B&M European Value Retail S.A. (LON:BME), the UK’s leading variety goods value retailer, has announced its interim results for the 26 weeks to 28 September 2024.
Highlights
| Fascia performance1 | Revenue £’m | Revenue growth % | Adjusted EBITDA2(pre-IFRS 16) margin % | |||||
| H1 FY25 | H1 FY24 | H1 FY25 | H1 FY24 | H1 FY25 | H1 FY24 | |||
| B&M UK | ||||||||
| 2,121 | 2,045 | 3.7% | 8.1% | 11.3% | 11.5% | |||
| B&M France | ||||||||
| 247 | 232 | 6.8% | 26.1% | 6.9% | 7.8% | |||
| Heron Foods | ||||||||
| 276 | 272 | 1.1% | 17.0% | 6.7% | 6.6% | |||
| · | Group revenues increased by 3.7% to £2,644m (+3.9% constant currency3) driven by volume growth. B&M UK total sales growth improved across the half with 6.0% in Q2 up from 1.5% in Q1, supported by improving like-for-likes4 of (1.9)% in Q2 up from (5.1)% in Q1 |
| · | Opened 39 gross new stores across the Group in H1 (30 in B&M UK, 5 in France and 4 in Heron) |
| · | Group adjusted EBITDA2 (pre-IFRS 16) of £274m up 2.0% (H1 FY24: £269m), with a margin of 10.4% (H1 FY24: 10.5%) |
| · | Group adjusted operating profit2 of £258m (H1 FY24: £263m), with statutory operating profit of £235m (H1 FY24: £275m) and statutory profit before tax of £169m (H1 FY24: £222m) |
| · | Post-tax free cash flow5 of £73m (H1 FY24: £143m), with a clean inventory position exiting Spring/Summer and early Autumn/Winter shipments to derisk Golden Quarter execution |
| · | To futureproof volume growth, a new UK imports centre will be opened in FY26, optimising existing distribution centre network capacity levels; 2024 physical container volumes are +40% vs. 2019, reflecting the step change in market share achieved |
| · | Net debt7 to adjusted EBITDA2 (pre-IFRS 16) leverage ratio of 1.2x (H1 FY24: 1.1x). Net debt including leases was 2.5x (H1 FY24: 2.4x) |
| · | Interim dividend6 of 5.3p per Ordinary Share will be paid on 13 December 2024 (H1 FY24: 5.1p) |
| · | FY25 Group adjusted EBITDA2 (pre-IFRS 16) expected to be in the range of £620m-£660m (FY24 52/53 weeks: £616m/£629m), with growing volume momentum, particularly in general merchandise |
| · | Smooth transition of executive team; succession plan in place for the retirement of the Group Trading Director in March 2025 |
| · | Formal review of the parent company’s corporate domicile underway to simplify administrative processes and enable greater flexibility in returning capital to shareholders, including through share buybacks |
Alex Russo, B&M European Value Retail Chief Executive, said:
In the first six months, we delivered Group adjusted EBITDA2 (pre-IFRS 16) up 2.0% to £274m driven by total sales growth of 3.7%. This is a good performance as we annualise a record prior year of earnings growth with strong first half comparatives. We continue to execute with Everyday Low Price (“EDLP”) integrity for all our customers, with industry leading availability and excellence in operational standards. Our model is underpinned by a disciplined and low-cost approach across all three of our businesses, focusing on simple, sustainable growth, delivered through the hard work of our teams.
Our product ranges across both grocery and general merchandise resonate very well with customers at a time when disposable incomes remain under pressure and the tax burden continues to increase. We have made significant progress over the last three months in general merchandise, particularly in Home, with the range strengthened and prices lowered further to drive volume market share.
Our new store opening programme is on track and performing exceptionally well. To futureproof this volume growth, I am pleased to announce that next year we will open a new imports centre in Ellesmere Port. This facility will manage inbound container flow and optimise the capacity of our five existing B&M UK distribution centres which are handling ever-growing volumes. This is the right productivity step to support both our short and long-term growth plans, including our target of not less than 1,200 B&M UK stores. We are currently extending our French distribution centre demonstrating the growth plans in place for France.
Our long-term ambition for the Group remains unchanged, in supporting customers with exceptional value. As we trade through the Golden Quarter, we are encouraged by recent volume momentum and remain focussed on delivering profitable, cash-generating growth for all of our shareholders.
Outlook and guidance
The business is well positioned for the Golden Quarter with its continued focus on price, product and standards. While the consumer environment remains uncertain, the Group has demonstrated it executes well in all trading environments.
With growing volume momentum, and with broadening strength in general merchandise, we are confident in our outlook for the second half and the full year. We anticipate full-year Group adjusted EBITDA2 (pre-IFRS 16) to be in the range of £620m-£660m (FY24 52/53 weeks: £616m/£629m).
Financial results (unaudited)
| H1 FY25 | H1 FY24 | Change | |
| Group revenue | £2,644m | £2,549m | 3.7% |
| Group adjusted EBITDA2 (pre-IFRS 16) | £274m | £269m | 2.0% |
| Group adjusted EBITDA2 (pre-IFRS 16) margin % | 10.4% | 10.5% | (18) bps |
| Group adjusted operating profit2 | £258m | £263m | (1.8)% |
| Group statutory operating profit | £235m | £275m | (14.6)% |
| Group statutory operating profit margin % | 8.9% | 10.8% | (190) bps |
| Post-tax free cash flow5 | £73m | £143m | (49.2)% |
| Group cash generated from operations | £303m | £352m | (14.1)% |
| Group statutory profit before tax | £169m | £222m | (23.8)% |
| Adjusted (pre-IFRS 16) diluted EPS2 | 14.7p | 15.4p | (4.8)% |
| Statutory diluted EPS | 12.3p | 16.3p | (24.9)% |
| Ordinary dividends6 | 5.3p | 5.1p | 3.9% |
Notes:
1. References in this announcement to the B&M UK business include the B&M fascia stores in the UK except for the ‘B&M Express’ fascia stores. References in this announcement to the Heron Foods business include both the Heron Foods fascia and B&M Express fascia convenience stores in the UK.
2. Adjusted values are considered to be appropriate to exclude unusual, non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of account. See notes 3 and 4 of the financial information for further details.
3. Constant currency comparison involves restating the prior year Euro revenues using the same exchange rate as that used to translate the current year Euro revenues.
4. One-year like-for-like revenues relate to the B&M UK estate only (excluding wholesale revenues) and include each store’s revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY23. This 14-month approach has been adopted as it excludes the 2-month halo period which new stores experience following opening.
5. Please see note 3 of the financial statements for more details and reconciliation to the Consolidated statement of cash flows. Statutory Group cash generated from operations was £303m (H1 FY24: £352m). This statutory definition excludes payments for leased assets including the leasehold property estate.
6. Dividends are stated as gross amounts before deduction of Luxembourg withholding tax which is currently 15%.
7. Net debt comprises interest bearing loans and borrowings, overdrafts and cash and cash equivalents. Net debt was £788m at the half year end (H1 FY24: £700m), reflecting £973m (H1 FY24: £924m) as the carrying value of gross debt netted against £185m of cash (H1 FY24: £224m). See note 7 of the financial information for more details.
Results Presentation
An in-person presentation for analysts in relation to these FY25 Interim Results will be held today at 09:30 am (UK) at London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. Attendance is by invitation only and attendees must be registered in advance.
A simultaneous live audio webcast and presentation will be available via the B&M European Value Retail corporate website at: Reports & Presentations l B&M Stores (bandmretail.com) for analysts and investors only.
A further call for North American investors only is scheduled today at 16:00 (GMT). To register please contact Dave McCarthy via email at [email protected]
