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B&M Retail delivers another stunning set of results

B&M new store

Earlier today, the South African owned value retailer B&M European Value Retail S.A. announced its preliminary results for the 52 week period to 25th March 2017.

HIGHLIGHTS

Business highlights

  • 53 new stores opened in the UK, including 9 relocations to large, modern Homestores, and 19 new stores in Germany.
  • Strong pipeline of 40-50 new stores planned in the UK and a further 15 in Germany this financial year.
  • Revised UK store target from 850 to at least 950 stores.
  • New warehouse capacity in both the UK and Germany now working efficiently.
  • Delivery of consistent in-store retail standards, strong product offering and great value for money supporting trading momentum.

Financial overview

  • Group revenues increased by +19.4% to £2,430.7m (2016: £2,035.3m)
  • UK full year like-for-like sales1 +3.1% (2016: + 0.9%), including Q4 like-for-like sales +2.9% and an excellent start to 2018
  • Group Adjusted EBITDA3 increased by 22.0% to £234.9m (2016: £192.5m)
  • Group EBITDA2 increased by 18.1% to £231.5m (2016: £196.1m)
  • Adjusted profit before tax increased by 25.6% to £190.1m (2016: £151.4m)
  • Profit before tax increased by 18.4% to £182.9m (2016: £154.5m)
  • Adjusted diluted earnings per share 14.9p (2016: 12.2p)
  • Diluted earnings per share 14.3p (2016: 12.4p)

Strong cash generation

● Operating cash flow £210.9m (2016: £170.9m)
● Year-end net debt £401.9m and net debt to Adjusted EBITDA3 1.71x (2016: 1.84x) after payment of the £100m special dividend in July 2016
● Recommended final dividend of 3.9p per share to be paid on 4 August 2017, bringing the full year ordinary dividend increase to 20.8%

1 Like-for-like revenues includes each store’s revenue for that part of the current period that falls at least 14 months after it opened; and it is compared with its revenue for the corresponding part of the previous period. This 14 month approach has been taken as it excludes the two month halo period which new stores experience following opening.

2 EBITDA represents profit on ordinary activities before net finance costs, taxation, depreciation and amortisation.

3 The Adjusted EBITDA measure used by the Group has been simplified to only exclude the effect of derivatives and any significant project costs incurred by the Group. Previously excluded items that are no longer adjusted for include pre-opening store costs, IPO fees, acquisition costs, professional fees associated with the previous financing structure, property provisions and other items which management considered to be one off in nature and the prior year comparative has been restated accordingly. For information; pre-opening store costs were £6.3m during the year (2016: £7.6m).

Download the B&M investor presentation here.

Sir Terry Leahy, Chairman, said,

“B&M has delivered further strong increases in sales, profits and cash generation whilst pushing on with rapid store expansion in line with our strategy for growth. There was a robust return of trading momentum during the second half which has continued into the early weeks of the new financial year, affirming that B&M’s offer resonates well with customers during a period of economic uncertainty and profound structural change in retailing.”

Simon Arora, Chief Executive, said,

“B&M has never been in better shape. The skill, hard work and commitment of our people have driven our powerful return to trading form; building greater stability and consistency into our operations, keeping our costs down, delivering an even more competitive, compelling offering across our ranges week-in, week-out, especially in our seasonal peak periods and importantly, helping our customers spend less at a time when general retail prices have started to rise. On behalf of the Board, I would like to thank them all for their efforts.” 

Download the full B&M results announcement here.

Source: Insight Team & B&M Retail press release.

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25 May 2017

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