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TOP NEWS: B&M confident as sales rise and targets 1,200 stores in UK

ALN

B&M European Value Retail SA on Thursday said it was well prepared for the ’golden quarter’ after seeing half-year profit fall in the face of tough comparatives.

The Luxembourg-headquartered variety goods retailer said pretax profit fell 24% to £169 million in the 26 weeks to September 28 from £222 million a year prior. Profit was hurt by £23 million in one-off costs, compared to £12 million in one-off gains a year before. Finance costs also were higher.

Adjusted earnings before interest, tax, depreciation and amortisation edged up 2.0% to £274 million from £269 million.

Chief Executive Alex Russo said the slight improvement in adjusted earnings was a ‘good performance’ set against a ‘record prior year of earnings growth with strong first half comparatives.’

Revenue climbed 3.7% to £2.64 billion from £2.55 billion, driven by volume growth.

B&M UK total sales growth improved across the half with 6.0% in the second quarter up from 1.5% in the first quarter. Total UK sales were £2.12 billion, up 3.4% from £2.05 billion.

In response, shares in B&M rose 3.2% to 392.10 pence each in London on Thursday. The wider FTSE 100 index was up just 0.1%.

B&M said to ‘future proof’ volume growth, a new UK imports centre will be opened in financial 2026, optimising existing distribution centre network capacity

levels.

A further 45 new B&M stores UK are planned this financial year, with 30 opened in the first half. New stores are performing ‘exceptionally well,’ B&M said.

The longer-term target is to reach 1,200 UK stores. According to its website, B&M currently has 741 UK stores.

In France, B&M said it is currently extending the French distribution centre which will add further capacity for volume growth.

‘Both projects will help unlock the exciting growth potential in France,’ the firm added.

In addition, B&M has launched a formal review of the parent company’s corporate domicile to simplify administrative processes and enable greater flexibility in returning capital to shareholders, including through share buybacks.

B&M intends to retain its London listing in the event that any change is ultimately implemented and an update will be provided in early 2025.

Looking ahead B&M said it is ‘well positioned’ for the ’golden quarter’ that includes Christmas, with a continued focus on price, product and standards.

B&M said while the consumer environment remains ‘uncertain,’ 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.’

It anticipates full-year group adjusted Ebitda to be in the range of £620 to £660 million, with growing volume momentum, particularly in general merchandise.

In the 53 weeks to March 30, 2024, B&M reported adjusted Ebitda of £629 million.

B&M also confirmed that Trading Director Bobby Arora will retire in March 2025. He will be succeeded by Gareth Bilton, and this handover is already ‘well progressed’.

Bilton has over 25 years experience at B&M and leads the buying and merchandising team.

The interim dividend was increased by 3.9% to 5.3 pence from 5.1p.

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