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B&M Issues Q3 Trading Update; Waives Business Rates Relief

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B&M European Value Retail S.A. ("the Group"), the UK's leading variety goods value retailer, today provides a trading update relating to its Third Quarter ("Q3") performance to date, and relating to business rates relief. 

On 12 November 2020, the Group announced that it had made a strong start to the second half of its financial year and, against a highly uncertain economic backdrop and continued impacts from Covid-19, B&M was well placed to continue to grow profitably in the UK whilst developing the proposition in France. 

Over the first 9 weeks of Q3 at B&M UK stores, there has been a steadily improving customer count and like-for-like1 ("LFL") sales growth has been slightly ahead of H1, but is expected to moderate over the balance of the financial year. 

Accordingly, the Group now expects adjusted EBITDA2 (on a pre-IFRS 16 basis) for the twelve months to 27 March 2021 ("FY21") to be in the range of £600m to £650m. The analysts' consensus estimate3 for FY21 adjusted EBITDA2 (on a pre-IFRS 16 basis) is currently £571m.  In line with its capital allocation policy, the Board will continue to evaluate capacity to return any surplus cash to shareholders.   

The above adjusted EBITDA range and consensus is prior to any voluntary payment of business rates in FY21. The Group welcomed the Government's business rates relief, given the disproportionate burden business rates places on physical stores versus online competitors, particularly at a time when the nature and duration of Covid-19 restrictions were unknown.  Although significant uncertainty remains, the Group believes it is now right to forego the business rates relief granted to B&M, which is approximately £80m this financial year. Having voluntarily returned furlough money, B&M will now engage with local authorities on an appropriate mechanism to waive the business rates relief.

The Group calls on Government to create a level playing field that requires all essential and online retailers to contribute proportionately in terms of taxation and business rates.

Simon Arora, Chief Executive, said: 

"The safety of the Group's colleagues and customers remains the key priority in these difficult times. We are proud of the role we have played in this crisis, working very hard in our supply chain and stores to ensure our shoppers can rely on us for their everyday essentials, whilst creating over 1,800 new jobs, making charitable donations to local food banks, extending discounts to NHS workers and currently supporting "Mission Christmas", an important initiative that aims to deliver over £15m of gifts to 400,000 under-privileged children this Winter. 

We request urgent reform of the outdated business rates system that is contributing to job losses across the retail sector and is acting as a deterrent to B&M and other potential occupiers taking up vacant space in many locations."

Source : B&M Retail 

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03 December 2020

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