Profits at discount retail giant B&M fell by £40m during its latest financial period despite a rise in sales, new figures have confirmed.
The Liverpool-headquartered company has ported statutory pre-tax profits of £201m for the six months to September 24, 2022, down from the £241m it achieved during the same period in 2021.
The fall was despite the group's total revenue increasing from £2.268bn to £2.309bn.
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The dip in B&M's UK sales of almost 1% to £1.892bn was more than offset by a rise of over 18% in France to £184m and a 14.6% jump for Heron Foods to £233m.
On the first six weeks of its current "Golden Quarter", the group said its like-for-like sales are up 2.5% in B&M's UK stores.
B&M added that the rise "represents a significant increase in total sales over pre-Covid levels, and is against a backdrop of rising interest rates, increased cost inflation and declining consumer confidence".
Chief executive Alex Russo said: "Sales momentum is good as we enter a difficult period for the economy and consumers.
"Our value-based approach is winning with existing and new customers, and we will do our very best to help them weather the cost-of-living crisis.
"We are well positioned as we trade through the Golden Quarter and our strategy remains unchanged - a relentless focus on price and product.
"I would like to personally thank Simon Arora for his leadership of B&M.
"He and his brother Bobby have built an exceptional business and the team will continue to build on Simon's legacy."
He added: "We plan for an ongoing long term operating margin higher than pre-pandemic levels.
"During lockdown, the business demonstrated its ability to deliver operational gearing, as overall group sales densities and profits increased.
"As sales returned to a normalised level, albeit significantly higher than pre-lockdown, some of the margin growth and operational gearing has moderated.
"The longer-term outlook remains positive for sustained margin improvement, with cost control, efficiencies and improved processes offsetting cost inflation.
"We remain a highly cash generative business and we maintain our ceiling of 2.25x for gearing.
"We expect to be able to continue to return excess cash periodically to shareholders over and above normal dividends."
On its outlook, the group said it expects its full-year adjusted EBITDA to be between £550m and £600m, in line with its previous guidance.
It also expect its gross margin to improve going forwards compared to H1, "helped by strong stock discipline, and not impacted by disappointing weather patterns as at the beginning of spring/summer 2022".
The group added: "We remain well positioned to benefit from consumers trading down in grocery and non-grocery.
"As some customers experience our value for money offer for the first time, so would we expect to retain many of these consumers into any economic recovery.
"We will continue to focus on building long term relationships and loyalty with our consumers and will not sacrifice hard-won, long-term positioning for short term gains."
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