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B&M Q3: +0.3% Rise In Like-For-Like Sales

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B&M European Value Retail S.A., the UK's leading variety goods value retailer, today provides a trading update for the third quarter of its current financial year, relating to the 13 week period from 29 September 2019 to 28 December 2019. 

Highlights 

·    Group revenue growth in the quarter of +9.3% at constant currency  

·    B&M UK stores revenue growth of +8.8% including like-for-like ("LFL") growth of +0.3% for the quarter, against the backdrop of a challenging broader retail market and our decision not to engage in any early discounting activity 

·    15 gross new B&M UK stores opened in the quarter, 12 net of relocations 

·    6 planned gross new store openings at our B&M UK stores business for the final quarter 

·    Heron Foods, our value convenience store chain, continues to trade well building on  a good performance in the prior year with solid LFL sales growth and net 5 new stores opened in the quarter 

·    Progress continued to be made at Babou on the introduction of directly sourced new product ranges. Babou generated revenues of £85.0m in the quarter 

·    Jawoll sales revenues were -1.5% on a constant currency basis for the quarter. The strategic review  announced on 12 November 2019 is ongoing      

Simon Arora, Chief Executive, said, 

"Against the backdrop of a difficult UK retail environment with reduced shopper footfall and political uncertainty, our core B&M UK business generated continued growth and delivered a record level of peak season sales. Cumulatively, B&M UK has achieved +2.3% LFL sales growth during the financial year to date, albeit with a slower performance than anticipated during the run up to Christmas. 

"Overall the business delivered a good quarter operationally. Costs were well controlled and, combined with our usual strong focus on cash gross margins, yielded a profitable outcome. We were also able to exit the period with normal seasonal inventory levels. Our new store programme delivered 15 gross and 12 net new B&M UK stores in the quarter, and this year's openings as a whole have performed better than expectations. 

"I would like to thank our teams across all our fascias for their hard work in delivering the biggest ever Golden Quarter for the B&M Group."                                                     

Revenue 

Total Group revenue in Q3 2019/20 was £1,190.9m compared with £1,092.5m in the previous year.

B&M revenue reached £957.4m (like-for-like +0.3%) compared with £879.9m (like-for-like -1.6%) in Q3 2018/19.

Group sales revenue for the quarter increased by +9.3% on a constant currency basis. On an actual currency basis, total sales revenue increased by 9.0% to £1,190.9m (2018: £1,092.5m). 

B&M UK stores business sales revenue in the 13 week period increased by 8.8% to £957.4m (2018: £879.9m) with LFL sales of +0.3%. Our LFL performance was held back by disappointing sales across the Toys & Seasonal Confectionery categories, which was offset by continued strength and outperformance across our Home Departments. We refrained from participating in any early or unusual discounting activity over the quarter and remained focused on our cash margin. Inventory levels are also normal for the time of year.

Heron Foods has continued to have a pleasing performance with revenues growing by 6.2% to £95.6m (2018: £89.9m) in the quarter. There were 5 net new stores opened in the quarter (taking the total to 295 stores) and we are on track to open 20 gross new stores in the full year. 

Our French business, Babou, increased revenues by +29.3% on a constant currency basis, of which 26.1% related to the non-comparable period of ownership last year.  

Jawoll's revenues were -1.5% at £53.0m (2018:£55.3m) on a constant currency basis. We are continuing with the strategic review process that was announced on 12 November 2019. Further information in relation to the outcome of that process will be given in due course.  

Strategy 

At the end of the quarter the B&M UK stores business had 657 trading stores, having opened 15 gross new stores (12 net of relocations) in the quarter, and with Heron Foods now trading from 295 stores, having opened net 5 stores in the quarter.  

In this financial year in the B&M UK business we expect to have opened 51 gross new stores, being at least 41 net. We also expect to have opened 20 Heron Foods net new stores in the financial year. The pipeline of new stores of the Group for the next financial year also looks healthy. 

We are pleased by the initial training phase at our new 1 million sq feet Bedford DC facility, the fit-out of which was largely completed in the quarter. Negotiations are ongoing in relation to the proposed sale of the investment vehicle in which this asset is held. 

Outlook

We have seen a positive start to January trading but the outlook for the rest of the quarter could, as always, be impacted by any adverse weather conditions which may occur over the remainder of the winter. We look forward to 2020 with confidence.      

Source : B&M 

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10 January 2020

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