The discount retailer has put out a surprise update
B&M has issued an announcement after a huge error. The accounting blunder comes as a major figure at the firm said he was stepping down.
The discount chain said the error was connected to an operating system upgrade earlier this year, according to PA. It led to £7million of overseas freight costs being wrongly recorded in their accounts.
In its most recent announcement, the budget retailer has revised its earnings and profit projections. B&M bosses also confirmed plans to initiate a full-scale independent investigation into the multimillion pound mishap. The news came alongside the shock revelation that the company’s chief financial officer, Mike Schmidt, intends to leave his position.
He will remain in post until a replacement finance chief is found, with the recruitment process now under way. In a brief statement on Monday, B&M said: “The board wishes Mike well for the future.”
Following the accounting blunder, the retailer informed investors that, although the underlying problem had been fixed, the multimillion-pound mistake would still impact its financial results this year.
Adjusted earnings for the six months to September are expected to have been approximately £191 million, down from its earlier forecast of £198 million.
B&M said group adjusted earnings are now projected to fall between £470 million and £520 million for the financial year, having previously indicated a range of between £510 million and £560 million. However, the group still anticipates like-for-like sales growth over the second half of the year to be “between low-single-digit negative and low-single-digit positive levels”.
This latest update comes just a fortnight after B&M cited rising costs and a dip in sales as it issued a profit warning. It reported a 1.1% drop in UK sales for the second quarter of the year, which was worse than anticipated.
The bargain high street shop also revealed that a £30million increase in wage costs was impacting results. As well as a £14million hit in packaging taxes.
In response to these challenges, B&M has initiated a series of measures to boost performance, such as reducing prices of some of its key value items.
The group’s chief executive, Tjeerd Jegen, stated in early October that the company had slashed prices and was working to refocus its ranges, improve on-shelf availability and “bring back excitement to our stores” according to The Guardian.