing among consumers. Shopping habits have changed permanently as a result, with B&M completing about 2.7m transactions a week. As the success of Aldi and Primark demonstrates, everyone loves a bargain.

“By leveraging a lean, cost-efficient business model, with strong supplier relationships and direct sourcing, we give our loyal customers what they are looking for across a range of different price points and categories.

“We sell everything from leading brand tea-bags through to £100 garden patio sets, all at sensational prices. Our shoppers know that when they shop at B&M, they will be saving money, and that is reflected in the record Easter sales we have just enjoyed.

“The team are very excited by the opportunity to grow the business even further, both in the UK and in Germany, following our recent acquisition of a majority stake in JA Woll, a transaction that presents significant opportunities particularly in sourcing, and meaningful roll-out potential.”

The Arora family and private equity investor Clayton Dubilier & Rice are expected to retain the majority of their shareholdings after the flotation with around 20% of the shares being made available to new investors.

The company’s chairman is Liverpool-born former Tesco chief executive Sir Terry Leahy.

Source : Bill Gleeson - Liverpool Echo

22 May 2014
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