Shares in B&M have tumbled after the discount retailer reported sliding profits.
The groups chief executive vowed to “correct the operational weaknesses” as the firm warned it expects to report pre-tax earnings of £198m in the six months to end September, a drop of 28 per cent on last year, while UK revenues were up 3.5 per cent to £2.2bn over the period.
B&M has guided a second-half percentage growth rate of between low-single-digit negative and low-single-digit positive levels.
The firm’s shares sunk as much as 17 per cent in early trades on Tuesday, wiping hundreds of millions of pounds from its value. The stock has lost nearly half its value since the start of the year.
Chief executive Tjeerd Jegen said: “While B&M’s value proposition remains strong, our operational execution has been weak. This has impacted our first-half trading performance, and this is reflected in the full-year outlook that we publish today.
“Our response is a decisive plan, ‘Back to B&M Basics’, focused on returning the UK business to sustainable like-for-like growth. This is our absolute priority.“
“We are taking decisive actions to correct the operational weaknesses identified.”
The company’s turnaround plan includes cutting prices across a range of products, rolling out more promotions, and reducing the number of lines of products to save costs.
B&M closed 14 stores in the UK during the period and opened 23 new ones, leading to 9 net new stores.
The firm warned its “back to basics” turnaround plan was expected to take at least 12-18 months “to take effect”.
