B&M shares have plunged following an accounting error that resulted in the company overstating its profits.
The FTSE 250 discount chain revealed it had failed to account for up to £7m in international freight costs, which vanished from its projections "following an operating system update."
Consequently, B&M has reduced its pre-tax earnings guidance for the year to £470m-£520m, down from its earlier projection of £510m-£560m. The group plans to launch a comprehensive “third-party review” into the incident.
B&M shares plummeted by as much as 18 per cent to 178p during the opening moments of trading in London on Monday, reaching a record low. The stock has approximately halved in value since the beginning of the year, as reported by .
The budget retailer also announced that its chief financial officer Mike Schmidt had chosen to leave the company. B&M stated that Schmidt would remain on the board until a successor had been found.
"The board wishes Mike well for the future," B&M said in a statement.
The error represents the latest blow for B&M after it cautioned earlier this month that it would need to "correct operational weaknesses" amid declining profits. Chief executive Tjeerd Jegen said at the time: "While B&M's value proposition remains strong, our operational execution has been weak. This has impacted our first-half trading performance, and this is reflected in the full-year outlook."
He added: Our response is a decisive plan, 'Back to B&M Basics', focused on returning the Ƶ business to sustainable like-for-like growth. This is our absolute priority. We are taking decisive actions to correct the operational weaknesses identified."
The company's recovery strategy includes slashing prices across various products, introducing more promotions, and reducing the number of product lines to cut costs.
