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Usually, if a company announces a profit warning and the departure of its chief executive in the same statement, it can expect a more extreme reaction than the 2 per cent share price decline experienced by B&M European Value Retail late last month.
In B&M’s case, however, the bad news had been priced in — its shares fell by 9 per cent in January when it revealed like-for-like sales over Christmas had declined for the third quarter in a row.
Outgoing chief executive Alex Russo could point to a 50 per cent increase in B&M’s revenue since 2020, but the recent rise has been driven by a busy store opening programme.
Broker Wayne Brown of Panmure Liberum Brown argues that B&M’s valuation remains “highly undemanding and must be attractive to a suitor”.
Chair Tiffany Hall, who is overseeing the search for Russo’s successor, appears to agree. She recently bought more than £200,000 worth of shares.