B&M European Value Retail well positioned to navigate supply and inflationary pressures

B&M

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 25 September 2021.

HIGHLIGHTS

·      Group revenues increased by +1.2% on prior year to £2,268.0m (+1.4% constant currency1) or +26.8% on a two-year basis versus H1 FY20

·      B&M UK fascia2 revenue up +1.3% on prior year, with like-for-like3 (“LFL”) revenues decreasing by (5.0)%   

– On a two-year basis vs H1 FY20, LFL revenues were +16.8% as sales densities remained significantly higher than pre-pandemic levels

·      Gross margin in the B&M UK business was particularly strong, driven by a change in the sales mix towards General Merchandise and high sell-through across Spring/Summer seasonal ranges leading to limited markdown activity

·      Group adjusted EBITDA4 of £282.2m on a pre-IFRS16 basis versus £295.6m5  in the prior year, or £255.7m in the prior year on a comparable basis when reflecting the voluntary charge relating to business rates subsequently made in H2 FY21

– On a two-year basis versus H1 FY20, Group adjusted EBITDA4 increased +86.4% due to higher sales densities and a favourable sales mix

·      Group statutory profit before tax (post-IFRS16) increased +2.4% to £241.4m (H1 FY21: £235.6m5) and Group adjusted profit before tax4 (pre-IFRS16) decreased by (6.2)% to £238.0m (H1 FY21: £253.6m5)

·      Statutory diluted earnings per share of 19.0p (H1 FY21: 18.7p) and adjusted diluted earnings per share4 of 18.7p (H1 FY21: 20.1p)

·      14 gross new B&M UK store openings and 9 store closures in H1 FY22

·      More challenging trading conditions in Heron Foods as average transaction values for grocery shopping normalise to pre-pandemic levels, but satisfactory earnings through careful cost control and cash discipline

·      Strong strategic and financial progress in France, with 100 out of 104 stores trading as B&M and adjusted EBITDA4 of £11.4m (H1 FY21: £2.7m)

·      Group cash generated from operations was £201.7m (H1 FY21: £403.2), reflecting a strong EBITDA performance and the impact of an earlier build of inventory compared to the prior period 

·      Ordinary half year dividend6 increased by 16.3% to 5.0p per share (H1 FY21: 4.3p), to be paid on 17 December 2021

·      Good stock availability heading into peak trading having deliberately taken delivery of imported General Merchandise earlier than normal, with supply chains across the Group remaining robust

·      Ongoing evaluation of current leverage and cash position, in line with our capital allocation framework

Simon Arora, B&M European Value Retail, Chief Executive, said, 

“The Group has performed strongly throughout the first half of our financial year, with customers continuing to be drawn to our value for money offer . 

We have responded decisively to supply chain challenges by leveraging our strong supplier relationships and we have improved in-store execution.  As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges. To colleagues across the Group, I express my gratitude for their dedication, skill and commitment, which have made these results possible.

Although the pathway to a ‘new normal’ remains uncertain and the industry faces a number of supply and inflationary pressures as we enter the second half of the financial year, we are very confident that the B&M Group is well positioned to navigate these and will continue to be successful both in the UK and in France.”

Analyst & Investor webcast & conference call

An Analyst & Investor only webcast and conference call in relation to these FY22 Interim Results will be held today at 9.45am (UK).

The conference call can be accessed live via a dial-in facility on:

UK & International:   +44 330 336 9128

US:                              +1 929 477 0402

Confirmation code:  5209689

A simultaneous audio webcast and presentation will be available via the B&M European Value Retail corporate website at www.bandmretail.com 

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