B&M boss funnels £44m offshore as bargain retailer emerges as one of the pandemic’s biggest winners
B&M Bargains’ billionaire chief executive has funnelled £44million in dividends to his offshore family trust after emerging as one of the biggest winners from the coronavirus crisis.
The budget retailer handed out £204.1million of ‘surplus’ cash to shareholders after reporting booming sales during the pandemic.
The FTSE 100 discounter has raced ahead of its rivals thanks to its large out-of-town stores and the fact it has opened through the lockdowns.
Lockdown winner: Budget retailer B&M Bargains handed out £204.1m of ‘surplus’ cash to shareholders after reporting booming sales during the pandemic.
Shoppers have rushed to buy cheap products for DIY, gardening and their pets, as they increasingly look to discounters to help cut their spending as recession bites.
B&M’s sales in the six months to September 26 jumped 25.3 per cent to £2.2billion, up from £1.7billion a year ago, and pre-tax profits soared 122.4 per cent to £235.6million.
Sales in its UK stores increased 29.5 per cent.
The company was bought in 2004 by Cambridge law graduate Simon Arora, and his two brothers, who turned the small loss-making chain into a £5billion giant with 1,000 stores.
Yesterday they paid out a £250million special dividend, or 25p per share, on top of an increased 4.3p per-share interim dividend.
Arora, 51, will receive £37.5million from the special dividend and a further £6.4million from the interim payout.
The family has also offloaded £910million of shares since they took the company public in 2014.
Arora and his brother Bobby retain a 15 per cent stake worth £744million, held in an investment firm based in Luxembourg.
Robert Palmer, executive director of Tax Justice UK, said: ‘People and companies who are really struggling will look at the tens of millions disappearing offshore, while the company is getting massive government subsidies, and feel something doesn’t add up. It goes against the claim that we’re all in this together.’
Labour’s Darren Jones, chairman of the business select committee, told the Times that B&M was ‘another example of businesses who have done well during Covid cashing in on public funds’.
The discounter benefited from a business rates holiday aimed at struggling retailers, pubs and restaurants, to the tune of £38million.
B&M said the rates holiday savings were ‘substantially offset’ by the costs of making stores Covid-secure.
The discounter also repaid £3.7million of cash claimed under the Government’s furlough scheme and created 1,800 jobs in the first half.
B&M’s shares fell 1.1 per cent, or 5.4p, to 496p, compared to a price of 405.5p at the start of the year.
Burberry profits dive by two thirds
Burberry’s sales fell 31 per centto £878m in the six months to September 26
Burbbery’s profits plunged by almost two thirds in the first half because of shop closures and the collapse in international tourism.
Bosses at the luxury retailer said its UK business was facing a triple threat from the pandemic, Brexit and the removal of tax-free shopping for foreign visitors, which comes into force on January 1.
Many of its shoppers in the UK claim back VAT before travelling home and many will shift their spending to rival European capitals if the Chancellor goes ahead with the change.
Burberry’s sales fell 31 per cent to £878million in the six months to September 26, pushing profits down from £193million to £73million.
Store closures led to a 45 per cent collapse in sales between April and June compared to the same quarter last year.
But its global reach allowed it to recover in the second quarter, so that sales were down just 6 per centcompared to the same period last year.
A sluggish return to international travel hit the firm, with the proportion of sales coming from tourists falling to just 4 per cent from 28 per cent in the first half of last year.
Strong sales growth in China, Korea and the US meant overall revenues were actually up year-on-year in October – a significant milestone in the firm’s recovery.
Despite the tough half Burberry said it would reduce promotions to protect the ‘long-term’ strength of the brand.
Founded in 1856, it has targeted younger, digitally savvy customers with campaigns fronted by model Kendall Jenner and footballer Marcus Rashford.
Online sales have more than doubled in some regions in the last three months.