Sales dampen spirits at cheap and cheerful B&M

Budget retailer B&M left shareholders feeling glum as it revealed uK sales were flat in the six months to September.

Investors expected stellar results from the cheap and cheerful chain, which sells everything from wallpaper to pet food, amid signs that consumers are increasingly shifting towards value stores.

the disappointing figures were partly due to the timing of easter. Normally there is a bank holiday boost to sales, but this year it fell too early to be included in the results. But even adjusting for this timing, like-for-like sales barely managed to edge up.

Shares slipped 7.6pc, or 30.6p, to 374.4p. Chief executive Simon Arora seemed unconcerned. Profits rose by 32.5pc to £115m and overall group revenues climbed 16.1pc to £1.6bn.

the firm opened 22 stores over the six months, and is on track to take that to at least 58 by the end of the financial year.

Arora said: ‘We are well placed to prosper in a difficult and uncertain retail environment.’ Analysts at Liberum looked kindly on the results, saying that B&M’s profit margin was particularly healthy.

this was helped by sales of gardening equipment because of the heatwave this summer. It sold out fast at full price rather than hanging around to be discounted.

But after the acquisition of French discount retailer Babou earlier this year, Liberum added B&M has ‘yet to prove it can be successful internationally’.

First Group, which operates the uK’s great Western Railway, South Western Railway and the transpennine express, soared as it brought in a boss.

Matthew gregory, the firm’s former finance head, appeared to go down well with City traders as the shares climbed 10.4pc, or 8.3p, to 87.95p.

But first-half results, for the six months to September, were still a mixed bag. though revenue climbed 19.2pc to £3.3bn, losses widened from £1.9m last year to £4.6m.

the rail division dragged numbers down, as First group said South Western in particular was experiencing reliability issues.

A shake-up at greyhound, Firstgroup’s American coach operator, was also putting pressure on profits. the firm has now withdrawn from western Canada, where it was struggling to make ends meet, but it is investing in refurbishing its buses and improving its services. Melrose Industries, the engineering investor which bought FtSe100 firm gKN earlier this year, impressed the City as it provided an update on the business.

the aerospace and powder metallurgy units – where metals are made into fine powders and pressed to form objects – saw revenues pick up by 6pc and 9pc respectively. However, its automotive division, which specialises in electric car systems, stayed flat. Melrose said it was confident that improvements were achievable, and shares climbed 7.4pc, or 12.2p, to 177.1p.

they remain 23.3pc lower than when the firm acquired gKN, at the end of March. Melrose helped the blue-chip

FTSE 100 end the day fractionally higher, up 0.01pc, or 0.68 points, at 7053.76 points.

Losses from oil heavyweights BP and Shell squeezed the blue-chip index, as a warning from President trump that the price of crude should be lower caused oil to resume its decline.

BP fell 2.8pc, or 14.6p, to 513.5p, while Shell slipped 2.2pc, or 54p, to 2377.5p.

On the FtSe250, cancer drug company BTG shot up 10.7pc, or 64p, to 660p on the back of decent six-month profit and revenue figures. Product sales were up 10pc to £261m, total revenues climbed 12pc to £380.3m and profits soared 35pc to £136.9m.