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B&M Interims Show 'Solid Underlying Growth In A Tough Environment'


B&M European Value Retail S.A. ("the Group"), the UK's leading variety goods value retailer, today announces its interim results for the 26 weeks to 24 September 2022.


  • Group revenues increased by 1.8% on prior year to £2,309m (+1.9% constant currency1). This represents a step up in Q2 sales, which rose by 6.3% compared to a (2.3)% decline in Q1. Momentum has continued into Q3

  • Group adjusted EBITDA4 of £232m and margin of 10.0% on a pre-IFRS16 basis versus £282m and margin of 12.4% in the prior year, driven by the reduction in gross margin but a strong increase compared to the pre-pandemic adjusted EBITDA figure in HY1 FY20 of £151m and margin of 8.5%. Current year group adjusted EBITDA on a post-IFRS16 basis was £340m versus £385m in the previous year

  • Group cash generated from operations was £370m (H1 FY22: £201m), year on year ("YoY") growth of 83.3% reflecting planned stock reductions and strong inventory controls

  • B&M UK fascia2 revenue decreased by (0.9)% on prior year, with like-for-like3 ("LFL") revenues decreasing by (3.9)%. However, Q2 LFLs were up 2.0%, compared with a decline of (9.1)% in Q1, which was affected by the strong seasonal sales in Q1 in the previous year. Q2 3-year LFL increased by 14.4% with strong transaction numbers

  • B&M UK adjusted EBITDA4 % decreased to 10.6% (H1 FY22: 13.5%), which was driven by the trading gross margin % reduction of 213 bps8, largely due to higher markdowns in the gardening category resulting from the late arrival of warm weather

  • Total gross new store openings in in H1 FY23 for B&M UK were 10, 4 in France and 7 in Heron. New space is performing well and store standards continue to strengthen

  • Strong strategic and financial progress in France as sales increased by 18.2%, with all stores now under the B&M banner and adjusted EBITDA4 of £18m (9.6% of sales) versus £11m in H1 FY22 (7.3% of sales). The business continues to build strong operational momentum

  • Strong operational and financial progress in Heron Foods as sales increased by 14.6% as consumers were attracted to our convenience discount stores. Adjusted EBITDA4 of £14m (6.1% of sales) versus £13m in H1 FY22 (6.6% of sales)

  • Group statutory operating profit was £249m (H1 FY22: £283m), statutory profit before tax was £201m (H1 FY22: £241m) and statutory diluted earnings per share was 15.7p (H1 FY22: 19.0p)
  • An interim dividend5 of 5.0p per Ordinary Share will be paid on 16 December 2022, which is at the same level as the previous financial year

  • Net debt to adjusted EBITDA leverage ratio (pre-IFRS16) at 1.3x remaining comfortably below our previously stated ceiling of 2.25x. Strong cash generation and low leverage provides the Group with flexibility

  • Trading has been good in the first six weeks of the Golden Quarter, with LFL sales up 2.5% in B&M UK stores and strong sell-through in non-grocery categories. We confirm previous guidance given of £550m - £600m Group adjusted EBITDA4, significantly ahead of the pre-pandemic level of £342m in FY20

Alex Russo, Chief Executive, said, 

"Sales momentum is good as we enter a difficult period for the economy and consumers. Our value-based approach is winning with existing and new customers, and we will do our very best to help them weather the cost-of-living crisis. We are well positioned as we trade through the Golden Quarter and our strategy remains unchanged - a relentless focus on price and product.

I would like to personally thank Simon Arora for his leadership of B&M. He and his brother Bobby have built an exceptional business and the team will continue to build on Simon's legacy. We see four drivers of long-term growth: 

i)    Existing Stores: We see potential for improving sales in existing stores, by continuing to improve store standards, by refining product mix and by emphasising our value for money credentials. Consumers are under pressure from inflation, falling real earnings and rising interest rates, but we are well positioned to help new and existing customers.

ii)   New Stores: We confirm our long-term target of 950 stores in the UK, which would represent an additional 35% more stores. Although new store openings have slowed during and since COVID, we retain a healthy pipeline and there are a significant number of localities in the United Kingdom where B&M is not represented at all.

iii)  France: Our business in France offers excellent long term growth potential - through new stores and through improving the offer as the business adopts B&M best practice and the B&M supply chain. With just 111 stores in a country with a population similar in size to the UK, medium to long term growth potential is high.

iv)  Heron Foods: During tough times consumers seek out value offerings and stores with limited ranges. This helps consumers manage their budgets, and in this environment Heron Foods (along with our B&M fascia stores) is particularly well positioned as a discount convenience store. 

We plan for an ongoing long term operating margin higher than pre-pandemic levels. During lockdown, the business demonstrated its ability to deliver operational gearing, as overall Group sales densities and profits increased. As sales returned to a normalised level, albeit significantly higher than pre-lockdown, some of the margin growth and operational gearing has moderated. The longer-term outlook remains positive for sustained margin improvement, with cost control, efficiencies and improved processes offsetting cost inflation.

We remain a highly cash generative business and we maintain our ceiling of 2.25x for gearing.  We expect to be able to continue to return excess cash periodically to shareholders over and above normal dividends." 



H1 FY23



H1 FY22






Total Group revenues




B&M France


Heron Foods


Change in total group revenues at constant currency1






































Group adjusted EBITDA4




B&M France


Heron Foods


































Group adjusted EBITDA4 margin %







(240) bps


Group cash generated from operations









Group adjusted profit before tax4












Group statutory profit before tax











Adjusted diluted EPS4










Statutory diluted EPS










Ordinary dividends5










Total number of stores




Heron Foods






























Financial Results (unaudited)

1.     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.

2.     References in this announcement to the B&M UK business includes 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 includes both the Heron Foods fascia and B&M Express fascia convenience stores in the UK. When reporting adjusted EBITDA, B&M UK also includes the corporate segment as referred to in note 2 of the financial statements, and includes an adjusted loss of <£1m (H1 FY22: loss of <£1m).

3.     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 FY22. This 14-month approach has been adopted as it excludes the 2-month halo period which new stores experience following opening.

4.     The Directors consider adjusted figures to be more reflective of the underlying business performance of the Group and believe that this measure provides additional useful information for investors on the Group's performance. Further details can be found in notes 3 and 4.  In particular, adjusted figures exclude the impact of IFRS16, both to maintain comparability with prior periods and as management consider that the pre-IFRS 16 measure of rental costs is key to the operational management of the business.

5.     Dividends are stated as gross amounts before deduction of Luxembourg withholding tax which is currently 15%.

6.     Net capital expenditure includes the purchase of property, plant and equipment, intangible assets and proceeds of sale of any of those items.  These exclude IFRS16 lease liabilities.

7.     Net debt comprises interest bearing loans and borrowings, overdrafts and cash and cash equivalents. Net debt was £736m at the year end, reflecting £959m as the carrying value of gross debt netted against £223m of cash. See note 8 of the financial statements for more details.

8.     Trading Gross Margin is considered to be a meaningful measure of profitability as it refers to the measure of Gross Margin used by management to commercially run the business. It differs to the statutory definition for B&M, which declined 284bps from 37.3% to 34.5%, due to technical accounting adjustments in relation to the allocation of gains and losses from derivative  accounting, storage costs and commercial income, with the derivative adjustments the main factor.  Our current Group hedging profile is strong with a £108m asset included on the half year statement of financial position which is in relation to our foreign exchange position that runs until September 2023.

9.     The consolidated financial statements are presented in pounds sterling and all values are rounded to the nearest million (£'m), except when otherwise indicated. This is the first interim report where the Group has rounded to the nearest million (previously rounding to the nearest thousand). In transitioning the prior year accounts, usual rounding practices have been adhered to.

Source : B&M European Value Retail S.A.

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10 November 2022

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