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Retail & Consumer

B&M shares fall to record low after accounting error revealed

B&M said it had failed to recognise as much as £7m in overseas freight costs

B&M has hundreds of stores across the 海角视频(Image: MEN)

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 海角视频 business to sustainable like-for-like growth. This is our absolute priority. We are taking decisive actions to correct the operational weaknesses identified."