// B&M founder Simon Arora has defended a £44m payout to his family trust
// The retailer declared a special dividend of 25p per share for the 6 months to September
// B&M has benefited from a business rates relief of £38m during the period
B&M founder Simon Arora has defended a £44 million payout to his family trust after the value retailer posted a 121 per cent rise in half-year pretax profits.
The retailer declared a special dividend of 25p per share for the six months to September alongside its ordinary interim payout of 4.3p per share.
It totalled £293 million, of which £44 million was paid to Arora’s offshore family trust.
B&M has benefited from a business rates relief of £38 million during the period, although this was lower than its rivals.
“We have lots of different stakeholders. Just in the six-month period we paid £60m in corporation tax, and in fact the total amount of tax we paid last year was more than £250 million,” Arora said.
“If you then also then think about how we behaved in terms of our other stakeholder responsibilities, we gave a £3m discount to NHS workers, we made a very quick cash donation to food banks around the country, and we’ve decided to repay the small amount of furlough money that we had.
“And so, we’ve done all those things, we think we’re doing the right thing by all the different stakeholders in our business, and one of those stakeholders is our shareholders.
“We’re not sure what’s achieved by leaving surplus cash in a current account doing nothing. We just don’t need the cash, we should return it to shareholders.
“The simple maths are, if you take a store’s 80 hours of trading, having someone at the front door and someone at checkout across 664 stores, it entirely wipes up the business rates relief.”
B&M is allowed to keep its stores open during the lockdown after being classed as an essential retailer.
The retailer saw revenues rise by a quarter, from £1.79 billion to £2.24 billion for the first half of its year to September 26.
“We are clearly an essential retailer. We are one of the 10 largest grocery retailers in the UK, that’s a fact,” Arora said.
“The argument that Tesco should tape off the kettle or take the kettle off the shelf, you are simply diverting that to Amazon.
“Our combination of everyday value across a broad range of product categories and convenient out-of-town locations has proved popular with shoppers.”
The business has expanded in the past year and plans to open 40 to 50 UK stores in the current financial year, which will be offset by 10 closures.