REG - B&M European - FY24 Preliminary Results
05/06/2024 07:00
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RNS Number : 1249R B&M European Value Retail S.A. 05 June 2024
5 June 2024
FY24 Preliminary Results Announcement
Volume driving profitable growth
B&M European Value Retail S.A. ("the Group"), the UK's leading variety
goods value retailer, today announces its Preliminary Results for the 53 weeks
financial reporting period to 30 March 2024 ("FY24"). The comparative
reporting period is for the 52 weeks ended 25 March 2023 ("FY23").
Highlights
Fascia Performance(1) Revenue growth % Adjusted EBITDA(2) (pre-IFRS 16) margin % Adjusted operating profit(2) margin %
FY24 FY23 FY24 FY23 FY24 FY23
B&M UK 8.5% 4.0%
12.6% 12.4% 12.4% 12.3%
B&M France 19.2% 22.1%
9.1% 9.6% 9.5% 8.8%
Heron Foods 15.3% 18.1%
6.4% 6.1% 4.9% 3.8%
· Group revenues increased by 10.1% to £5.5bn (+10.1% constant currency(3)), or
7.8% excluding the 53(rd) week
· All fascias delivering volume growth through both positive like-for-like(4)
("LFL") customer transaction numbers and new space growth
· Group adjusted EBITDA(2) (pre-IFRS 16) of £629m and margin of 11.5% (FY23:
11.5%) is a 9.7% increase year-on-year and is at the top end of the Group's
guidance range of £620m-£630m
· Group adjusted operating profit(2) increased 10.9% to £614m (FY23: £554m),
with volume driven profit growth and strong cost control across the three
businesses
· Strong post-tax free cash flow(5) of £382m (FY23: £464m) with a disciplined
approach to inventory management - Group inventory of £776m (FY23: £764m)
· Statutory operating profit of £607m (FY23: £536m) and statutory profit
before tax of £498m (FY23: £436m)
· Opened 78 gross new stores across the Group (47 in B&M UK, 20 in Heron
Foods and 11 in B&M France)
· Net debt(6) to adjusted EBITDA(2) (pre-IFRS 16) leverage ratio of 1.2x (FY23:
1.3x). Net debt including leases(7) to adjusted EBITDA (post-IFRS 16) 2.4x
(FY24: 2.5x)
· Recommended final dividend(8) of 9.6p per ordinary share, bringing the full
year dividend to 14.7p per share in addition to the 20.0p special dividend(8)
paid in January 2024 (FY23: 20.0p)
Alex Russo, Chief Executive, said,
"FY24 has been another good year for B&M. The three key components of our
business - buying, logistics and retail, are working in balance and we
continue to deliver excellent products at everyday low prices to our
consumers. We are well set for the years ahead.
During Q4, we accelerated our opening programme, and the step up in openings
is continuing. In FY25, we will open not less than 45 gross new B&M stores
in the UK, plus a meaningful number in France and for Heron. We have also
raised our long-term store target to not less than 1,200 B&M UK stores,
which provides a clear runway of profitable growth ahead for us, from our
current base of 741 B&M UK stores.
We have demonstrated strong volume-led momentum in our business throughout our
trading history and that has continued, driving our profits ahead of both
pandemic and pre-pandemic benchmarks. Despite the more challenging
comparatives, with continued new store openings, and a laser focus on low
prices and best in class retail standards, we remain confident in our outlook
for cash generation and profit growth."
Financial results
FY24 FY23 Change
Total Group revenue £5,484m £4,983m 10.1%
Group adjusted EBITDA(2) (pre-IFRS 16) £629m £573m 9.7%
Group adjusted EBITDA(2) (pre-IFRS 16) margin % 11.5% 11.5% (3) bps
Group adjusted operating profit(2) £614m £554m 10.9%
Group statutory operating profit £608m £536m 13.6%
Group statutory operating profit margin % 11.1% 10.7% 34 bps
Group cash generated from operations £862m £866m (0.4)%
Group post-tax free cash flow(5) £382m £464m (17.8)%
Group statutory profit before tax £498m £436m 14.1%
Adjusted (pre-IFRS 16) diluted EPS(2) 36.8p 36.5p 0.9%
Statutory diluted EPS 36.5p 34.7p 5.2%
Net debt(6) 737m 724m 1.8%
Net debt including leases(7) 2,094m 2,025m 3.2%
Ordinary dividends(8) 14.7p 14.6p 0.7%
Notes:
1. References in this announcement to the B&M UK business include 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 include
both the Heron Foods fascia and B&M Express fascia convenience stores in
the UK.
2. Adjusted values are considered to be appropriate to exclude unusual,
non-trading and/or non-recurring impacts on performance which therefore
provides the user of the accounts with additional metrics to compare periods
of accounts. See notes 2, 3 and 4 of the financial statements for further
details.
3. 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.
4. One-year like-for-like revenues relate to the B&M UK estate only
(excluding wholesale revenues) and are based on either 53 week vs. 53 week or
14 week vs. 14 week comparison periods. They 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 FY23.
5. Post-tax free cash flow is an Alternative Performance Measure. Please see
note 3 of the financial statements for more details and reconciliation to the
Consolidated statement of cash flows. Statutory Group cash generated from
operations was £862m (FY23: £866m). This statutory definition excludes
payments for leased assets including the leasehold property estate.
6. Net debt comprises interest-bearing loans and borrowings, and cash and cash
equivalents. Net debt was £737m at the period end, reflecting £919m as the
value of gross debt netted against £182m of cash. See notes 18, 21 and 28
of the financial statements for more details.
7. Net debt including lease liabilities is the above plus the current and
non-current lease liabilities recorded on the Consolidated statement of
financial position.
8. Dividends are stated as gross amounts before deduction of Luxembourg
withholding tax which is currently 15%.
Results Presentation
An in-person presentation for analysts in relation to these FY24 Preliminary
Results will be held today at 09:30 am (UK) at Bank of America Merrill Lynch,
2 King Edward St, London EC1A 1HQ. Attendance is by invitation only and
attendees must be registered in advance.
A simultaneous live audio webcast and presentation will be available via the
B&M corporate website at Reports & Presentations l B&M Stores
(bandmretail.com)
(https://www.bandmretail.com/investors/reports-and-presentations#2024)
Enquiries
B&M European Value Retail S.A.
For further information please contact: +44 (0) 151 728 5400 Ext. 6363
Alex Russo, Chief Executive Officer
Mike Schmidt, Chief Financial Officer
Dave McCarthy, Head of Investor Relations, Investor.relations@bandmretail.com
Media
For media please contact:
Sam Cartwright, H-advisors, sam.cartwright@h-advisors.global +44 (0) 7827 254
561
Jonathan Cook, H-advisors, jonathan.cook@h-advisors.global
(mailto:jonathan.cook@h-advisors.global) +44 (0) 7730 777 865
Disclaimer
This announcement contains statements which are or may be deemed to be
'forward-looking statements'. Forward-looking statements involve risks and
uncertainties because they relate to events and depend on events or
circumstances that may or may not occur in the future. All forward-looking
statements in this announcement reflect the Company's present view with
respect to future events as at the date of this announcement. Forward-looking
statements are not guarantees of future performance and actual results in
future periods may and often do differ materially from those expressed in
forward-looking statements. Except where required by law or the Listing Rules
of the UK Listing Authority, the Company undertakes no obligation to release
publicly the results of any revisions to any forward-looking statements in
this announcement that may occur due to any change in its expectations or to
reflect any events or circumstances arising after the date of this
announcement.
About B&M European Value Retail S.A.
B&M European Value Retail S.A. is a variety retailer with 741 stores in
the UK operating under the "B&M" brand, 335 stores under the "Heron Foods"
and "B&M Express" brands, and 124 stores in France also operating under
the "B&M" brand as at 30 March 2024. It was admitted to the FTSE 100 index
on 21 September 2020.
The B&M Group was founded in 1978 and listed on the London Stock Exchange
in June 2014. For more information, please visit www.bandmretail.com
(http://www.bandmretail.com)
Chief Executive's review
This has been a good year for the Group and is an inflection point for our
store opening programme. We have delivered a record Group adjusted EBITDA(1)
(pre-IFRS 16) of £629m at a margin of 11.5%. This has been driven by a record
year of revenues of £5.5bn, up 10.1%. Critically we have also maintained our
discipline on ensuring growth translates into cash, with a further £348m
declared as ordinary and special dividends, bringing the cumulative total of
cash returns paid over the four years FY21-FY24 to £1.8bn(2). With a
significant acceleration in openings in our final quarter, and not less than
90 B&M UK store openings in the next two financial years, the future is
exciting.
Core to our strategy and financial performance has been our relentless focus
on price integrity (EDLP) and high retail standards. Additional revenues
were driven by our like-for-like(3) ("LFL") growth of 3.7% in our core UK
business and by our new store openings that saw 47 gross new B&M stores
open in the UK, 11 in France and 20 in Heron. Importantly, almost half of the
B&M openings in the UK were in the fourth quarter, meaning the majority of
the benefits to sales, cash and profits will be felt in the current financial
year. The quality of our LFL(3) growth remains high, being driven by higher
volumes and positive customer transactions. This is a result of our price
position, our merchandising optimisation and our operational standards. The
progress in our LFL(3) sales comes alongside the strong performance of our new
store openings that are generating accretive sales densities.
Whilst FY24 was a good year, we are excited by the future. We will deliver our
stated plans for new store growth, driving sub 12 month cash paybacks. We will
maintain our operational execution discipline in existing stores. We will
remain everyday low price and that means a focus on everyday low costs
("EDLC") as we continue to mitigate inflation and protect our customers
wallets.
Store opening programme supports future growth
During the financial year we announced a new, long-term store target of not
less than 1,200 B&M UK stores, a significant increase from the 950 we had
guided to previously. With just 741 stores currently, we have many more years
of profitable, cash generating growth ahead.
Alongside this update to our long-term target, we also announced an
acceleration in our short-term opening programme, to at least 45 stores per
annum over a three-year period. During FY24, the first year of this programme,
we have opened 47 stores. Net of a small number of closures/replacements, we
finished the year with 741 stores, an increase in store numbers of c.5% versus
the start of the year.
The acceleration in our openings is under-pinned by the acquisition of up to
51 stores from Wilko. We moved rapidly as we carefully selected the stores we
wanted, renegotiated leases and are now opening these stores at speed. Many of
these stores are in new areas for B&M or are in catchments where we are
under-represented. Of the 25 B&M UK stores we opened in the fourth quarter
of FY24, 21 were former Wilko stores, and I am pleased to report that these
stores, in common with other new stores, are delivering strong sales
densities. We intend to maintain our momentum and in the first quarter of
FY25, also expect to open between 15 to 20 B&M UK stores, many of which
will be former Wilko stores.
The positive impact of the opening programme should be noted. A new store's
sales represent 100% volume growth, so over the next three years, this opening
programme will generate substantial additional volume. LFL(3) volume growth
will continue to increase total volume growth further.
LFL(3) sales growth will augment new store sales growth
Although our B&M UK fascia growth is pivoting to a higher proportion of
total volume growth being driven by new stores, this is not at the expense of
our LFL(3) growth performance. LFL(3) sales, from share gain and market growth
are expected to contribute to total volume growth going forward, as they
always have. We will maintain and improve availability and operational
disciplines and we will reward our local store managers for retail excellence
and hard work through our management incentive programmes. Our store managers
and team are responding exceptionally well.
We will remain highly disciplined in making sure our existing and new stores
are as good as they can be, with industry leading standards and pricing. Total
volume growth will help ensure we continue to drive substantial profit growth
and increased cash generation, and that volume growth will be driven by new
and existing stores. The combined benefit of these two channels of volume
growth is considerable.
Industry leading volume growth with disciplined cost control
Our sustained volume growth is improving our relationships with FMCG branded
suppliers by reinforcing our position as the fastest growing major customer
for many. It is also improving further our relationships with suppliers in the
Far East (where there is excess capacity) and this is helping drive increased
productivity as we increase our volume through a broadly unchanged
infrastructure.
Value creation in retail requires not only growing volume but also control of
the underlying cost base. Despite industry-wide cost headwinds, we work to
deliver on this fundamental aspect every day. We have faced challenges from
increases in the minimum wage and energy costs. But through our volume gains,
delivered by strong LFL(3) growth and through new store openings, we have been
able to weather these pressures and deliver a step change in our adjusted
EBITDA(1) (pre-IFRS 16) margin compared to pre-pandemic levels. Once again, I
reiterate our long-term margin guidance, which is to deliver adjusted
EBITDA(1) (pre-IFRS 16) margin for B&M UK between 12-13%, for B&M
France to grow over time above 10% and for Heron to stay above 6%.
Strategic actions underpin gross margin gains, while pricing remains market
leading
The step change in the adjusted EBITDA(1) margin has been achieved by
substantial sales growth (over 40% higher sales compared to 2020), through
strict cost control (head office size and distribution capacity are largely
unchanged) and through a managed increase in our gross margin as the business
has grown and evolved. Importantly, this improvement in the gross and adjusted
EBITDA(1) margin has been delivered against a strong and improved price
position.
Our gross margin has improved due to better buying prices and mix benefit. Key
driving factors include better store execution that captures incremental
margin-accretive product sales without increasing store costs. Our range
evolution and exiting categories such as big-ticket furniture and frozen food,
improves both sales densities and gross profit. We also leverage our
market-leading volume growth in branded FMCG products and Far East sourced
General Merchandise. These changes underpin the long-term EBITDA position.
France offers very significant potential
Our French business has operational momentum and we will continue to grow it
in a disciplined way, driving increased sales densities. Once again France
delivered strong LFL(3) growth, the number of openings increased and delivered
an adjusted EBITDA(1) (pre-IFRS 16) margin of 9.1%.
Moving forward, we will continue to deliver incremental volume growth from the
twin channels of new and existing stores. We will increase the rate of
openings in a disciplined way and will increase the FMCG range which will
drive footfall and LFL(3) sales growth further. Over the medium term, we
expect the adjusted EBITDA(1) (pre-IFRS 16) margin to reach at least 10% and
we will grow revenues with discipline.
The potential for store openings in France remains very high. France has a
similar sized population to the UK, where we have targeted at least 1,200
stores. The long-term number of stores in France remains a multiple of the 124
stores we operate today.
Heron Foods contributes well to the Group
Heron is our discount convenience format business and although it is a small
business, with just £560m turnover, its adjusted EBITDA(1) (pre-IFRS 16)
margin is sector leading. Heron's success is built upon differentiated
sourcing, strict cost control, targeted store footprints and excellent
retailing and logistics skills. There is cross fertilisation between Heron and
our other businesses, which helps us optimise our sales densities across the
Group.
We will continue to open around 20 Heron stores per year to deliver growth
from this programme as well as our existing estate.
Competitive position
The retail industry remains challenged by regulatory and macro pressures. In
the last 12 months a number of retailers have failed and a significant number
of others have issued one or more profit warnings. In this context, we
delivered increased profits and cash generation, and have this year exceeded
our "lockdown" peak of £626m adjusted EBITDA(1) (pre-IFRS 16). There are very
few companies which were "lockdown winners" and who have sustained their
competitive progress post-pandemic. In FY20, our adjusted EBITDA(1) (pre-IFRS
16) was £342m compared to £629m in FY24. In the last five years, we have
delivered 83.9% Group adjusted EBITDA(1) earnings growth - equivalent to an
annual compound earnings growth of over 12%. On top of this between FY21 to
FY24 we have returned £1.8bn of cash to our shareholders. If shareholders had
reinvested those dividends in our shares at the time the dividends were
returned, they would have seen the equivalent of an annual compound earnings
growth of over 17%.
The success of our new stores, our continued volume growth and improved sales
densities show that we are as competitive as ever and we have plenty of runway
ahead. The growth of discounting is a global trend and we remain a roll-out
opportunity into structural change. We will continue to take sales and market
share, but we will only ever do so in a disciplined and profitable manner.
Over the medium and longer term, future volume gains will help insulate us
against cost pressures in a way that most of our competition do not possess.
We remain a compounding, profitable, cash generating business with a platform
for future growth.
A thank you to our Chairman, the management team and to all colleagues
Later this year we will see our Chairman, Peter Bamford, retire after six
years. He has chaired the Group through some of the most uncertain times in
recent history and has overseen the transition from a founding CEO to me. He
has done this with an unerring view of what is right for all our stakeholders.
I wish to thank him for his unwavering support and guidance on both a personal
and professional basis. I wish Peter all the very best for the future, I have
thoroughly enjoyed working with him.
I would also like to extend my thanks to the broader management team and to
all of our colleagues. We have again delivered high quality results in a tough
retail market. We have been able to deliver these results thanks to the hard
work of the team - everyone from the shop floor upwards.
Alex Russo
Chief Executive Officer
4 June 2024
Notes:
1. Adjusted values are considered to be appropriate to exclude unusual,
non-trading and/or non-recurring impacts on performance which therefore
provides the user of the accounts with additional metrics to compare periods
of accounts. See notes 2, 3 and 4 of the financial statements for further
details.
2. Based on ordinary and special dividends paid in the years FY21 to
FY24.
3. One-year like-for-like revenues relate to the B&M UK estate only
(excluding wholesale revenues) and are based on either 53 week vs. 53 week or
14 week vs. 14 week comparison periods. They 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 FY23.
Financial review
New and existing stores driving volume growth
Group financial performance
£'m FY24 FY23 YoY Change
Revenue 5,484 4,983 10.1%
Adjusted EBITDA(1) (pre-IFRS 16) 629 573 9.7%
% 11.5% 11.5% (3) bps
Depreciation and amortisation (pre-IFRS 16) (82) (76) 6.9%
Operating profit impact of IFRS 16* 67 57 17.0%
Adjusted operating profit(1) 614 554 10.9%
Adjusting items(1) (7) (19) (63.3)%
Statutory profit before interest and tax 607 535 13.5%
Finance costs relating to right-of-use assets (69) (61) 13.8%
Other net finance costs (40) (38) 3.3%
Statutory profit before tax 498 436 14.1%
*includes depreciation on right-of-use assets of £176m - FY24 total
depreciation & amortisation was £258m (FY23: £242m)
The current accounting period represents the 53 weeks trading to 30 March 2024
("FY24") and the comparative period represents the 52 weeks to 25 March 2023
("FY23").
Group revenues in FY24 increased by 10.1% year-on-year ("YoY"), (+10.1% on a
constant currency basis(2)), driven by volume growth and positive
like-for-like(3) ("LFL") performance across the three businesses.
The extra week in the FY24 trading period relative to FY23 added 2.3% to Group
revenue growth YoY whilst also benefitting from higher trading due to the
early Easter timing. This seasonal Easter trading benefit will not occur in
FY25 as a result.
Group adjusted EBITDA(1) (pre-IFRS 16) increased by 9.7% to £629m (FY23:
£573m), representing a margin of 11.5% (FY23: 11.5%). This reflects volume
led revenue growth, with the cost leverage and productivity gains of higher
transaction numbers helping reduce cost-to-sell percentages. Group adjusted
operating costs on an underlying basis(1,6) decreased as a % of revenues from
25.5% to 25.4%.
Group adjusted operating profit(1) increased by 10.9% moving in line with the
above. We have continued to invest in our store estate and have 60 net more
stores across the Group, as such total depreciation and amortisation increased
by 6.4%.
The extra week added £13m to Group adjusted EBITDA(1) (pre-IFRS 16) and £12m
to Group adjusted operating profit(1).
Fascia overview
B&M UK
In the B&M UK fascia(4) business, total revenues increased by 8.5% to
£4,410m (FY23: £4,067m), with LFL(3) revenues up 3.7%. This was underpinned
by volume growth driven from our new store opening programme and positive LFL
customer transactions.
LFL(3) revenues grew in every quarter YoY. The first half of the year saw LFL
revenues up 6.2%, split between 9.2% in Q1 and 3.1% in Q2. Against relatively
more challenging comparatives, LFL revenues maintained their positive trend
across the second half seeing 0.6% growth in Q3 and 2.9% in Q4. We are pleased
to see an increase in LFL(3) customer transaction numbers and our sales
participation between FMCG and General Merchandise remains balanced and in
line with our expectations.
B&M UK LFL(3) revenue reconciliation
£m 2024 2023 1-year
Change
Like-for-like(3) revenue (53 weeks basis) 4,843 4,672 3.7%
LFL(3) sales recorded in week 1 of FY24 - (85)
Online trial - 6
New stores after Mar 25 2023 140 -
New stores prior Mar 25 2023 133 53
Closed stores 1 59
Gross Segment Revenue 5,117 4,705
VAT/Commission income (737) (675)
Wholesale revenues 30 37
B&M UK Revenue 4,410 4,067 8.5%
There were 47 gross new store openings in the year. More than half of our
store openings came in the fourth quarter, with 21 of these being former Wilko
stores. We are pleased with the early performance of these stores along with
all other new store openings in the year.
B&M UK revenues also included £30m of wholesale revenues (FY23: £37m).
The majority of wholesale sales are to our associate Centz Retail Holdings
Limited, a chain of 53 variety goods stores in the Republic of Ireland, which
increased its proportion of FMCG sourcing from within the EU market.
Our trading gross margin(5) rose 46 bps year-on-year to 36.3% from 35.8%.
This reflected a reduction in freight rates and strong sell-through across
both FMCG and General Merchandise, resulting in largely only planned markdown
activity this year. Statutory gross margin increased 120 bps to 36.9% from
35.7%, benefitting from favourable foreign exchange hedge accounting in the
current year and non-recurring storage costs recorded in the comparative.
Adjusted operating costs on an underlying basis(1,6) were well controlled
representing 24.0% of revenues compared to 24.4% in the prior year. Given the
9.7% increase in the national living wage hourly rate that was absorbed in the
period, this reduction in our cost to sell percentage reflects cost leverage
and productivity gains from sales volume growth, together with a continued
focus on cost discipline.
We are an everyday low-cost retailer that operates with a low fixed cost base
and double digit adjusted operating profit margins. This operating model
allows us to benefit materially from volume growth from either new store
openings or like-for-like(3) trading. It is total volume growth that
leverages our central cost base, offsetting inflationary impacts, and results
in an increase in operating profits at the sustainable 12-13% adjusted
EBITDA(1) and adjusted operating profit(1) margins that we consistently guide
to.
Adjusted EBITDA(1) (pre-IFRS 16) increased by 10.5% to £556m (FY23: £503m),
with margin increasing by 23 bps to 12.6% (FY23: 12.4%) and demonstrating the
benefit of volume-driven revenue growth. Adjusted operating profit(1) was
£548m (FY23: £498m) with a margin of 12.4% (FY23: 12.3%).
Statutory profit before interest and tax for the year was £548m (FY23:
£498m).
B&M France
Total revenues increased by 19.2% to £514m (FY23: £431m). The business
continues to improve sales densities - with the majority of the LFL revenue
growth performance being driven by positive customer transaction numbers.
It has been another disciplined and controlled year of store openings with 11
gross new store openings and one relocation. All new stores are performing
in line with or above our assumptions and continue to demonstrate the
potential for the B&M brand to trade effectively in a wide range of
geographies and formats.
Adjusted operating expenses on an underlying basis(1,6) as a % of revenues
reduced from 35.9% to 35.3% reflective of cost leverage from increased sales
volumes.
Adjusted EBITDA(1) (pre-IFRS 16) increased to £47m (FY23: £41m) representing
an adjusted EBITDA(1) margin of 9.1% (FY23: 9.6%). This is a 64 bps increase
compared to an underlying margin of 8.5% in FY23, which excludes c.£5m of
one-off government support received at the start of the prior period, as
previously reported. Adjusted operating profit(1) was £49m (FY23: £38m) with
a margin of 9.5% (FY23: 8.8%).
Statutory profit before interest and tax for the year was £49m (FY23: £38m).
Heron Foods
Total revenues grew by 15.3% to £560m (FY23: £485m) representing another
excellent year. We remain committed to offering our customers convenient,
great value and quality products at a competitive price point. We continue to
see an increase in both LFL(3) customer transactions and basket value
year-on-year.
There were 20 gross new store openings in the year with one relocation and
three closures.
Adjusted operating expenses(1) as a % of revenues reduced from 26.1% to 25.4%.
Adjusted EBITDA(1) (pre-IFRS 16) increased by 21.3% to £36m (FY23: £30m), a
result that is testament to the execution and cost control demonstrated by the
Heron team. Our margin of 6.4% (FY23: 6.1%) is sector leading. Adjusted
operating profit(1) was £27m (FY23: £19m) with a margin of 4.9% (FY23:
3.8%).
Statutory profit before interest and tax for the year was £27m (FY23: £19m).
Adjusting items and central charges
£m 2024 2023
Profit before interest & tax 607 535
Costs in relation to the acquisition of Wilko stores 9 -
Online trial - 2
Fair value of ineffective derivatives (2) 17
Foreign exchange on intercompany balances 0 0
Adjusted operating profit(1) 614 554
Adjusting items are excluded from our adjusted EBITDA(1) (pre-IFRS 16) and
adjusted operating profit performance by virtue of their size and nature to
provide a helpful perspective of the year-on-year performance of the Group.
Further detail on adjusting items can be found in note 3, starting on page 120
of the financial statements.
The growth in profit before interest and tax has moved in line with segmental
trading offset partially by central charges within the corporate segment,
including the management retention bonus accrual for the Group Trading
Director, the Wilko acquisition costs and listing costs for our Luxembourg
corporate entity.
Net finance costs
Adjusted net finance charges(1) for the year, excluding IFRS 16, were £44m
(FY23: £38m) due to increased rates on our new debt facilities. This included
bank and high yield bond interest of £47m (FY22: £38m) and amortised fees of
£2m (FY23: £2m).
The interest charge relating to lease liabilities under IFRS 16 was £69m
(FY23: £61m).
Group tax
The tax charge in FY24 was £131m (FY23: £88m), primarily reflecting an
increase in the UK corporation tax rate from 19% to 25%, effective from 1
April 2023, as well as due to an increase in profits year-on-year.
As a Group, we are committed to paying the right tax in the territories in
which we operate. The B&M UK business paid taxes totalling £653m in FY24,
including £234m relating to those taxes borne directly by the company such as
corporation tax, customs duties, business rates, employer's national insurance
contributions and stamp duty and land taxes. The balance of £419m are taxes
we collect from customers and employees on behalf of the UK Exchequer, which
includes Value Added Tax, Pay As You Earn and employee national insurance
contributions.
Profit after tax and earnings per share
Statutory profit after tax was £367m (FY23: £348m) and the statutory diluted
earnings per share was
36.5p (FY23: 34.7p).
Adjusted profit after tax(1) (pre-IFRS 16), which is also reported to allow
investors to aid their understanding on the operating performance of the
business (see note 3 of the financial statements), was £370m (FY23: £366m),
and the adjusted fully diluted earnings per share(1) was 36.8p (FY23: 36.5p).
Capital expenditure
Group net capital expenditure(7) totalled £124m this year (FY23: £87m).
Investment included £59m spent on 78 gross new stores across the Group's
fascias (FY23: £33m on 42 stores) and £27m on infrastructure projects to
support the continued growth of the business (FY23: £16m). There was also
investment of £34m on maintenance works to ensure that our existing store
estate and distribution centres are appropriately invested (FY23: £40m).
There was also a net expenditure of £4m relating to one freehold acquisition
(FY23: net expenditure of £(1)m).
Post-tax free cash flow(8) and net debt(9,10)
Post-tax free cash flow(8) of £382m (FY23: £464m), represents a reduction
YoY caused by higher tax payments and increased capital expenditure due to the
store opening programme.
The Group continues to be highly cash generative with our inventory levels
flat year-on-year despite higher revenues. The strong performance and cash
generation have enabled the Group to pay dividends totalling £348m in FY24.
This includes a £201m special dividend paid(11) in February 2024.
There has been a step change in the revenues and profit performance of the
Group since the pandemic. During the four financial periods FY21 to FY24, we
grew Group adjusted EBITDA(1) from £342m (FY20) to £629m (FY24), generated
cumulative operating cashflow of £3.3bn and distributed £1.8bn in cash to
shareholders demonstrating our consistent disciplined approach to capital
returns and shareholder value creation.
The Board adopted a long-term capital allocation policy in 2016 to provide a
framework to help investors understand how the Group will evaluate
opportunities to invest and support the growth of the business relative to
incremental return of capital to shareholders.
Net debt(9) (excluding IFRS 16 lease liabilities), increased to £737m (FY23:
£724m). The net debt(9) to adjusted EBITDA(1) (excluding IFRS 16 lease
liabilities) leverage ratio was 1.2x (FY23: 1.3x). Net debt(10) (including
IFRS 16 lease liabilities) was £2,094m (FY23: £2,025m) meaning our net debt
to adjusted EBITDA(1) ratio was 2.4x, a decrease on the previous year (FY23:
2.5x).
Dividends
During the year, the Company declared and paid an interim ordinary dividend of
5.1p(11) per share in addition to a special dividend of 20.0p(11) per share.
Subject to approval by shareholders at the AGM on 23 July 2024, a final
ordinary dividend of 9.6p(11) per share will be paid on 2 August 2024 to
shareholders on the register of the Company at the close of business on 28
June 2024. The ex-dividend date will be 27 June 2024.
The Group has a dividend policy which targets an ordinary dividend pay-out
ratio of between 30% to 40% of net income on a normalised tax basis. The Group
generally aims to pay the interim and final dividends for each financial year
in proportions of approximately one-third and two-thirds of the total annual
ordinary dividend respectively.
Mike Schmidt
Chief Financial Officer
4 June 2024
Notes:
1. Adjusted values are considered to be appropriate to exclude unusual,
non-trading and/or non-recurring impacts on performance which therefore
provides the user of the accounts with additional metrics to compare periods
of accounts. See notes 2, 3 and 4 of the financial statements for further
details.
2. 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.
3. One-year like-for-like revenues relate to the B&M UK estate only
(excluding wholesale revenues) and are based on either 53 week vs. 53 week or
14 week vs. 14 week comparison periods. They 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 FY23.
4. References in this announcement to the B&M UK business include
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 include
both the Heron Foods fascia and B&M Express fascia convenience stores in
the UK.
5. 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 increased 120 bps from 35.7% to 36.9%, 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.
6. Adjusted operating expenses on an underlying basis excludes foreign
exchange, one-off income, depreciation and amortisation. This adjusted measure
is considered a more meaningful metric to the users of the accounts as this is
the cost base used by management to commercially monitor performance. Group
non-underlying items include B&M UK's foreign exchange losses in relation
to derivative adjustments of £12m (FY23: £40m gain) and one off income
received in France at the start of the prior year which amounted to £5m.
Group adjusted operating costs, excluding depreciation and amortisation, as a
% of revenues increased to 25.6% from 24.6%.
7. Net capital expenditure includes the purchase of property, plant and
equipment, intangible assets and proceeds from the sale of any of those items.
These exclude IFRS 16 lease liabilities.
8. Post-tax free cash flow is an Alternative Performance Measure. Please
see note 3 of the financial statements for more details and reconciliation to
the Consolidated statement of cash flows. Statutory Group cash generated from
operations was £862m (FY23: £866m). This statutory definition excludes
payments for leased assets including the leasehold property estate.
9. Net debt comprises interest-bearing loans and borrowings, and cash
and cash equivalents. Net debt was £737m at the period end, reflecting £919m
as the value of gross debt netted against £182m of cash. See Notes 18, 21
and 28 of the financial statements for more details.
10. Net debt including lease liabilities is the above plus the current and
non-current lease liabilities recorded on the Consolidated statement of
financial position
11. Dividends are stated as gross amounts before deduction of Luxembourg
withholding tax which is currently 15%.
Consolidated Statement of Comprehensive Income
Period ended 53 weeks ended
30 March 2024 52 weeks ended
25 March 2023
Note £'m £'m
Revenue 2 5,484 4,983
Cost of sales (3,449) (3,182)
Gross profit 2,035 1,801
Administrative expenses (1,427) (1,265)
Operating profit 5 608 536
Share of losses in associates 12 (1) (1)
Profit on ordinary activities before net finance costs and tax 607 535
Finance costs on lease liabilities 6 (69) (61)
Other finance costs 6 (50) (40)
Finance income 6 10 2
Profit on ordinary activities before tax 498 436
Income tax expense 10 (131) (88)
Profit for the period 2 367 348
Other comprehensive income for the period
Items which may be reclassified to profit and loss:
Exchange differences on retranslation of subsidiary and associate investments (3) 5
Fair value movement as recorded in the hedging reserve (22) 28
Tax effect of other comprehensive income 10 1 5
Total other comprehensive income (24) 38
Total comprehensive income for the period 343 386
Earnings per share
Basic earnings per share attributable to ordinary equity holders (pence) 11 36.6 34.8
Diluted earnings per share attributable to ordinary equity holders (pence) 11 36.5 34.7
All profit and other comprehensive income is attributable to the owners of the
parent.
The accompanying accounting policies and notes form an integral part of these
consolidated financial statements.
Consolidated Statement of Financial Position
Note 30 March Restated*
2024 25 March
As at 2023
Assets £'m £'m
Non-current
Goodwill 13 921 921
Intangible assets 13 121 120
Property, plant and equipment 14 421 380
Right-of-use assets 15 1,101 1,056
Investments in associates 12 5 8
Other receivables 17 5 6
Other financial assets 20 1 -
Deferred tax asset 10 4 4
2,579 2,495
Current assets
Cash at bank and in hand 18 182 237
Inventories 16 776 764
Trade and other receivables 17 76 52
Income tax receivable 8 12
Other financial assets 20 4 1
1,046 1,066
Total assets 3,625 3,561
Equity
Share capital 23 (100) (100)
Share premium (2,481) (2,478)
Retained earnings (125) (104)
Hedging reserve 10 3
Legal reserve (10) (10)
Merger reserve 1,979 1,979
Foreign exchange reserve (7) (10)
(734) (720)
Non-current liabilities
Interest-bearing loans and borrowings 21 (881) (873)
Lease liabilities 15 (1,187) (1,124)
Deferred tax liabilities 10 (25) (17)
Other financial liabilities 20 (0) -
Provisions 22 (4) (3)
(2,097) (2,017)
Current liabilities
Interest-bearing loans and borrowings 21 (29) (81)
Trade and other payables 19 (572) (541)
Lease liabilities 15 (170) (177)
Other financial liabilities 20 (10) (13)
Income tax payable (7) (6)
Provisions 22 (6) (6)
(794) (824)
Total liabilities (2,891) (2,841)
Total equity and liabilities (3,625) (3,561)
* The statement of financial position has been restated in 2023 to reflect a
change in the presentation of deferred tax, see note 1 for further details.
The accompanying accounting policies and notes form an integral part of these
consolidated financial statements. This Consolidated statement of financial
position was approved by the Board of Directors and authorised for issue on 4
June 2024 and signed on their behalf by:
Alejandro Russo, Chief Executive Officer.
Consolidated Statement of Changes in Shareholders' Equity
Share capital Share Retained Hedging Legal Merger Foreign Total
premium earnings reserve reserve reserve exchange equity
reserve
£'m £'m £'m £'m £'m £'m £'m £'m
Balance at 26 March 2022 100 2,476 121 13 10 (1,979) 5 746
Allocation to legal reserve - - (0) - 0 - - -
- - (165) - - - - (165)
Ordinary dividends declared
Special dividends declared - - (201) - - - - (201)
Effect of share options 0 2 1 - - - - 3
Total transactions with owners 0 2 (365) - - - - (363)
Profit for the period - - 348 - - - - 348
Other comprehensive income - - - 33 - - 5 38
Total comprehensive income for the period - - 348 33 - - 5 386
Hedging gains & losses reclassified as inventory - - - (49) - - - (49)
Balance at 25 March 2023 100 2,478 104 (3) 10 (1,979) 10 720
Ordinary dividends declared - - (147) - - - - (147)
Special dividends declared - - (201) - - - - (201)
Effect of share options 0 3 1 - - - - 4
Total transactions with owners 0 3 (347) - - - - (344)
Profit for the period - - 367 - - - - 367
Other comprehensive income - - 1 (22) - - (3) (24)
Total comprehensive income for the period - - 368 (22) - - (3) 343
Hedging gains & losses reclassified as inventory - - - 15 - - - 15
Hedging gains and losses reclassified as finance costs - - - 0 - - - 0
Balance at 30 March 2024 100 2,481 125 (10) 10 (1,979) 7 734
The accompanying accounting policies and notes form an integral part of these
consolidated financial statements.
Consolidated Statement of Cash Flows
Period ended 53 weeks ended 30 March 52 weeks ended 25 March
2024 2023
Note £'m £'m
Cash flows from operating activities
Cash generated from operations 24 862 866
Income tax paid (116) (84)
Net cash flows from operating activities 746 782
Cash flows from investing activities
Purchase of property, plant and equipment 14 (123) (93)
Purchase of intangible assets 13 (3) (5)
Proceeds from sale of property, plant and equipment 2 9
Finance income received 6 5 2
Dividend income from associates 12 1 -
Net cash flows from investing activities (118) (87)
Cash flows from financing activities
Receipt of Group revolving credit facilities 21 25 -
Repayment of old bank loan facilities 21 (300) -
Receipt of new bank loan facilities 21 225 -
Repayment of corporate bonds 21 (239) -
Receipt due to newly issued corporate bonds 21 250 -
Repayment of Heron facilities 21 - (3)
Net receipt of French facilities 21 3 -
Repayment of the principal in relation to lease liabilities 15 (171) (168)
Payment of interest in relation to right-of-use assets 15 (69) (61)
Fees on refinancing 21 (15) -
Other finance costs paid 6 (41) (36)
Dividends paid to owners of the parent 30 (348) (366)
Net cash flows from financing activities (680) (634)
Effects of exchange rate changes on cash and cash equivalents (3) 3
Net (decrease)/increase in cash and cash equivalents (55) 64
Cash and cash equivalents at the beginning of the period 237 173
Cash and cash equivalents at the end of the period 182 237
Cash and cash equivalents comprise:
Cash at bank and in hand 18 182 237
182 237
The accompanying accounting policies and notes form an integral part of these
consolidated financial statements.
Notes to the Consolidated Financial Statements
1 General information and basis of preparation
The consolidated financial statements have been prepared in accordance with EU
IFRS.
The Group's trade is general retail, with continuing trading taking place in
the UK and France. The Group has been listed on the London Stock Exchange
since June 2014.
The financial statements set out below does not constitute the Group's
statutory accounts for the 53 weeks ended 30 March 2024 or 52 weeks ended 25
March 2023 but is derived from those accounts. Statutory accounts for the 52
weeks ended 25 March 2023 have been delivered to the Luxembourg Business
Register, and those for the 53 weeks to 30 March 2024 will be delivered in due
course. The auditor has reported on those accounts; their reports were (i)
unqualified and (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their reports.
Copies of full accounts will be sent to shareholders in due course. Additional
copies will be available from our registered office at 3, rue Gabriel
Lippmann, L-5365 Luxembourg Grand-Duchy of Luxembourg or online at
www.bandmretail.com.
The consolidated financial statements have been prepared under the historical
cost convention as modified by the revaluation of financial assets and
financial liabilities at fair value through profit or loss. The measurement
basis and principal accounting policies of the Group are set out below and
have been applied consistently throughout the consolidated financial
statements.
The consolidated financial statements are presented in pounds sterling and all
values are rounded to the nearest million (£'m), except when otherwise
indicated.
The consolidated financial statements cover the 53-week period from 26 March
2023 to 30 March 2024 which is a different period to the parent company
standalone accounts (from 1 April 2023 to 31 March 2024). This exception is
permitted under article 1712-12 of the Luxembourg company law of 10 August
1915, as amended, because the Directors believe that;
· the consolidated financial statements are more informative when they
cover the same period as used by the main operating entity, B&M Retail
Ltd; and
· it would be unduly onerous to rephase the year end in that subsidiary
to match that of the parent company.
The year end for B&M Retail Ltd, in any year, will not be more than six
days prior to the parent company year end. The next accounting period for the
Group will be a 52-week period, from 31 March 2024 to 29 March 2025.
B&M European Value Retail S.A. (the "Company") is at the head of the Group
and there is no consolidation that takes place above the level of this
company.
The principal accounting policies of the Group are set out below.
Restatement of the Consolidated statement of financial position
Following the amendments made to IAS 12 'Income Taxes' by the IASB in the
paper 'Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12', the Group has restated it's deferred tax
balances which arise from the differences between our statutory reporting and
local tax treatment of leases.
Under the amendments the Group is required to separately record deferred tax
assets and deferred tax liabilities on each component of the overall balance
sheet difference, where previously the Group had reported a net position. So,
for any one lease there will be a separate deferred tax asset relating to the
difference arising from the lease liability, and a separate deferred tax
liability relating to the difference arising from the right-of-use asset.
This has resulted in a change in the presentation of the balances that
comprise our deferred tax asset and liability in note 10, Tax, where we break
out the prior year balance previously described as Temporary differences
relating to the tax accounting for leases at an asset value of £24m, into two
separate balances as follows;
As restated
£'m
Temporary differences relating to the tax accounting for leases (asset) 93
Temporary differences relating to the tax accounting for leases (liability) (69)
In carrying out this review it was also noted that under IAS 12 the Group
should net deferred tax assets and liabilities where we have a legally
enforceable right to do so and where they relate to income taxes levied by the
same tax authority. This has resulted in a restatement to our Consolidated
statement of financial position as follows;
As previously reported As restated
£'m £'m
Deferred tax asset 30 4
Deferred tax liability (43) (17)
As the restatement is a net-off of the deferred tax asset and deferred tax
liability position, the net position remains unchanged. As such, there is no
impact on the Consolidated statement of comprehensive income, Consolidated
statement of changes in shareholders' equity or the Consolidated statement of
cash flows.
Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertakings, together with the Group's share of
the net assets and results of associated undertakings, for the period from 26
March 2023 to 30 March 2024. Acquisitions of subsidiaries are dealt with by
the acquisition method of accounting. The results of companies acquired are
included in the Consolidated statement of comprehensive income from the
acquisition date.
Control is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
· power over the investee (i.e. existing rights that give it the current
ability to direct the relevant activities of the investee);
· exposure, or rights, to variable returns from its involvement with the
investee; and
· the ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an
investee, the Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
· the contractual arrangements with the other vote holders of the
investee;
· rights arising from other contractual arrangements; and
· the Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the
Group ceases to control the subsidiary, excluding the situations as outlined
in the basis of preparation.
Going concern
As a value retailer, the Group is well placed to withstand volatility within
the economic environment. The Group's forecasts and projections, taking into
account reasonably possible changes in trading performance, show that the
Group will trade within its current banking facilities.
In adopting the going concern basis for preparing the financial statements,
the Directors have considered the business activities including the Group's
principal risks and uncertainties. The Board also considered the Group's
current cash position, the repayment profile of its obligations, its financial
covenants and the resilience of its 12-month cash flow forecasts to a series
of severe but plausible downside scenarios. Having considered these factors
the Board is satisfied the Group has adequate resources to continue its
successful growth (see also the going concern and viability statements in the
'Principal risks and uncertainties' section of this annual report).
There have been no significant post balance sheet changes to liquidity.
Consequently, the Directors are confident that the Group and Company will have
sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Revenue
Under IFRS 15 Revenue is recognised when all the following criteria are met:
· the parties to the contract have approved the contract;
· the Group can identify each parties rights regarding the goods to be
transferred;
· the Group can identify the payment terms;
· the contract has commercial substance; and
· it is probable that the Group will collect the consideration we are
entitled to in respect to the goods to be transferred.
In the vast majority of cases the Group's sales are made through stores and
the control of goods is immediately transferred at the same time as the
consideration is received via our tills. Therefore, revenue is recognised at
this point.
The Group sells a small quantity of gift vouchers for use in the future and,
as such, a small amount of deferred revenue is recognised. At the period end,
the value held on the balance sheet was <£1m (2023: <£1m).
The Group operates a small wholesale function which recognises revenue when
goods are delivered and an invoice is raised. The revenue is considered
collectable as the Group's wholesale customers are usually related parties to
the Group (such as our associates) or are subject to credit checks before
trade takes place. See note 2 for the split of wholesale sales to store sales.
Revenue is the total amount receivable by the Group for goods supplied, in the
ordinary course of business, excluding VAT and trade discounts, and after
deducting returns and relevant vouchers and offers.
Administrative expenses
Administrative expenses include all running costs of the business, except
those relating to inventory (which are expensed through cost of sales), tax,
interest and other comprehensive income. Transport and warehouse costs are
included in this caption.
Elements which are unusual and significant, such as material restructuring
costs, may be separated as a line item.
Goodwill
Goodwill is initially measured at cost, being the excess of the fair value of
consideration transferred over the fair value of the net identifiable assets
acquired and liabilities assumed at the date of acquisition.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date, allocated to the
relevant cash-generating units (CGUs) that are expected to benefit from the
combination.
The CGUs are individual stores and the groups of CGUs are the store portfolios
in each operational segment.
Goodwill is tested for impairment at least once per year and specifically at
any time where there is any indication that it may be impaired. Internally
generated goodwill is not recognised as an asset.
Segment reporting
Operating segments are reported in a manner consistent with internal reporting
provided to the chief operating decision maker. The chief operating decision
maker has been identified as the Executive Directors of the Group. The
Executive Directors are responsible for assessing the performance of the
business for the purpose of making decisions about resources to be allocated.
Alternative performance measures
The Group reports a selection of alternative performance measures (APMs) as
detailed below and in note 3, as the Directors believe that these measures
provide additional information that is useful to the users of our accounts.
The APMs we report in these accounts are:
· Earnings before interest, tax, depreciation and amortisation (EBITDA)
· Adjusted EBITDA
· Adjusted operating profit
· Adjusted profit
· Adjusted earnings per share (EPS)
· Post-tax free cash flow
To aide comparability with the figures presented in previous periods, pre-IFRS
16 versions of these APMs have also been calculated, where appropriate.
Interest, tax, depreciation and amortisation are as defined statutorily whilst
the items we adjust for are those we consider not to be reflective of the
underlying performance of the business as detailed in note 3. These
adjustments include the fair value and foreign exchange impact of derivatives
yet to mature, that have not been designated as part of a hedge accounting
relationship, foreign exchange on intercompany balances, which do not relate
to underlying trading, and costs incurred in relation to significant projects,
which are non-recurring and do not relate to underlying trading.
Underlying performance has been determined so as to align with how the Group
financial performance is monitored on an ongoing basis by management. In
particular, this reflects certain adjustments being made to consider an
adjusted operating profit measure of performance.
Adjusted finance costs reflect the ongoing charges associated with our debt
structure and exclude one-off effects of refinancing.
The Directors believe that our adjusted APMs provide users of the account with
measures of performance which are appropriate to the retail industry and
presented by peers and competitors. Adjusted values are considered to be
appropriate to exclude unusual, non-trading and/or non-recurring impacts on
performance which therefore provides the user of the accounts with an
additional metric to compare periods of account.
The APMs used are not measures of performance or liquidity under IFRS and
should not be considered in isolation or as a substitute for measures of
profit, or as an indicator of the Group's operating performance or cash flows
from operating activities as determined in accordance with IFRS.
Brands
Brands acquired by the business are amortised if the corresponding agreement
is specifically time limited, or if the fair valuation exercise (carried out
for brands acquired via business combinations) identifies a fair lifespan for
the brand. This amortisation is charged to administrative expenses.
Otherwise, brands are considered to have an indefinite life on the basis that
they form part of the CGUs within the Group which will continue in operation
indefinitely, with no foreseeable limit to the period over which they are
expected to generate net cash inflows.
Where brands are considered to have an indefinite life they are reviewed at
least annually for impairment or whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset exceeds its recoverable amount (i.e. the
higher of value in use and fair value less costs to sell), the asset is
impaired accordingly with the impairment charged to administration expenses.
Intangible assets
Intangible assets acquired separately, including computer software, are
measured on initial recognition at cost comprising the purchase price and any
directly attributable costs of preparing the asset for use.
Following initial recognition, assets are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation begins when an
asset is available for use and is calculated on a straight-line basis to
allocate the cost of the asset over its estimated useful life as follows:
Computer software acquired -
3 or 4 years
Amortisation method, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation
and accumulated impairment losses.
Cost comprises purchase price and directly attributable costs. Unless
significant or incurred as part of a refit programme, subsequent expenditure
will usually be treated as repairs or maintenance and expensed to the
statement of comprehensive income.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognised.
Depreciation
Freehold land is not depreciated. For all other property, plant and equipment,
depreciation is calculated on a straight-line basis to allocate cost, less
residual value of the assets, over their estimated useful lives as follows:
Leasehold buildings - Life of lease
(max 50 years)
Freehold buildings - 2% - 4%
straight line
Plant, fixtures and equipment - 10% - 33% straight line
Motor vehicles - 12.5% -
33% straight line
Residual values and useful lives are reviewed annually and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the statement of comprehensive income when the asset is
derecognised.
Leases
The Group applies the leasing standard, IFRS 16, to all contracts identified
as leases at their inception, unless they are considered a short-term lease
(with a term less than a year) or where the asset is of a low underlying value
(<£5k). Assets which may fall into these categorisations include printers,
vending machines and security cameras, and the lease expense is within
administrative expenses.
The Group has lease contracts in relation to property, equipment, fixtures
& fittings and vehicles. A contract is classified as a lease if it conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration.
When a lease contract is recognised, the business assesses the term for which
we are reasonably certain to hold that lease, and the minimum lease payments
over that term are discounted to give the initial lease liability. The initial
right-of-use asset is then recognised at the same value, adjusted for
incentives or payments made on the day that the lease was acquired. Any
variable lease costs are expensed to administrative costs when incurred.
The date that the lease is brought into the accounts is the date from which
the lease has been effectively agreed by both parties as evidenced by the
Group's ability to use that property.
The right-of-use asset is subsequently depreciated on a straight-line basis
over the term of that lease, or useful life (whichever is shorter) with the
charge being made to administrative costs. The lease liability attracts
interest which is charged to finance costs, and is measured at amortised cost
using the effective interest method.
Right-of-use assets may be impaired if, for instance, a lease becomes onerous.
Impairment costs are charged to administrative costs.
Lease modifications are recorded where there is a change in the expected
cashflows associated with a lease, such as through a rent review. When a lease
modification occurs the lease liability is recalculated and an equivalent
adjustment is made to the right-of-use asset, unless that asset would be
reduced below zero, in which case the excess is expensed in administrative
costs. The recalculation is carried out with an unchanged discount unless the
change has affected management's assessment of the term of the lease.
If there is a significant event, such as the lease reaching its expiry date,
the likely exercise of a previously unrecognised break clause, or the signing
of an extension lease, the lease term is re-assessed by management as to how
long we can reasonably stay in that property, and a new lease agreement or
modification (if the change is made before the expiry date) is recognised for
the re-assessed term, with a recalculated discount rate.
Lease modifications are also recorded where there is a change in the expected
cashflows associated with the lease, such as through a rent review. Unless the
change affects the term, the discount rate is not recalculated. A lease
modification results in a recalculation of the lease liability with a
corresponding adjustment made to the right-of-use asset.
The discount rate used is individual to each lease. Where a lease contract
includes an implicit interest rate, that rate is used. In the majority of
leases this is not the case and the discount rate is taken to be the
incremental borrowing rate as related to that specific asset. This is a
calculation based upon the external market rate of borrowing for the Group, as
well as several factors specific to the asset to be discounted.
The Group separates lease payments between lease and non-lease components
(such as service charges on property) at the point at which the lease is
recognised. Non-lease components are charged through administrative expenses.
Sale and leaseback transactions
The Group recognises a sale and leaseback transaction when the Group sells an
asset that has been previously recognised in property, plant and equipment,
and subsequently leases it back as part of the same or a linked transaction.
Management use the provisions of IFRS 15 to assess if a sale has taken place,
and the provisions of IFRS 16 to recognise the resulting lease, with the
liability and discount rate calculated in line with our lease policy and the
asset subject to an adjustment based upon the net book value of the disposed
asset, the opening lease liability, the consideration received and the fair
value of the asset on the date it was sold.
Resulting gains or losses are recognised in administrative expenses.
Onerous leases
A lease is considered onerous when the economic benefits of occupying the
leased properties are less than the obligations payable under the lease.
When a lease is classified as onerous, the right-of-use asset associated with
the lease is impaired to £nil value and non-rental costs that are likely to
accrue before the end of the contract are provided against.
Investments in associates
Associates are those entities over which the Group has significant influence,
but which are neither subsidiaries nor interests in joint ventures.
Investments in associates are recognised initially at cost and subsequently
accounted for using the equity method. However, any goodwill or fair value
adjustment attributable to the Group's share of associates is included in the
amount recognised as investment in associates.
All subsequent changes to the share of interest in the equity of the associate
are recognised in the Group's carrying amount of the investment, including a
reduction in the carrying amount equal to any dividend received. Changes
resulting from the profit or loss generated by the associate are reported in
"share of profits/(losses) of associates" in the Consolidated statement of
comprehensive income and therefore affect net results of the Group. These
changes include subsequent depreciation, amortisation and impairment of the
fair value adjustments of assets and liabilities.
Items that have been recognised directly in the associate's other
comprehensive income are recognised in the consolidated other comprehensive
income of the Group. However, when the Group's share of losses in an associate
equals or exceeds its interest in the associate, the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf
of the associate. If the associate subsequently reports profits, the investor
resumes recognising its share of those profits only after its share of the
profits equals the share of losses not recognised.
Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group's interest in the associates. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the consolidated
financial statements of associates have been adjusted where necessary to
ensure consistency with the accounting policies adopted by the Group.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required (for goodwill or indefinite life assets), the
Group estimates the asset's recoverable amount.
The Group bases its impairment calculation on detailed budgets and forecasts
which are prepared separately for each of the Group's cash-generating units
(CGUs) to which the individual assets are allocated. These budgets and
forecast calculations are prepared in December and usually cover a period of
five years. For longer periods, a long-term growth rate is calculated and
applied to the projected future cash flows after the fifth year. The Group's
three-year plan is usually approved in March. If due to the passage of time
there are significant differences in the key assumptions between the forecast
and plan, or if management consider that the forecast has a more sensitive
level of headroom, then the impairment test will be additionally sensitised to
the plan assumptions.
Indications of impairment might include (for goodwill and the brand assets,
for instance) a significant decrease in the like-for-like sales of established
stores, sustained negative publicity or a drop off in visits to our website
and social media accounts.
An asset's recoverable amount is the higher of an assets or CGUs fair value
less costs to sell and its value in use. It is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or
CGU.
Impairment losses of continuing operations are recognised in the statement of
comprehensive income in those expense categories consistent with the function
of the impaired asset.
For assets excluding goodwill and acquired brands with indefinite lives, an
assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the Group estimates the assets
or CGUs recoverable amount.
A previously recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset's recoverable amount
since the last impairment loss was recognised. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable amount, nor
exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the statement of comprehensive income,
except for impairment of goodwill which is not reversed.
Inventories
Inventories are stated at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items, using the weighted
average method.
Stock purchased in foreign currency is booked in at the hedge rate applicable
to that stock (if effectively hedged) or the underlying foreign currency rate
on the date that the item is brought into stock.
Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs to sell. Transport, warehouse and distribution
costs are not included in inventory.
The Group receives supplier rebates which are included in the cost of
inventory balance (and which therefore ultimately flow through to cost of
sales). These rebates are recognised on an accruals basis according to actual
sales levels achieved at the end of each period.
Share options
The Group operates several equity-settled share option schemes.
The schemes have been accounted for under the provisions of IFRS 2 and,
accordingly, have been fair valued on their inception date using appropriate
methodology (the Black Scholes and Monte Carlo models).
A cost is recorded through the statement of comprehensive income in respect of
the number of options outstanding and the fair value of those options. A
corresponding credit is made to the retained earnings reserve and the effect
of this can be seen in the statement of changes in equity. See note 9 for more
details.
Taxation
Current income tax
Current income tax assets and liabilities for the current period are measured
at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the reporting date, in the
countries where the Group operates and generates taxable income. Tax is
recognised in the statement of comprehensive income, except to the extent that
it relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity.
Deferred tax
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date. Deferred tax liabilities
are recognised for all taxable temporary differences, except:
• when the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.
• in respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures, when
the timing of the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that
it is highly probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except:
• when the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit
or loss.
• in respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are recognised only to the extent that it is probable that
the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Financial instruments
The Group uses derivative financial instruments such as forward currency
contracts to reduce its foreign currency risk, commodity price risk and
interest rate risk. Derivative financial instruments are recognised at fair
value. The fair value is derived using an internal model and supported by
valuations by third party financial institutions.
Where a derivative financial instrument is designated as a hedge of the
variability in cash flows of a recognised asset or liability, or a highly
probable forecast transaction, the effective part of any gain or loss on the
derivative financial instrument is recognised directly in other comprehensive
income and accumulated in the hedging reserve. Any ineffective portion of the
hedge is recognised immediately in the statement of comprehensive
income. Effectiveness of the derivatives subject to hedge accounting is
assessed prospectively at inception of the derivative, and at each reporting
period end date prior to maturity.
Where a hedge of a forecast transaction subsequently results in the
recognition of a non-financial asset, such as an item of inventory, the
associated gains and losses are recognised in the initial cost of that asset.
When a hedging instrument expires or is sold, terminated or exercised, or the
entity revokes designation of the hedge relationship but the hedged forecast
transaction is still expected to occur, the cumulative gain or loss at that
point remains in equity and is recognised in accordance with the above policy
when the transaction occurs. If the hedged transaction is no longer expected
to take place, the cumulative unrealised gain or loss recognised in equity is
reclassified in the statement of other comprehensive income immediately.
Financial assets
Under IFRS 9, on initial recognition, a financial asset is classified as
measured at amortised cost, fair value through profit or loss, or fair value
though other comprehensive income.
A financial asset is measured at amortised cost using the effective interest
rate if it meets both of the following conditions: it is held within a
business model whose objective is to hold assets to collect contractual cash
flows; and its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding. Under IFRS 9 trade receivables, without a significant financing
component, are classified and held at amortised cost, being initially measured
at the transaction price and subsequently measured at amortised cost less any
impairment loss.
IFRS 9 includes an 'expected loss' model ('ECL') for recognising impairment of
financial assets held at amortised cost. The Group has elected to measure loss
allowances for trade receivables at an amount equal to lifetime ECLs. Credit
losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the
contract and the cash flows that the Group expects to receive).
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating expected credit
losses, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis based on the Group's
historical experience and informed credit assessment and including
forward-looking information. The Group performs the calculation of expected
credit losses separately for each customer group. The balances involved are
immaterial for further disclosure.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income comprise
derivative financial instruments entered into by the Group that are designated
as hedging instruments in hedge relationships as defined by IFRS 9. Financial
assets at fair value through other comprehensive income are carried in the
statement of financial position at fair value with changes in fair value
recognised in other comprehensive income.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include derivative
financial instruments entered into by the Group that are not designated as
hedging instruments in hedge relationships as defined by IFRS 9. Financial
assets at fair value through profit or loss are carried in the statement of
financial position at fair value with changes in fair value recognised in
profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is derecognised when the rights to
receive cash flows from the asset have expired and the entity has transferred
its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full and either (a) the entity has
transferred substantially all the risks and rewards of the asset, or (b) the
entity has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group assesses at each reporting date, on a forward-looking basis the ECLs
associated with our financial assets carried at amortised cost.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IFRS 9 are classified as financial
liabilities at fair value through profit or loss or other financial
liabilities. The entity determines the classification of its financial
liabilities at initial recognition. All financial liabilities are recognised
initially at fair value.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
derivatives held for trading. Financial liabilities are classified as
held-for-trading if they are acquired for the purpose of selling in the near
term. This category includes derivative financial instruments entered into by
the Group. Gains or losses on liabilities held-for-trading are recognised in
profit and loss.
Other financial liabilities
After initial recognition, interest-bearing loans and borrowings, trade and
other payables and other liabilities are subsequently measured at amortised
cost using the effective interest rate method. Gains and losses are recognised
in the statement of comprehensive income when the liabilities are derecognised
as well as through the effective interest rate method (EIR) amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance costs.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires.
Fair value of financial instruments
The fair value of financial instruments that are traded in active markets at
each reporting date is determined by reference to mark-to-market valuations
obtained from the relevant bank (bid price for long positions and ask price
for short positions), without any deduction for transaction costs.
Refinancing
Where bank borrowings are refinanced, the Group assesses whether the
transaction results in new facilities or a modification of the previous
facilities.
Where the transaction results in a modification of the facilities, the Group
assesses whether that modification is substantial by reference both to whether
the present value of the cash flows of the new facilities is more than 10%
different to the present value of the cash flows of the previous facilities
and by reference to any qualitative differences between the old and new
agreements.
Where a modification is substantial, the Group derecognises the original
liability and recognises a new liability for the modified facilities with any
transaction costs expensed to the income statement. Where the modification is
non-substantial, the Group amends the carrying amount of the liability to
reflect the updated cash flows and amends the EIR from the modification date.
Cash and cash equivalents
Cash and cash equivalents comprise of cash at bank and in hand, less bank
overdrafts to the extent the Group have the right to offset and settle these
balances net.
The Group's cash and cash equivalents balance includes £54m (2023: £31m) of
credit card receivables due to be received within three working days of the
year-end date.
Equity
Equity comprises the following:
§ "Share capital" represents the nominal value of equity shares;
§ "Share premium" represents the excess of the consideration made for the
shares, over and above the nominal valuation of those shares;
§ "Retained earnings reserve" represents retained profits;
§ "Hedging reserve" representing the fair value of the derivatives held by
the Group at the period end that are accounted for under hedge accounting and
that represent effective hedges;
§ "Legal reserve" representing the statutory reserve required by Luxembourg
law as an apportionment of profit within each Luxembourg company (up to 10% of
the standalone share capital);
§ "Merger reserve" representing the reserve created during the
reorganisation of the Group in 2014; and
§ "Foreign exchange reserve" represents the cumulative differences arising
in retranslation of the subsidiaries and associate's results.
Foreign currency translation
These consolidated financial statements are presented in pounds sterling.
The following Group companies have a functional currency of pounds sterling:
· B&M European Value Retail S.A.
· B&M European Value Retail 1 S.à r.l. (Lux Holdco)
· B&M European Value Retail Holdco 1 Ltd (UK Holdco 1)
· B&M European Value Retail Holdco 2 Ltd (UK Holdco 2)
· B&M European Value Retail Holdco 3 Ltd (UK Holdco 3)
· B&M European Value Retail Holdco 4 Ltd (UK Holdco 4)
· EV Retail Ltd
· B&M Retail Ltd
· Opus Homewares Ltd
· Heron Food Group Ltd
· Heron Foods Ltd
· Cooltrader Ltd
· Heron Properties (Hull) Ltd
· Centz N.I. Limited
The following Group companies have a functional currency of the Euro:
· B&M European Value Retail 2 S.à r.l. (SBR Europe)
· B&M France SAS
· B&M European Value Retail Germany GmbH (Germany Holdco)
The Group companies whose functional currency is the Euro have been
consolidated into the Group via retranslation of their results in line with
IAS 21 'Effects of Changes in Foreign Exchange Rates'. The assets and
liabilities are translated into pounds sterling at the period end exchange
rate. The revenues and expenses are translated into pounds sterling at the
average monthly exchange rate during the period. Any resulting foreign
exchange difference is cumulatively recorded in the foreign exchange reserve
with the annual effect being charged/credited to other comprehensive income.
Transactions entered into by the company in a currency other than the currency
of the primary economic environment in which it operates (the "functional
currency") are recorded at the rates ruling when the transactions occur.
Foreign currency monetary assets and liabilities are translated at the rates
ruling at the balance sheet date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
Pension costs
The Group operates a defined contribution scheme and contributions are charged
to profit or loss in the period in which they are incurred.
Provisions
Provisions are recognised when a present obligation (legal or constructive)
exists as a result of a past event and where it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and the amount can be reliably estimated. Provisions are discounted
where the time value of money is considered to be material.
The property provision also contains expected dilapidation costs, which covers
expected dilapidation costs for any lease considered onerous, any related to
stores recently closed, any stores which are planned or at risk of closure and
those stores occupied but not under contract. At the period end, 109 stores
were provided against (2023: 105).
We do not provide against stores which are under contract and not considered
at risk of closure (comprising the majority of the estate) as management
consider that such a provision would be minimal as a result of regular store
maintenance and limited fixed fit out costs.
We also provide against the terminal dilapidation expense on our major
distribution centres, which is built up over the term of the leases held over
those distribution centres.
Climate change considerations
In preparing the financial statements, the Group has considered the impact of
climate change, particularly in the context of the TCFD disclosures and the
Group's ESG strategy included in the Annual Report.
The Group's existing fixed asset replacement programme is phased over several
years and therefore any changes in the requirements associated with climate
change would not have a material impact in any given year. The costs expected
to be incurred in connection with the Group's commitments are included within
the Group's budget used to support the going concern and viability assessments
and the impairment reviews of non-current assets.
Given the identified risks are expected to be present in the medium to
long-term, the impact of climate change on the going concern and viability of
the Group over the next three years is not expected to be material and is
therefore not currently classified as a key source of estimation of
uncertainty.
Critical judgements and key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the financial information was
prepared. However, existing circumstances and assumptions about future
developments may change due to market changes or circumstances arising beyond
the control of the Group. Such changes are reflected in the assumptions when
they occur.
Critical judgements
Investments in associates
Multi-lines International Company Ltd (Multi-lines), which is 50% owned by the
Group, has been judged by management to be an associate rather than a
subsidiary or a joint venture.
Under IFRS 10 control is determined by:
· Power over the investee.
· Exposure, or rights, to variable returns from its involvement with the
investee.
· The ability to use its power over the investee to affect the amount of
the investor's returns.
Although 50% owned, B&M Group does not have voting rights or substantive
rights. Therefore, the level of power over the business is considered to be
more in keeping with that of an associate than a joint-venture and, therefore,
it has been treated as such within these consolidated financial statements.
Hedge accounting
The Group hedge accounts for stock purchases made in US Dollars.
There is significant management judgement involved in forecasting the level of
dollar purchases to be made within the period that the forward hedge has been
bought for.
Management takes a cautious view that no more than 80% of the operational
hedging in place can be subject to hedge accounting, due to forecast
uncertainties, and assesses every forward hedge taken out, on inception, if
that figure should be reduced further by considering general purchasing
trends, and discussion of specific purchasing decisions.
Estimation uncertainty
There are no areas of estimation uncertainty where management consider that
there is a significant risk of a material adjustment to the carrying amounts
of assets and liabilities within the next financial year.
Standards and interpretations not yet applied by the Group
The following amendments to accounting standards and interpretations, issued
by the International Accounting Standards Board (IASB), have not yet been
applied by the Group in the period. None of these are expected to have a
significant impact on the Group's consolidated results or financial position:
IASB effective for annual periods beginning on or after 1 January 2024
Standard Summary of changes EU endorsement status
Amendments to IAS 1 The amendment requires an entity to have the right to defer settlement of the Endorsed on 19 December 2023
liability for at least 12 months after the reporting date in order to classify
Presentation of Financial Statements a liability as non-current. This right may be subject to a company complying
with conditions (covenants) specified in a loan arrangement.
Effective from 1 January 2024.
Amendments to IFRS 16 The amendment requires a seller-lessee to subsequently measure such leaseback Endorsed on 20 November 2023.
liabilities in a way that does not recognise any amount of gain or loss that
Lease Liability in a Sale and Leaseback relates to the right-of-use it retains. The new requirements do not prevent a
seller-lessee from recognising in profit or loss any gain or loss relating to
the partial or full termination of a lease. The amendments do not depend on an Effective from 1 January 2024.
index or rate.
IASB effective for annual periods beginning on or after 1 January 2025
Standard Summary of changes EU endorsement status
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates The amendments clarify how an entity should assess whether a currency is Not yet endorsed.
exchangeable and how it should determine a spot exchange rate when
exchangeability is lacking. It also requires the disclosure of information
that enables users of financial statements to understand the impact of a
currency not being exchangeable.
Amendments to IAS 7 and IFRS 7 The amendments introduce two new disclosure objectives for a company to Not yet endorsed.
provide information about its supplier finance arrangements that would enable
Supplier Finance Arrangements users (investors) to assess the effects of these arrangements on the company's
liabilities and cash flows, and the company's exposure to liquidity risk.
IASB effective for annual periods beginning on or after 1 January 2027
Standard Summary of changes EU endorsement status
IFRS 18 Presentation and Disclosure in Financial Statements The standard requires the presentation of two new defined subtotals in the Not yet endorsed.
income statement - operating profit and profit before financing and income
taxes and defined categories (operating, investing and financing). The
disclosure of APMs that are not subtotalled in the financial statements must
be specified.
2 Segmental information
IFRS 8 Operating Segments requires the Group's segments to be identified on
the basis of internal reports about the components of the Group that are
regularly reviewed by the chief operating decision maker to assess performance
and allocate resources across each reporting segment.
The chief operating decision maker has been identified as the Executive
Directors who monitor the operating results of the retail segments for the
purpose of making decisions about resource allocation and performance
assessment.
For management purposes, the Group is organised into three operating segments,
UK B&M, UK Heron
and France B&M segments comprising the three separately operated business
units within the Group.
Items that fall into the corporate category, which is not a separate segment
but is presented to reconcile the balances to those presented in the main
statements, include those related to the Luxembourg or associate entities,
Group financing, corporate transactions, any tax adjustments and items we
consider to be adjusting (see note 3).
The average Euro rate for translation purposes was €1.1587/£ during the
year, with the period-end rate being €1.1694/£ (2023: €1.1581/£ and
€1.1360/£ respectively).
53 week period to 30 March 2024 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Revenue 4,410 560 514 - 5,484
EBITDA (note 3) 743 50 89 (17) 865
Depreciation and amortisation (195) (23) (40) - (258)
Profit/(loss) before interest and tax 548 27 49 (17) 607
Net finance expense (48) (1) (14) (46) (109)
Income tax (charge)/credit (127) (6) (9) 11 (131)
Segment profit/(loss) 373 20 26 (52) 367
Total assets 2,905 284 413 23 3,625
Total liabilities (1,491) (119) (307) (974) (2,891)
Capital expenditure* (97) (15) (14) - (126)
52 week period to 25 March 2023 (restated†) UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Revenue 4,067 485 431 - 4,983
EBITDA (note 3) 680 41 76 (20) 777
Depreciation and amortisation (182) (22) (38) - (242)
Profit/(loss) before interest and tax 498 19 38 (20) 535
Net finance expense (45) (3) (11) (40) (99)
Income tax (charge)/credit (87) (3) (6) 8 (88)
Segment profit/(loss) 366 13 21 (52) 348
Total assets 2,856 295 385 25 3,561
Total liabilities (1,443) (119) (277) (1,002) (2,841)
Capital expenditure* (77) (11) (10) - (98)
* Capital expenditure includes both tangible and intangible capital.
† Restated due to a change in the presentation of deferred tax. See note 1
for more details.
Adjusted operating profit by segment is equal to the profit before interest
and tax figures given above.
Revenue is disaggregated geographically as follows:
Period to 53 weeks ended 30 March 52 weeks ended
2024 25 March
2023
£'m £'m
Revenue due from UK operations 4,970 4,552
Revenue due from French operations 514 431
Overall revenue 5,484 4,983
Non-current assets (excluding deferred tax and financial instruments) are
disaggregated geographically as follows:
As at 30 March 25 March
2024 2023
£'m £'m
UK operations 2,315 2,240
French operations 254 243
Luxembourg operations 5 8
Overall 2,574 2,491
The Group operates a small wholesale operation, with the relevant
disaggregation of revenue as follows:
Period to 53 weeks ended 30 March 52 weeks ended
2024 25 March
2023
£'m £'m
Revenue due to sales made in stores 5,454 4,940
Revenue due to wholesale activities 30 37
Revenue due to online activities - 6
Overall revenue 5,484 4,983
3 Reconciliation of non-IFRS measures from the statement of
comprehensive income
The Group reports a selection of alternative performance measures as detailed
below. The Directors believe that these measures provide additional
information that is useful to the users of the accounts.
EBITDA, adjusted EBITDA, adjusted operating profit and adjusted profit are all
non-IFRS measures and therefore a reconciliation from the statement of
comprehensive income is set out below.
Period to 53 weeks ended 30 March 52 weeks ended
2024 25 March
2023
£'m £'m
Profit on ordinary activities before interest and tax 607 535
Add back depreciation and amortisation 258 242
EBITDA 865 777
Costs in relation to the acquisition of Wilko stores 9 -
Online project costs - 2
Reverse the fair value and foreign exchange impact of derivatives yet to (2) 17
mature
Foreign exchange on intercompany balances 0 0
Adjusted EBITDA 872 796
Depreciation and amortisation (258) (242)
Adjusted operating profit 614 554
Interest costs related to lease liabilities (see note 6) (69) (61)
Net other finance costs (see note 6) (44) (38)
Adjusted profit before tax 501 455
Adjusted tax (132) (91)
Adjusted profit for the period 369 364
Adjusted EBITDA (pre-IFRS 16), adjusted operating profit (pre-IFRS 16) and
adjusted profit (pre-IFRS 16) are also non-IFRS measures and are reconciled as
follows:
Period to 53 weeks ended 30 March 52 weeks ended
2024 25 March
2023
£'m £'m
EBITDA (above) 865 777
Remove effects of IFRS 16 on EBITDA (243) (223)
EBITDA (pre-IFRS 16) 622 554
Adjusting items (above) 7 19
Adjusted EBITDA (pre-IFRS 16) 629 573
Pre-IFRS 16 depreciation and amortisation (82) (76)
Adjusted operating profit (pre-IFRS 16) 547 497
Net other finance costs (44) (38)
Adjusted profit before tax (pre-IFRS 16) 503 459
Adjusted tax (133) (93)
Adjusted profit (pre-IFRS 16) for the period 370 366
The effects of IFRS 16 on EBITDA caption reflects the difference between IAS
17 and IFRS 16 accounting and largely consists of the additional rent expense
the Group would have incurred under the IAS 17 standard.
Adjusting items are the fair value and foreign exchange impact of derivatives
yet to mature, the foreign exchange impact of the retranslation of
intercompany balances and significant project gains or losses which may be
included if incurred, as they have been in the current year in relation to the
acquisition of several Wilko store leases, and in the prior year in relation
to our online trial (which had ceased by the prior year-end date).
Adjusted tax represents the tax charge per the statement of comprehensive
income as adjusted only for the effects of the adjusting items detailed above.
The following table reconciles the statutory figures to the adjusted and
adjusted (pre-IFRS 16) figures in the statutory profit and loss format on a
line-by-line basis.
53-week period to 30 March 2024 Statutory figures Adjusting Adjusted Impact of Adjusted
items figures IFRS 16 (pre-IFRS 16)
£'m £'m £'m £'m £'m
Revenue 5,484 - 5,484 - 5,484
Cost of sales (3,449) - (3,449) - (3,449)
Gross profit 2,035 - 2,035 - 2,035
Depreciation and amortisation (258) - (258) 176 (82)
Other administrative expenses (1,169) 7 (1,162) (243) (1,405)
Operating profit 608 7 615 (67) 548
Share of losses in associates (1) - (1) - (1)
Profit before interest and tax 607 7 614 (67) 547
Finance costs relating to right-of-use assets (69) - (69) 69 -
Other finance costs (50) 1 (49) - (49)
Finance income 10 (5) 5 - 5
Profit before tax 498 3 501 2 503
Income tax expense (131) (1) (132) (1) (133)
Profit for the period 367 2 369 1 370
52-week period to 25 March 2023 Statutory figures Adjusting items Adjusted figures Impact of Adjusted
IFRS 16 (pre-IFRS 16)
£'m £'m £'m £'m £'m
Revenue 4,983 - 4,983 - 4,983
Cost of sales (3,182) - (3,182) - (3,182)
Gross profit 1,801 - 1,801 - 1,801
Depreciation and amortisation (242) - (242) 166 (76)
Other administrative expenses (1,023) 19 (1,004) (223) (1,227)
Operating profit 536 19 555 (57) 498
Share of profits in associates (1) - (1) - (1)
Profit before interest and tax 535 19 554 (57) 497
Finance costs relating to right-of-use assets (61) - (61) 61 -
Other finance costs (40) - (40) - (40)
Finance income 2 - 2 - 2
Profit before tax 436 19 455 4 459
Income tax expense (88) (3) (91) (2) (93)
Profit for the period 348 16 364 2 366
The tables below give the reconciliation between the operating profit and
adjusted EBITDA (pre-IFRS 16) by segment:
53-week period to 30 March 2024 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit/(loss) before interest and tax 548 27 49 (17) 607
Adjusting items (above) - - - 7 7
Adjusted operating profit/(loss) 548 27 49 (10) 614
Depreciation and amortisation (pre-IFRS 16) 59 13 10 - 82
Impact of IFRS 16 (51) (4) (12) - (67)
Adjusted EBITDA 556 36 47 (10) 629
52-week period to 25 March 2023 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit/(loss) before interest and tax 498 19 38 (20) 535
Adjusting items (above) - - - 19 19
Adjusted operating profit/(loss) 498 19 38 (1) 554
Depreciation and amortisation (pre-IFRS 16) 52 12 12 - 76
Impact of IFRS 16 (48) (1) (8) - (57)
Adjusted EBITDA 502 30 42 (1) 573
The segmental split in EBITDA and adjusted EBITDA reconciles as follows:
53-week period to 30 March 2024 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit/(loss) before interest and tax 548 27 49 (17) 607
Add back depreciation and amortisation 195 23 40 - 258
EBITDA 743 50 89 (17) 865
Adjusting items (above) - - - 7 7
Adjusted EBITDA 743 50 89 (10) 872
52-week period to 25 March 2023 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit/(loss) before interest and tax 498 19 38 (20) 535
Add back depreciation and amortisation 182 22 38 - 242
EBITDA 680 41 76 (20) 777
Adjusting items (above) - - - 19 19
Adjusted EBITDA 680 41 76 (1) 796
Adjusted EPS and diluted EPS measures are reconciled in note 11.
Post-tax free cash flow is reconciled to the Consolidated statement of cash
flows as follows:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Cash flows from operating activities 862 866
Income tax paid (116) (84)
Purchase of property, plant and equipment (123) (93)
Purchase of intangible assets (3) (5)
Proceeds from sale of property, plant and equipment 2 9
Repayment of the principal in relation to lease liabilities (171) (168)
Payment of interest in relation to right-of-use assets (69) (61)
Post-tax free cash flow 382 464
Adjusted EBITDA and related measures are not measures of performance or
liquidity under IFRS and should not be considered in isolation or as a
substitute for measures of profit, or as an indicator of the Group's operating
performance or cash flows from operating activities as determined in
accordance with IFRS.
4 Reconciliation of the 52-week results from the 53-week
adjusted results
Group management consider that presenting an adjusted 52-week result is
helpful to the users of this annual report in order to directly compare
like-for-like periods.
Therefore, we present a reconciliation to an adjusted 52-week statement of
comprehensive income derived from the adjusted 53-week statement of
comprehensive income by removing the final week of the financial year. The
adjusting items are those detailed in note 3.
Adjusted 53 weeks ended Week 53 52 weeks ended 52 weeks ended
30 March 2024 £'m 23 March 2024 25 March 2023
£'m
£'m £'m
Revenue 5,484 112 5,372 4,983
Cost of sales (3,449) (70) (3,379) (3,182)
Gross profit 2,035 42 1,993 1,801
Operating costs (1,406) (29) (1,377) (1,228)
Adjusted EBITDA (pre-IFRS 16) 629 13 616 573
Depreciation and amortisation (pre-IFRS 16) (82) (2) (80) (76)
Operating impact of IFRS 16 67 1 66 57
Adjusted operating profit 614 12 602 554
Adjusting items (7) (0) (7) (19)
Profit before interest and tax 607 12 595 535
Finance costs relating to right-of-use assets (69) (1) (68) (61)
Other net finance costs (40) (1) (39) (38)
Profit before tax 498 10 488 436
5 Operating profit
The following items have been charged in arriving at operating profit:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Auditor's remuneration 1 1
Payments to auditors in respect of non-audit services:
Other assurance services 0 0
Cost of inventories recognised as an expense (included in cost of sales) 3,449 3,182
Depreciation of owned property, plant and equipment 79 71
Amortisation (included within administration costs) 2 4
Depreciation of right-of-use assets 177 167
Impairment of right-of-use assets 5 2
Operating lease rentals 1 5
Loss/(profit) on sale of property, plant and equipment 1 (1)
Gain on sale and leasebacks - (1)
Loss/(gain) on foreign exchange 7 (10)
6 Finance costs and finance income
Finance costs include all interest-related income and expenses. The
following amounts have been included in the continuing profit line for each
reporting period presented:
53 weeks ended 52 weeks ended
Period ended 30 March 25 March
2024 2023
£'m £'m
Interest on debt and borrowings (47) (38)
Ongoing amortisation of finance fees (2) (2)
Interest swap derivative (0) -
Total adjusted finance expense (49) (40)
Release of remaining unamortised fees on previous facilities (1) -
Total other finance expense (50) (40)
Finance costs on lease liabilities (69) (61)
Total finance expense (119) (101)
The finance expense reconciles to the statement of cash flows as follows:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Cash
Finance costs paid in relation to debt and borrowings 41 36
Finance costs paid in relation to lease liabilities 69 61
Fees paid in relation to refinancing 15 -
Finance costs paid 125 97
Non-cash
Movement of accruals in relation to debt and borrowings 6 2
Capitalisation of paid fees in relation to new facilities (15) -
Release of remaining unamortised fees on previous facilities 1 -
Ongoing amortisation of finance fees 2 2
Interest swap derivative (0) -
Total finance expense 119 101
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Interest income on overpaid corporation tax 1 -
Interest income on loans and bank accounts 4 2
Total adjusted finance income 5 2
Gain on tender of corporate bonds 5 -
Total finance income 10 2
Total net adjusted finance costs are therefore:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Total adjusted finance expense (49) (40)
Total adjusted finance income 5 2
Total net adjusted finance costs (44) (38)
7 Employee remuneration
Expense recognised for employee benefits is analysed below:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Wages and salaries 657 583
Social security costs 47 39
Share-based payment expense 3 3
Pensions - defined contribution plans 10 9
Total remuneration 717 634
There are £1m of defined contribution pension liabilities owed by the Group
at the period end (2023: £1m).
B&M France operates a scheme where they must provide a certain amount per
employee to pay upon their retirement date. The accrual on this scheme at the
period end was £1m (2023: £1m).
The average monthly number of persons employed by the Group during the period
was:
Period ended Restated*
53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
Sales staff 39,928 39,735
Administration 1,187 1,155
Total staff 41,115 40,890
* The staff figures presented in the prior year annual report have been
restated following recalculation. Previously sales staff numbers were
presented as 42,299 with 1,206 administration staff, giving 43,505 in total.
8 Key management remuneration
Key management personnel and Directors' remuneration includes the following:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Directors' remuneration:
Short-term employee benefits 4 4
Benefits accrued under the share option scheme 1 1
Pension 0 0
Total 5 5
Key management expense (includes Directors' remuneration):
Short-term employee benefits 14 9
Benefits accrued under the share option scheme 1 2
Pension 0 0
Total 15 11
Amounts in respect of the highest paid director emoluments:
Short-term employee benefits 3 2
Benefits accrued under the share option scheme 0 1
Pension 0 0
Total 3 3
The emoluments disclosed above are of the Directors and key management
personnel who have served as a Director within any of the continuing Group
companies.
9 Share options
The Group operates three equity-settled share option schemes which split down
to various tranches. Details of these schemes follow.
1) Long-Term Incentive Plan (LTIP) awards
The LTIP was adopted by the Board on 29 May 2014. No grant under this scheme
can be made more than 10 years after this date.
Eligibility
Employees and Executive Directors of the Group are eligible for the LTIP and
the awards are made at the discretion of the remuneration committee.
Limits & pricing
A fixed number of options are offered to each participant, with the pricing
set at £nil. The options offered to each individual cannot exceed a total
value of 250% of the participants base salary where the value is measured as
the market value of the shares on grant multiplied by the number of options
awarded, with the whole scheme limited to 10% of the share capital in issue.
Dividend credits
All participants in any LTIP awards granted after 1 April 2018 are entitled to
a dividend credit, where the notional dividend they would have received on the
maximum number of shares available under their award is converted into new
share options and added to the award based upon the share price on the date of
the dividend. These additional awards have been reflected in the tables below.
Vesting & exercise
The share options are subject to a set of conditions measured over a
three-year performance period as follows:
LTIP Executive ("A") awards
· 50% of the awards are subject to a TSR performance condition, where
the Group's TSR over the performance period is compared with a comparator
group. The awards vest on a sliding scale where the full 50% is awarded if the
Group falls in the upper quartile, 12.5% vests if the Group falls exactly at
the median, and 0% below that.
· 50% of the awards are subject to a diluted EPS performance target. The
awards vest on a sliding scale based upon the EPS as follows:
Award EPS as at 50% paid at 12.5% paid at
LTIP 2017A March-20 24.0p 19.0p
LTIP 2018A March-21 28.0p 23.0p
LTIP 2019A March-22 33.0p 27.0p
LTIP 2020A March-23 30.0p 25.0p
LTIP 2021A March-24 45.0p 37.0p
LTIP 2022A March-25 50.0p 42.0p
LTIP 2023A March-26 43.9p 37.9p
Below the 12.5% boundary, no options vest. diluted EPS is defined as adjusted
(pre-IFRS 16) diluted EPS, see note 11.
· The performance period is the three years ending the period end
specified in the EPS table above.
· Once the performance period concludes, the calculated number of share
options remaining are then subject to a two-year holding period.
· The share options vest at the conclusion of the holding period.
LTIP Restricted ("B") awards
· Group EBITDA must be positive in each year of the LTIP.
· The awards also have an employee performance condition attached.
Vested awards can be exercised up to the tenth anniversary of grant.
Tranches
There have been several awards of the LTIP, with the details as follows.
Note that the LTIP Executive awards have been split into the element subject
to the TSR (50%) and the element subject to the EPS (50%) since these were
valued separately.
The TSR awards market condition has been included in the fair value
calculation for those awards while all non-market conditions have not been
included. Expected volatility has been calculated based upon the historic
share price volatility of the Group and those of comparable companies.
The key information used in the valuation of these tranches is as follows:
Scheme Date of grant Original options granted Fair value of each option Risk free rate Expected life (years) Volatility
2017A-TSR 7 Aug 17 40,610 272p 0.52% 5 32%
2017A-EPS 7 Aug 17 40,610 351p 0.52% 5 32%
2018A-TSR 22 Aug 18 226,672.5 240p 0.97% 5 29%
2018A-EPS 22 Aug 18 226,672.5 409p 0.97% 5 29%
2019A-TSR 22 Aug 19 275,640.5 251p 0.37% 5 31%
2019A-EPS 22 Aug 19 275,640.5 361p 0.37% 5 31%
2020A-TSR 30 Jul 20 141,718 409p -0.11% 5 48%
2020A-EPS 30 Jul 20 141,718 464p -0.11% 5 48%
2021A-TSR 3 Aug 21 218,861 354p 0.23% 5 37%
2021A-EPS 3 Aug 21 218,861 560p 0.23% 5 37%
2022A-TSR 17 Nov 22 309,342 124p 3.16% 5 31%
2022A-EPS 17 Nov 22 309,342 386p 3.16% 5 31%
2023A-TSR 1 Aug 23 224,422 409p 4.75% 5 32%
2023A-EPS 1 Aug 23 224,422 548p 4.75% 5 32%
2018/B1 23 Jan 18 19,264 400p 0.25% 3 32%
2018/B2 20 Aug 18 236,697 406p 0.25% 3 30%
2019/B1 20 Aug 19 369,061 348p 0.47% 3 30%
2019/B2 18 Sep 19 2,678 373p 0.47% 3 30%
2020/B1 30 Jul 20 303,092 463p -0.12% 3 39%
2021/B1 3 Aug 21 281,950 560p 0.12% 3 42%
2022/B1 3 Aug 22 396,877 437p 1.75% 3 32%
2022/B2 15 Dec 22 3,641 412p 1.75% 3 32%
2023/B1 1 Aug 23 414,833 548p 4.77% 3 31%
Scheme Options at 25 Mar 23 Granted Dividend credit Forfeited Exercised Options at 30 Mar 24
2018A-TSR 230,321* - 3,978 - (234,299) -
2018A-EPS 297,452* - 5,138 - (302,590) -
2019A-TSR 293,188* - 19,395 - - 312,583*
2019A-EPS 293,188* - 19,395 - - 312,583*
2020A-TSR 185,124 - 12,245 - - 197,369*
2020A-EPS 185,124 - 12,245 - - 197,369*
2021A-TSR 251,037 - 11,899 (71,146) - 191,790
2021A-EPS 251,037 - 11,899 (71,146) - 191,790
2022A-TSR 327,851 - 21,686 - - 349,537
2022A-EPS 327,851 - 21,686 - - 349,537
2023A-TSR - 224,422 10,782 - - 235,204
2023A-EPS - 224,422 10,782 - - 235,204
2020/B1 302,339 - 4,789 (2,817) (304,311) -
2021/B1 257,138 - 15,921 (21,925) - 251,134
2022/B1 408,264 - 24,705 (52,107) - 380,862
2022/B2 3,809 - 252 - - 4,061
2023/B1 - 414,833 18,058 (45,413) - 387,478
Scheme Options at 26 Mar 22 Granted Dividend credit Forfeited Exercised Options at 25 Mar 23
2017A-TSR 27,557* - - - (27,557) -
2017A-EPS 18,071* - - - (18,071) -
2018A-TSR 202,465* - 19,613 8,243† - 230,321*
2018A-EPS 280,368* - 25,327 (8,243)† - 297,452*
2019A-TSR 279,393.5 - 24,963 (11,168.5) - 293,188*
2019A-EPS 279,393.5 - 24,963 (11,168.5) - 293,188*
2020A-TSR 169,361 - 15,763 - - 185,124
2020A-EPS 169,361 - 15,763 - - 185,124
2021A-TSR 229,660.5 - 21,376.5 - - 251,037
2021A-EPS 229,660.5 - 21,376.5 - - 251,037
2022A-TSR - 309,342 18,509 - - 327,851
2022A-EPS - 309,342 18,509 - - 327,851
2017/B1 53,576 - - - (53,576) -
2017/B2 13,379 - - - (13,379) -
2018/B2 38,289 - - - (38,289) -
2019/B1 391,522 - 10,023 (1,937) (399,608) -
2019/B2 3,403 - 107 - (3,510) -
2020/B1 297,103 - 24,247 (19,011) - 302,339
2021/B1 271,020 - 22,204 (36,086) - 257,138
2022/B1 - 396,877 23,532 (12,145) - 408,264
2022/B2 - 3,641 168 - - 3,809
*These share options have vested and are in a two-year holding period.
† There was a rebalancing between the EPS and TSR awards after the final
analysis of the performance conditions of this scheme. The overall shares
options vesting on the scheme does not change, only the split between TSR and
EPS.
2) Deferred Bonus Share Plan (DBSP) awards
The DBSP was adopted by the Board on 30 July 2018. No grant under this scheme
can be made more than 10 years after this date.
The DBSP differs from the LTIP awards in that there are no vesting conditions.
The scheme has been set up in order to allocate a specified proportion of the
Executive Director's annual bonus into £nil price share options which are
then placed in holding for three years.
As there are no vesting conditions, these awards have been valued at the
amount of the bonus to be converted into share options under the scheme.
There are annual awards of the scheme. The 2024 award will be made after this
set of statutory accounts have been published and will therefore be reported
in the next annual report.
Scheme Options at 25 Mar 23 Granted Dividend credit Forfeited Exercised Options at 30 Mar 24
2020 Bonus allocation 59,673 - 1,031 - (60,704) -
2021 Bonus allocation 97,885 - 6,474 - - 104,359
2022 Bonus allocation 304,382 - 20,135 - - 324,517
2023 Bonus allocation - 155,365 10,275 - - 165,640
Scheme Options at 26 Mar 22 Granted Dividend credit Forfeited Exercised Options at 25 Mar 23
2019 Bonus allocation 72,909 - - - (72,909) -
2020 Bonus allocation 54,591 - 5,082 - - 59,673
2021 Bonus allocation 89,550 - 8,335 - - 97,885
2022 Bonus allocation - 278,466 25,916 - - 304,382
The fair values of the presented schemes on inception were £0.8m (2023),
£1.1m (2022), £0.5m (2021), £0.2m (2020) and £0.2m (2019).
3) Specific LTIP awards
The remuneration committee are able to award specific share schemes under the
LTIP framework, where considered appropriate. There are two such schemes at
the year end, both relating to the buy-out of executive share option schemes
held prior to appointment with the business. Both schemes have no vesting
conditions but are time limited with details given below.
Scheme Options at 25 Mar 23 Granted Dividend credit Forfeited Exercised Options at 30 Mar 24
Buy-out Nov-23 34,330 - 927 - (35,257) -
Buy-out Nov-24 34,330 - 2,271 - - 36,601
Scheme Options at 26 Mar 22 Granted Dividend credit Forfeited Exercised Options at 25 Mar 23
Buy-out Nov-23 - 32,392 1,938 - - 34,330
Buy-out Nov-24 - 32,392 1,938 - - 34,330
The fair values of the presented schemes on inception were both £0.1m.
The summary period-end position is as follows:
Period ended 30 March 25 March
2024 2023
Share options outstanding at the start of the year 4,144,323 3,170,633
Share options granted during the year (including via dividend credit) 1,285,010 1,692,106
Share options forfeited or lapsed during the year (264,554) (91,517)
Share options exercised in the year (937,161) (626,899)
Share options outstanding at the end of the year 4,227,618 4,144,323
Of which;
Share options that are not vested 2,576,597 2,499,574
Share options that are in holding 1,651,021 1,644,749
Share options that are vested and eligible for exercise - -
All exercised options are satisfied by the issue of new share capital. The
weighted average share price on exercise was £5.52 (2023: £3.59). All
outstanding options have a £nil (2023: £nil) exercise price and the weighted
average remaining contractual life is 1.7 years (2023: 2.1 years).
In the year, £3m has been charged to the Consolidated statement of
comprehensive income in respect to the share option schemes (2023: £3m). At
the end of the year the outstanding share options had a carrying value of £7m
(2023: £6m).
10 Taxation
The relationship between the expected tax expense based on the standard rate
of corporation tax in the UK of 25% (2023: 19%) and the tax expense actually
recognised in the Consolidated statement of comprehensive income can be
reconciled as follows:
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Current tax expense 122 84
Deferred tax charge 9 4
Total tax expense recorded in profit and loss 131 88
Current tax credit in other comprehensive income (1) -
Deferred tax credit in other comprehensive income (0) (5)
Total tax credit recorded in other comprehensive income (1) (5)
Result for the year before tax 498 436
Expected tax charge at the standard tax rate 124 83
Effect of:
Expenses not deductible for tax purposes 6 3
Income not taxable (1) (2)
Lease accounting (0) (1)
Foreign operations taxed at local rates 1 2
Changes in the rate of corporation tax 0 1
Adjustment in respect of prior years 0 2
Hold over gains on fixed assets (0) 0
Other 1 0
Actual tax expense 131 88
Deferred taxation
Statement of financial position Restated*
30 March 25 March
2024 2023
£'m £'m
Accelerated tax depreciation (17) (11)
Relating to intangible brand assets (27) (27)
Fair valuing of assets and liabilities (asset) 2 3
Fair valuing of assets and liabilities (liability) (2) (1)
Temporary differences relating to the tax accounting for leases (asset) 90 93
Temporary differences relating to the tax accounting for leases (liability) (68) (69)
Movement in provision 1 0
Relating to share options 4 3
Held over gains on fixed assets (4) (4)
Losses carried forward - -
Other temporary differences 0 0
Net deferred tax liability (21) (13)
Analysed as;
Deferred tax asset 4 4
Deferred tax liability (25) (17)
*Restated to reflect a change in the presentation of deferred tax, see note 1
for further details.
Statement of comprehensive income
53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Accelerated tax depreciation (7) (5)
Relating to intangible brand assets (0) 1
Fair valuing of assets and liabilities (2) 8
Temporary differences relating to the tax accounting for leases (1) (0)
Movement in provision 0 (0)
Relating to share options 1 (0)
Held over gains on fixed assets - (0)
Brought forward losses - (3)
Other temporary differences (0) (0)
Net deferred tax charge (9) 1
Analysed as;
Total deferred tax charge in profit or loss (9) (4)
Total deferred tax credit in other comprehensive income 0 5
At the period end, there are £2m of unrecognised deferred tax assets within
the Group, in relation to a corporate interest restriction (2023: none).
The Group offsets tax assets and liabilities if and only if it has a legally
enforceable right to set off current tax assets and current tax liabilities
and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same tax authority.
The Group has performed an assessment of the potential exposure to Pillar Two
income taxes under Luxembourg legislation. This assessment is based upon our
recent and ongoing county-by-country reporting and the most recent financial
statements for the constituents of the Group. Based on the assessment the
Pillar Two effective tax rates in all of the jurisdictions in which the Group
operates are above 15%. We will therefore apply the transitional safe harbour
rules which will exempt the Group from applying the full Pillar Two rules.
11 Earnings per share
Basic earnings per share (EPS) amounts are calculated by dividing the net
profit or loss for the financial period attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares
outstanding at each period end.
Diluted EPS amounts are calculated by dividing the net profit attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during each year plus the weighted average number
of ordinary shares that would be issued on conversion of any dilutive
potential ordinary shares into ordinary shares.
Adjusted (and adjusted (pre-IFRS 16)) basic and diluted EPS are calculated in
the same way as above, except using adjusted profit attributable to ordinary
equity holders of the parent, as defined in note 3.
There are share option schemes in place (see note 9) which have a dilutive
effect on both periods presented.
The following reflects the income and share data used in the EPS computations:
Period ended 30 March 25 March
2024 2023
£'m £'m
Profit for the period attributable to owners of the parent 367 348
Adjusted profit for the period attributable to owners of the parent 369 364
Adjusted (pre-IFRS 16) profit for the period attributable to owners of the 370 366
parent
Thousands Thousands
Weighted average number of ordinary shares for basic earnings per share 1,002,392 1,001,593
Dilutive effect of employee share options 2,282 1,730
Weighted average number of ordinary shares adjusted for the effect of dilution 1,004,674 1,003,323
Pence Pence
Basic earnings per share 36.6 34.8
Diluted earnings per share 36.5 34.7
Adjusted basic earnings per share 36.8 36.3
Adjusted diluted earnings per share 36.7 36.2
Adjusted (pre-IFRS 16) basic earnings per share 36.9 36.5
Adjusted (pre-IFRS 16) diluted earnings per share 36.8 36.5
12 Investments in associates
Period ended 30 March 25 March
2024 2023
£'m £'m
Net book value
Carrying value at the start of the period 8 8
Dividends received (1) -
Share of profits and losses in associates since the prior year valuation (1) (1)
exercise
Effect of foreign exchange on translation (1) 1
Carrying value at the end of the period 5 8
The Group has a 22.5% holding in Centz Retail Holdings Limited (Centz), a
company incorporated in Ireland. The principal activity of the company is
retail sales and their registered address is 5 Old Dublin Road, Stillorgan,
Co. Dublin.
The Group has a 50% interest in Multi-lines International Company Ltd
(Multi-lines), a company incorporated in Hong Kong. The principal activity of
the company is the purchase and sale of goods and their registered address is
8/F, Hope Sea Industrial Centre, No. 26 Lam Hing Street, Kowloon Bay, Hong
Kong.
None of the entities have discontinued operations or other comprehensive
income, except that on consolidation both entities have a foreign exchange
translation difference.
Period ended 30 March 25 March
2024 2023
£'m £'m
Multi-lines
Non-current assets 13 14
Current assets 76 69
Non-current liabilities - -
Current liabilities (86) (75)
Net assets 3 8
Revenue 242 252
Loss (3) (3)
Period ended 30 March 25 March
2024 2023
£'m £'m
Centz
Non-current assets 11 16
Current assets 27 24
Non-current liabilities (11) (10)
Current liabilities (9) (13)
Net assets 18 17
Revenue 64 71
Profit 2 3
The figures for both associates show 12 months to December 2023 (prior year:
12 months to December 2022), being the period used in the valuation of the
associate.
13 Intangible assets
Goodwill Software Brands Other Total
£'m £'m £'m £'m £'m
Cost or valuation
At 26 March 2022 920 14 116 1 1,051
Additions - 3 2 - 5
Disposals - (7) (4) - (11)
Effect of retranslation 1 0 0 0 1
At 25 March 2023 921 10 114 1 1,046
Additions - 3 - - 3
Disposals - (0) - - (0)
Remeasure - - 0 - 0
Effect of retranslation (0) (0) - (0) (0)
At 30 March 2024 921 13 114 1 1,049
Accumulated amortisation / impairment
At 26 March 2022 - 10 1 - 11
Charge for the year - 1 3 - 4
Disposals - (6) (4) - (10)
Effect of retranslation - 0 0 - 0
At 25 March 2023 - 5 0 - 5
Charge for the year - 2 0 - 2
Disposals - (0) - - (0)
Effect of retranslation - (0) - - (0)
At 30 March 2024 - 7 0 - 7
Net book value at 30 March 2024 921 6 114 1 1,042
Net book value at 25 March 2023 921 5 114 1 1,041
At the period end, no software was being developed that is not yet in use
(2023: same), and the Group was not committed to the purchase of any
intangible assets (2023: same).
Impairment review of intangible assets held with indefinite life
The Group holds the following assets with indefinite life:
30 March 30 March 25 March 25 March
2024 2024 2023 2023
Goodwill Brand Goodwill Brand
£'m £'m £'m £'m
UK B&M 807 99 807 99
UK Heron 88 14 88 14
France B&M 26 - 26 -
Not all items in the brand classification have an indefinite life as some are
time limited. The brand intangible assets that have been identified as having
an indefinite life are designated as such as management believe that these
assets will hold their value for an indefinite period of time. Specifically,
the B&M and Heron brands represent leading brands in their sectors with
significant histories and growth prospects.
The B&M France goodwill is held in Euros, with an underlying balance of
€30m (2023: €30m).
In each case the goodwill and brand assets have been allocated to one group of
CGUs, being the store estate within the specific segment to which those assets
relate.
The Group performs impairment tests at each period end. The impairment test
involves assessing the net present value of the expected cash flows in
relation to the stores within each CGU according to a number of assumptions to
calculate the value-in-use for the group of CGUs.
The key assumptions in assessing the value-in-use as at 30 March 2024 were;
The Group's discount rate
This was calculated using an internal CAPM model which includes external
estimates of the risk-free rate, cost of debt, equity beta and market risk
premium. It is adjusted for which country the segment is in and how large the
segment is. Discount rates have decreased during the year, largely due to a
decrease in the equity risk premium.
The inflation rate for expenses
This is based upon the consumer price index for the relevant country, as well
as official reports from the appropriate central bank.
Like-for-like sales growth
This is an estimate made by management which encompasses the historical sales
trends of the entity and management's assessment of how each segment will
perform in the context of the current economic environment.
Gross margin
The standing assumption made by management is that forecast gross margin will
be similar to that experienced in the prior year, and the result is
subsequently sensitised to the gross margin input to demonstrate the
robustness of the projection against this assumption.
Terminal growth rate
An estimate made by management based upon the expected position of the
business at the end of the five-year forecast period, in the context of the
macro growth level of the economic environment in which that segment operates.
The assumptions were as follows:
As at 30 March 25 March
2024 2023
Discount rate (B&M UK) 10.2% 12.7%
Discount rate (Heron) 11.2% 14.7%
Discount rate (B&M France) 12.4% 14.7%
Inflation rate for costs (B&M UK and Heron) 3.0%/2.0%* 8.0%/1.0%*
Inflation rate for costs (B&M France) 3.0%/2.0%* 6.0%/4.0%/2.0%*
Like-for-like sales growth (B&M UK) 1.5%/2.0%* 2.0%
Like-for-like sales growth (Heron) 4.0%/2.0%* 5.0%/2.0%
Like-for-like sales growth (B&M France) 6.5%/2.0%* 7.0%/2.0%
Gross margin (all) ±0bps ±0bps
Terminal growth rate (B&M UK) 1.0% 0.5%
Terminal growth rate (Heron) 1.7% 1.0%
Terminal growth rate (B&M France) 1.4% 1.2%
* The first figure reflects the assumption in year one (and in the prior year,
year two for French inflation), with the following figure representing the
long-term rate.
These assumptions are reflected for five years in the CGU forecasts and beyond
this a perpetuity calculation is performed using the assumptions made
regarding terminal growth rates.
In each case, the results of the impairment tests on the continuing operations
identified that the value-in-use was in excess of the carrying value of assets
within each group of CGUs at the period-end dates. The headroom with the base
case assumptions in B&M UK was £4,611m, Heron £256m and B&M France
€637m (2023: £3,380m, £83m and €248m respectively).
No indicators of impairment were noted in the segments and the impairment
tests were sensitised with reference to the key assumptions for reasonable
possible scenarios.
These scenarios specifically included:
· A drop off in sales or gross margin, modelling flat long-term
like-for-like sales and terminal growth rates.
· Sales prices failing to keep pace with inflation such that the local
inflation rates increase 50bps without a corresponding increase in
like-for-like sales.
· A deterioration of the credit environment, leading to a significantly
increased cost of capital of 20%.
To further quantify the sensitivity, the below tables demonstrate the point at
which each impairment test would first fail for changes in each of the key
assumptions when applied to all years, except any specific year one or two
assumptions noted above, whilst assuming each other key assumption is held
level (e.g. for inflation sensitivity, the like-for-like was not adjusted):
30 March 25 March
2024 2023
B&M UK
Discount rate 32.5% 53.9%
Inflation rate for expenses 12.7% 12.8%
Like-for-like sales (7.0)% (5.4)%
Gross margin (217)bps (234)bps
Terminal growth rate (46.1)% Not sensitive
B&M France
Discount rate 53.8% 72.0%
Inflation rate for expenses 12.6% 8.0%
Like-for-like sales (6.9)% (3.0)%
Gross margin (261)bps (152)bps
Terminal growth rate (55.9)% Not sensitive
Heron
Discount rate 24.1% 22.4%
Inflation rate for expenses 7.1% 3.9%
Like-for-like sales (2.6)% (0.5)%
Gross margin (100)bps (56)bps
Terminal growth rate (17.7)% (17.6)%
14 Property, plant and equipment
Land and buildings Motor vehicles Plant, Total
fixtures and equipment
£'m £'m £'m £'m
Cost or valuation
At 26 March 2022 110 25 506 641
Additions 7 6 80 93
Disposals (18) (5) (47) (70)
Effect of retranslation - 0 3 3
At 25 March 2023 99 26 542 667
Additions 8 13 102 123
Disposals (0) (3) (6) (9)
Remeasure (0) 0 0 0
Effect of retranslation - (0) (1) (1)
At 30 March 2024 107 36 637 780
Accumulated depreciation and impairment charges
At 26 March 2022 28 13 237 278
Charge for the period 4 5 62 71
Disposals (15) (2) (46) (63)
Effect of retranslation - 0 1 1
At 25 March 2023 17 16 254 287
Charge for the period 5 4 70 79
Disposals (0) (2) (4) (6)
Remeasure - 0 0 0
Effect of retranslation - (0) (1) (1)
At 30 March 2024 22 18 319 359
Net book value at 30 March 2024 85 18 318 421
Net book value at 25 March 2023 82 10 288 380
Under the terms of the loan and notes facilities in place at 30 March 2024,
fixed and floating charges were held over £85m of the net book value of land
and buildings, £18m of the net book value of motor vehicles and £285m of the
net book value of the plant, fixtures and equipment (2023: £82m, £10m and
£257m respectively).
At the period end, £4m of assets were under construction (2023: £3m).
Included within land and buildings is land with a cost of £6m (2023: £6m)
which is not depreciated.
Capital commitments
There were £11m of contractual capital commitments not provided within the
Group financial statements as at 30 March 2024 (2023: £7m).
15 Right-of-use assets
Land and buildings Motor vehicles Plant, Total
fixtures and equipment
£'m £'m £'m £'m
Net book value
As at 26 March 2022 1,053 8 5 1,066
Additions 130 2 3 135
Modifications 32 - - 32
Disposals (18) (0) (0) (18)
Impairment (2) - - (2)
Depreciation (160) (4) (3) (167)
Foreign exchange 9 0 1 10
As at 25 March 2023 1,044 6 6 1,056
Additions 231 2 6 239
Modifications 28 - - 28
Disposals (35) (0) (0) (35)
Impairment (5) - - (5)
Depreciation (170) (4) (3) (177)
Foreign exchange (5) (0) (0) (5)
As at 30 March 2024 1,088 4 9 1,101
The vast majority of the Group's leases are in relation to the property
comprising the store and warehouse network for the business. The other leases
recognised are trucks, trailers, company cars, manual handling equipment and
various fixtures and fittings. The leases are separately negotiated and no
sub-group is considered to be individually significant nor to contain
individually significant terms.
The Group recognises a lease term appropriate to the business expectation of
the term of use for the asset which usually assumes that all extension clauses
are taken, and break clauses are not, unless the business considers there is a
good reason to recognise otherwise.
At the period end, there was one property with a significant unrecognised
extension clause for which the Group has full autonomy over exercising in
2040. On the date of recognition of the relevant right-of-use asset, in March
2020, the extension period liability had a net present value of £30m.
There are no material covenants imposed by our right-of-use leases.
In the year the Group expensed £4m (2023: £3m) in relation to low value
leases and <£1m (2023: <£1m) in relation to short-term leases for
which the Group applied the practical expedient under IFRS 16.
The Group expensed <£1m (2023: <£1m) in relation to variable lease
payments. The agreements are ongoing and future payments are expected to be in
line with those expensed recently.
The Group received £2m (2023: £2m) in relation to subletting right-of-use
assets.
The impairments noted in the table above are recorded when the carrying value
of a right-of-use asset exceeds the value in use of that asset. These arise
when we exit a store before the related lease has come to an end, or as the
outcome of our annual store impairment review. All impairments are in relation
to store leases. No impairments have been reversed in the presented periods.
The segmental splits of the impairments were B&M UK £2m, Heron £2m,
B&M France <£1m (2023: B&M UK <£1m, Heron £1m, B&M France
<£1m).
The current and future cashflows for the right-of-use assets are:
30 March 25 March
2024 2023
£'m £'m
This year 237 229
Within 1 year 242 229
Between 1 and 2 years 235 217
Between 2 and 3 years 222 200
Between 3 and 4 years 205 184
Between 4 and 5 years 179 166
Between 5 and 10 years 506 486
More than 10 years 125 141
Total 1,714 1,623
The change in lease liability reconciles to the figures presented in the
Consolidated statement of cashflows as follows:
30 March 25 March
2024 2023
£'m £'m
Lease liabilities brought forward 1,301 1,310
Cash
Repayment of the principal in relation to right-of-use assets (171) (168)
Payment of interest in relation to right-of-use assets (69) (61)
Non-cash
Interest charge 69 61
Effects on lease liability relating to lease additions, modifications and 232 150
disposals
Effects of foreign exchange (5) 9
Total cash movement in the year (240) (229)
Total non-cash movement in the year 296 220
Movement in the year 56 (9)
Lease liabilities carried forward 1,357 1,301
Of which current 170 177
Of which non-current 1,187 1,124
Discount rates
Where, as in most cases, a discount rate implicit to the lease is not
available, discount rates are calculated for each lease with reference to the
underlying cost of borrowing available to the business and several other
factors specific to the asset.
We have calculated the weighted average discount rates and sensitivity to a
50bps change in the discount rate to the interest charge as follows:
30 March 25 March
2024 2023
Weighted average discount rate
Property 5.2% 4.7%
Equipment 7.3% 4.2%
All right-of-use assets 5.2% 4.7%
Effect on finance costs with a change of 50bps to the discount rate £'m £'m
Property 7 6
Equipment 0 0
All right-of-use assets 7 6
Sale and leaseback
During the year, the business has not undertaken any sale and leasebacks
(2023: two).
The details of the prior period transactions were as follows:
25 March
2023
£'m
Consideration received 4
Net book value of the assets disposed (3)
Costs of sale when specifically recognised (0)
Profit per pre-IFRS 16 accounting standards 1
Opening adjustment to the right-of-use asset (0)
Profit recognised in the statement of comprehensive income 1
Initial right-of-use asset recognised 1
Initial lease liability recognised (2)
The pre-IFRS 16 profit is higher because the provisions of IFRS 16 require
that a portion of the profit relating to the sale and leaseback is instead
recognised as a reduction in the opening right-of-use asset, and therefore the
benefit is released over the term of the contract.
16 Inventories
As at 30 March 25 March
2024 2023
£'m £'m
Goods for resale 776 764
Included in the amount above was a net release of £3m related to inventory
provisions (2023: £3m net release). In the period to 30 March 2024, £3,449m
(2023: £3,182m) was recognised as an expense for inventories and £31m of
supplier rebates were received (2023: £26m).
17 Trade and other receivables
30 March 25 March
2024 2023
£'m £'m
Non-current
Other receivables 5 6
Total non-current receivables 5 6
Current
Trade receivables 9 9
Deposits on account 3 2
Provision for impairment (2) (2)
Net trade receivables to non-related parties 10 9
Prepayments 32 26
Related party receivables 2 2
Other tax 10 5
Other receivables 22 10
Total current receivables 76 52
Trade receivables are stated initially at their fair value and then at
amortised cost as reduced by appropriate allowances for estimated
irrecoverable amounts. The carrying amount is determined by the Directors to
be a reasonable approximation of fair value.
There are no individually non-related significant balances held at the current
period end. See note 27 in respect of balances held with related parties.
The following table sets out an analysis of provisions for impairment of trade
receivables:
Period ended 30 March 25 March
2024 2023
£'m £'m
Provision for impairment at the start of the period (2) (2)
Impairment during the period (1) (0)
Utilised/released during the period 1 0
Effect of foreign exchange - (0)
Balance at the period end (2) (2)
Trade receivables are non-interest-bearing and are generally on terms of 30
days or less.
The following table sets out a maturity analysis of trade receivables,
including those which are current:
As at 30 March 25 March
2024 2023
£'m £'m
Current 6 6
1-30 days past due 1 1
31-90 days past due 0 0
Over 90 days past due 2 2
Balance at the period end 9 9
18 Cash and cash equivalents
As at 30 March 25 March
2024 2023
£'m £'m
Cash at bank and in hand 182 237
Cash and cash equivalents 182 237
The cash and cash equivalents balance includes £54m (2023: £31m) in respect
of credit card receivables.
As at the period end the Group had available £220m of undrawn committed
borrowing facilities (2023: £142m).
19 Trade and other payables
As at 30 March 25 March
2024 2023
£'m £'m
Current
Trade payables 380 371
Other tax and social security payments 37 80
Accruals and deferred income 101 63
Related party trade payables 33 11
Other payables 21 16
Total current payables 572 541
Trade payables are generally on 30-day terms and are not interest-bearing. The
carrying value of trade payables approximates to their fair value. For further
details on the related party trade payables, see note 27.
The Group had supply chain financing facilities in place during the year. The
facilities are operated by major banking partners with high credit ratings and
are limited to $50m total exposure at any one time.
The exposure at the period end was $19m (2023: $nil), the average balance over
the year was $18m (2023: $13m).
The purpose of the arrangement is to enable our participating suppliers, at
their discretion, to draw down against their receivables from the Group prior
to their usual due date.
From the Group's perspective, the invoices subject to these schemes are
treated in the same way as those not subject to these schemes. That is that
they are approved under our usual processes (and cannot be drawn down against
until they have been approved) and paid on the usual due date, which is in
line with the payment terms of our other international suppliers. We do not
benefit from the margin charged by the banks for any early draw down, and the
banks do not benefit from additional security when compared to the security
originally enjoyed by the supplier. There is no impact on potential liquidity
risk as the cash flow timings and amounts are unchanged for those invoices in
the schemes against those not in these schemes.
There would be no impact on the Group if the facilities became unavailable and
there are no fees or charges payable by the Group in regard to these
arrangements.
As these invoices continue to be part of the normal operating cycle of the
Group, the schemes do not change the recognition of the invoices subject to
them, so they continue to be recognised as trade payables, with the associated
cash flows presented within operating cash flows and without affecting the
calculation of Group net debt.
20 Other financial assets and liabilities
Other financial assets
As at 30 March 25 March
2024 2023
£'m £'m
Current financial assets at fair value through profit and loss:
Foreign exchange forward contracts 2 1
Current financial assets at fair value through other comprehensive income:
Foreign exchange forward contracts 2 0
Total current other financial assets 4 1
Non-current financial assets at fair value through profit and loss:
Foreign exchange forward contracts 0 -
Non-current financial assets at fair value through other comprehensive income:
Foreign exchange forward contracts 1 -
Total non-current other financial assets 1 -
Total other financial assets 5 1
Financial assets through profit or loss reflect the fair value of those
derivatives that are not designated as hedge relationships but are
nevertheless intended to reduce the level of risk for expected sales and
purchases.
Other financial liabilities
As at 30 March 25 March
2024 2023
£'m £'m
Current financial liabilities at fair value through profit and loss:
Foreign exchange forward contracts 4 8
Current financial liabilities at fair value through other comprehensive
income:
Foreign exchange forward contracts 6 5
Total current other financial liabilities 10 13
Non-current financial liabilities at fair value through profit and loss:
Foreign exchange forward contracts 0 -
Total non-current other financial liabilities 0 -
Total other financial liabilities 10 13
The other financial liabilities through profit or loss reflect the fair value
of those foreign exchange forward contracts that are not designated as hedge
relationships but are nevertheless intended to reduce the level of risk for
expected sales and purchases.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
· Level 1: quoted (unadjusted) prices in active markets for identical
assets or liabilities.
· Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable, either directly
or indirectly.
· Level 3: techniques which use inputs that have a significant effect on
the recorded fair value that are not based on observable market data.
As at the reporting dates, the Group held the following financial instruments
carried at fair value on the balance sheet:
Total Level 1 Level 2 Level 3
£'m £'m £'m £'m
30 March 2024
Foreign exchange contracts (5) - (5) -
25 March 2023
Foreign exchange contracts (12) - (12) -
The financial instruments have been valued by the issuing bank, using a mark
to market method. The bank has used various inputs to compute the valuations,
which include inter alia the relevant maturity date and strike rates, the
current exchange rate, fuel prices and relevant interbank floating interest
rate levels.
21 Financial liabilities - borrowings
As at 30 March 25 March
2024 2023
£'m £'m
Current
Revolving facility bank loan 25 -
Term facility bank loan - 78
B&M France loan facilities 4 3
Total 29 81
Non-current
High yield bond notes 650 646
Term facility bank loan 221 219
B&M France loan facilities 10 8
Total 881 873
Bond refinancing
On 23 November 2023, the Group refinanced part of its existing £400m high
yield bond notes (2020). £244m of bonds were redeemed at 98%, resulting in a
gain of £5m recognised as a financial gain in the Consolidated statement of
comprehensive income in the period. The remaining £156m of the high yield
bond notes (2020) have a maturity date of July 2025.
On the same date, the Group issued £250m of high yield bond notes, maturing
in November 2030 with an interest rate of 8.125%.
Transaction fees of £4m were capitalised and are included in the carrying
value of these bonds. An interest rate swap derivative was taken at the start
of the process to hedge exposure to movements in long-term SONIA rates. This
hedge was considered to be fully effective and as such the fair value
movements of £8m are included in other comprehensive income and the hedging
reserve. The £8m value on the hedging reserve recycles through to the other
finance costs caption on the Consolidated statement of comprehensive income on
a straight line basis over the term of the bond.
The 2020 bonds which were redeemed carried £1m in fees incurred on inception,
which were yet to be amortised. These have been released through other finance
costs on the Consolidated statement of comprehensive income.
These transactions included the sale of bonds by related parties, see note 27
for more details.
Extension of senior loan facilities
In the prior period, the Group completed an extension of its term facility
bank loan.
The previous £300m term facility was drawn down in July 2020 with £4m of
fees capitalised into the balance at that time. The agreement included a
revolving facility of £155m and was due to mature in April 2025.
This was extended with new facilities totalling £450m due to mature in March
2028. These comprise a term loan of £225m and a revolving facility of £225m
and the agreement also includes the availability of two 1-year extension
terms, subject to mutual consent with the banking syndicate. The cashflows
associated with the net repayment of £75m took place in the current year.
An assessment was made by management with the conclusion that the transaction
represents an extension and not a significant modification. As such, the
remaining £2m of unamortised capitalised fees have remained on the balance
sheet and will be amortised over the extended term. There were £3m of fees
associated with the term facility extension which have also been capitalised
into the loan balance.
In the current year, in March 2024, the Group and the banking syndicate
confirmed the activation of the first of these 1-year extensions. As such, the
facilities now have a maturity date of March 2029.
Other borrowings
The carrying values given above include fees incurred on refinancing which are
to be amortised over the terms of those facilities. More details of these are
given below.
The Group holds three tranches of high yield bonds which are each held at
amortised cost.
The three tranches of bonds were issued in July 2020, November 2021 and
November 2023, with £4m, £3m and £4m, respectively, of fees capitalised at
inception. The July 2020 bonds were partly repaid in November 2023, resulting
in a £1m release of the remaining amortised fees on that portion of the
issue.
A number of these bonds have been sold or purchased by related parties, see
note 27.
All other loans are carried at their gross cash amount. The maturities, which
only relate to the position as at 30 March 2024, and gross cash amounts of
these facilities are included in the table below.
Interest rate Maturity 30 March 25 March
% 2024 2023
£'m £'m
Revolving facility loan 1.75% + SONIA Apr-24 25 -
Term facility bank loan A 2.00% + SONIA Mar-29 225 300
High yield bond notes (2020) 3.625% Jul-25 156 400
High yield bond notes (2021) 4.000% Nov-28 250 250
High yield bond notes (2023) 8.125% Nov-30 250 -
B&M France - BNP Paribas 0.75-3.97% Sept-24 to Nov-28 5 3
B&M France - Caisse d'Épargne 0.75-2.60% Aug-24 to Nov-29 1 2
B&M France - CIC 0.71-0.75% Sept-24 to Jan-27 1 2
B&M France - Crédit Agricole 0.39-0.81% Sept-25 to Jan-28 1 1
B&M France - Crédit Lyonnais 0.68-3.65% Nov-24 to Mar-29 5 3
B&M France - Société Générale N/A N/A - 0
Total 919 961
The term facility bank loans and the high yield bond notes have carrying
values which include transaction fees allocated on inception.
All B&M France facilities have gross values in Euros, and the values above
have been translated at the period-end rates of €1.1694/£ (2023:
€1.1360/£).
The movement in the loan liabilities during the year breaks down as follows:
As at 30 March 25 March
2024 2023
£'m £'m
Borrowings brought forward 954 956
Cash
Receipt of Group revolving credit facilities 25 -
Repayment of old bank loan facilities (300) -
Receipt of new bank loan facilities 225 -
Repayment of corporate bonds (239) -
Receipt due to newly issued corporate bonds 250 -
Net repayment of Heron facilities - (3)
Net receipt of French facilities 3 0
Capitalised fees on refinancing (7) -
Non-cash
Foreign exchange on loan balances (0) 0
Gain on tender (5) -
Refinancing fees accrued 1 (1)
Release of remaining unamortised fees on previous facilities 1 -
Ongoing amortisation of finance fees 2 2
Finance fees on the loss on the derivative swap on refinancing 0 -
Total cash movement in the year (43) (3)
Total non-cash movement in the year (1) 1
Movement in the year (44) (2)
Borrowings carried forward 910 954
Of which current 29 81
Of which non-current 881 873
22 Provisions
Property provisions Other Total
£'m
£'m
£'m
At 26 March 2022 11 4 15
Provided in the period 1 2 3
Utilised during the period (1) (2) (3)
Released during the period (6) (0) (6)
At 25 March 2023 5 4 9
Provided in the period 2 4 6
Utilised during the period (1) (3) (4)
Released during the period (0) (1) (1)
At 30 March 2024 6 4 10
Current liabilities 2024 2 4 6
Non-current liabilities 2024 4 - 4
Current liabilities 2023 2 4 6
Non-current liabilities 2023 3 - 3
The property provision relates to the expected future costs on specific
leasehold properties. This is inclusive of onerous leases and dilapidations on
these properties. The timing in relation to utilisation is dependent upon the
individual lease terms.
The other provisions principally relate to disputes concerning insured
liability claims. A prudent amount has been set aside for each claim as per
legal advice received by the Group. These claims are individually
non-significant and average £10k per claim (2023: £9k per claim).
23 Share capital
Allotted, called up and fully paid Shares £'m
B&M European Value Retail S.A. ordinary shares of 10p each
As at 26 March 2022 1,001,226,836 100
Release of shares related to employee share options 626,899 0
As at 25 March 2023 1,001,853,735 100
Release of shares related to employee share options 937,161 0
As at 30 March 2024 1,002,790,896 100
Ordinary shares
Each ordinary share ranks pari passu with each other ordinary share and each
share carries one vote. The Group parent is authorised to issue up to an
additional 2,969,431,326 ordinary shares.
24 Cash generated from operations
Period ended 53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Profit before tax 498 436
Adjustments for:
Net interest expense 109 99
Depreciation on property, plant and equipment 79 71
Depreciation on right-of-use assets 177 167
Impairment of right-of-use assets 5 2
Amortisation of intangible assets 2 4
Gain on sale and leaseback - (1)
Loss/(gain) on disposal of property, plant and equipment 1 (1)
Share option expense 3 3
Change in inventories (14) 103
Change in trade and other receivables (23) 1
Change in trade and other payables 29 (30)
Change in provisions 1 (6)
Share of losses from associates 1 1
(Profit)/loss resulting from fair value of financial derivatives (6) 17
Cash generated from operations 862 866
25 Group information and ultimate parent undertaking
The financial results of the Group include the following entities.
Company name Country Date of incorporation Percent held within the Group Principal activity
B&M European Value Retail S.A. Luxembourg May 2014 Parent Holding company
B&M European Value Retail 1 S.à r.l. Luxembourg November 2012 100% Holding company
B&M European Value Retail Holdco 1 Ltd UK December 2012 100% Holding company
B&M European Value Retail Holdco 2 Ltd UK December 2012 100% Holding company
B&M European Value Retail Holdco 3 Ltd UK November 2012 100% Holding company
B&M European Value Retail Holdco 4 Ltd UK November 2012 100% Holding company
B&M European Value Retail 2 S.à r.l. Luxembourg September 2012 100% Holding company
EV Retail Limited UK September 1996 100% Holding company
B&M Retail Limited UK March 1978 100% General retail
Opus Homewares Limited UK April 2003 100% Property management
Heron Food Group Ltd UK August 2002 100% Holding company
Heron Foods Ltd UK October 1978 100% Convenience retail
Cooltrader Ltd UK September 2012 100% Dormant
Heron Properties (Hull) Ltd UK February 2003 100% Dormant
B&M European Value Retail Germany GmbH Germany November 2013 100% Ex-holding company
B&M France SAS France November 1977 100% General retail
Centz N.I. Limited UK January 2021 100% Property management
During the prior year, on 17 January 2023, Retail Industry Apprenticeships Ltd
was dissolved and ceased to be a member of the Group.
Registered offices
· The Luxembourg entities are all registered at 3 rue Gabriel Lippmann,
L-5365 Munsbach, Luxembourg.
· Centz N.I. Limited are registered at Murray House, 4 Murray Street,
Belfast, United Kingdom, BT1 6DN.
· The other UK entities are all registered at The Vault, Dakota Drive,
Estuary Commerce Park, Speke, Liverpool, L24 8RJ.
· B&M European Value Retail Germany GmbH are registered at Am
Hornberg 6, 29614, Soltau.
· B&M France are registered at 8 rue du Bois Joli, 63800 Cournon
d'Auvergne.
Associates
The Group has a 50% interest in Multi-lines International Company Limited, a
company incorporated in Hong Kong, and a 22.5% interest in Centz Retail
Holdings Limited, a company incorporated in the Republic of Ireland. The share
of profit or loss from the associates is included in the statement of
comprehensive income, see note 12.
Ultimate parent undertaking
The Directors of the Group consider the parent and the ultimate controlling
related party of this Group to be B&M European Value Retail S.A.,
registered in Luxembourg.
26 Financial risk management
The Group uses various financial instruments, including bank loans, related
party loans, finance company loans, cash, equity investment, derivatives and
various items, such as trade receivables and trade payables that arise
directly from its operations.
The main risks arising from the Group's financial instruments are market risk,
currency risk, cash flow interest rate risk, credit risk and liquidity risk.
The Directors review and agree policies for managing each of these risks and
they are summarised below.
The existence of these financial instruments exposes the Group to a number of
financial risks, which are described in more detail below. In order to
manage the Group's exposure to those risks, in particular the Group's exposure
to currency risk, the Group enters into forward foreign currency contracts. No
transactions in derivatives are undertaken of a speculative nature.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value
interest rate risk and commodity price risk. Commodity price risk is not
considered material to the business as the Group is able to pass on pricing
changes to its customers.
The Group's policies for managing fair value interest rate risk are considered
along with those for managing cash flow interest rate risk and are set out in
the subsection entitled 'interest rate risk' below.
Currency risk
The Group is exposed to translation and transaction foreign exchange risk
arising from exchange rate fluctuations on its purchases from overseas
suppliers.
In relation to translation risk, this is not considered material to the
business as amounts owed in foreign currency are short term of up to 30 days
and are of a relatively modest nature. Transaction exposures, including those
associated with forecast transactions, are hedged when known, principally
using forward currency contracts.
The majority of the Group's sales are to customers in the UK and France and
there is no material currency exposure in this respect. A proportion of the
Group's purchases are priced in US Dollars and the Group generally uses
forward currency contracts to minimise the risk associated with that exposure.
Approach to hedge accounting
As part of the Group's response to currency risk the currency forwards taken
out are intended to prudently cover the majority of our stock purchases
forecast for that period. However, the Group only hedge accounts for that part
of the forward contract that we are reasonably certain will be spent in the
forecast period, allowing for potential volatility. Therefore, management
always consider the likely volatility for a period and assign a percentage to
each tranche of forwards purchased, usually in the range 50-80%, and never
more than 80%.
Effectiveness of the hedged forward is then assessed against the Group hedge
ratio, which has been set by management at 80% as a reasonable guide to the
certainty level we expect the hedged portions of our forwards to at least
achieve. If they fail, or are expected to fail, to meet this ratio of
effectiveness then they are treated as non-hedged items, and immediately
expensed through administrative expenses in profit and loss.
Ineffectiveness can be caused by exceptional volatility in the market, by the
timing of product availability, or the desire to manage short-term company
cash flows, for instance, when a large amount of cash is required at
relatively short notice.
Where a hedged derivative matures efficiently, the fair value is transferred
to inventory and subsequently to cost of sales when that item is sold. If the
Group did not hedge account, then the difference is that the gain or loss in
other comprehensive income would be presented in profit or loss and the assets
and liabilities presented under the classification fair value through other
comprehensive income would be at fair value through profit or loss.
In the period, the Group has had $605m of hedged derivatives mature (2023:
$634m). The difference to profit before tax if none of our forwards had been
hedge accounted during the year would have been a loss of £3m (2023: £7m
loss) and a pre-tax loss in other comprehensive income of £1m (2023: £28m
loss).
The net effective hedging loss transferred to the cost of inventories in the
year was £15m (2023: net gain of £49m). At the period end, the amount of
outstanding US Dollar contracts covered by hedge accounting was $693m (2023:
$641m), which mature over the next 19 months (2023: 15 months). The change in
fair value of the hedging instruments used as the basis for recognising hedge
ineffectiveness was £nil (2023: £2m), achieved effectiveness was 100% (2023:
97%).
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible
change in US Dollar period-end exchange rates with all other variables held
constant. The impact on the Group's profit before tax and other comprehensive
income (net of tax) is largely due to changes in the fair value of our foreign
exchange derivatives and revaluation of creditors and deposits held on account
with our US Dollar suppliers.
As at Change in USD rate 30 March 25 March
2024 2023
£'m £'m
Effect on profit before tax +2.5% (7) (11)
-2.5% 8 12
Effect on other comprehensive income +2.5% (13) (13)
-2.5% 14 13
Profit before tax and other comprehensive income are not sensitive to the
effects of a reasonably possible change in the Euro period-end exchange rates.
These calculations have been performed by taking the period-end translation
rate used in the accounts and applying the changes noted above. The balance
sheet valuations are then directly calculated. The valuation of the foreign
exchange derivatives were projected based upon the spot rate changing and all
other variables being held equal.
Interest rate risk
Interest rate risk is the risk of variability of the Group cash flows due to
changes in the interest rate. The Group is exposed to changes in interest
rates as a portion of the Group's bank borrowings are subject to a floating
rate based on SONIA.
The Group's interest rate risk arises mainly from long-term borrowings.
Borrowings issued at variable rates expose the Group to cash flow interest
rate risk. The Group's exposure to interest rate fluctuations is not
considered to be material, however the Group has used interest rate swaps to
minimise the impact in the current year, in relation to the final pricing of
our bond issue (see note 21).
If floating interest rates had been 50 basis points higher/lower throughout
the year with all other variables held constant, the effect upon calculated
pre-tax profit for the year would have been:
As at Basis point increase / decrease 30 March 25 March
2024 2023
£'m £'m
Effect on profit before tax +50 (1) (1)
-50 1 1
This sensitivity has been calculated by changing the interest rate for each
interest payment and accrual made by the Group over the period, by the amount
specified in the table above, and then calculating the difference that would
have been required.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss.
The Group's principal financial assets are cash, derivatives and trade
receivables. The credit risks associated with cash and derivatives are limited
as the main counterparties are banks with high credit ratings (A long term and
A-1 short term (Standard & Poor) or better, (2023: A, A-1 (or better)
respectively). The principal credit risk arises therefore from the Group's
trade receivables.
Credit risk is further limited by the fact that the vast majority of sales
transactions are made through the store registers, direct from the customer at
the point of purchase, leading to a low trade receivables balance.
In order to manage credit risk, the Directors set limits for customers based
on a combination of payment history and third-party credit references. Credit
limits are reviewed by the credit controller on a regular basis in conjunction
with debt ageing and collection history. Provisions against bad debts are
made where appropriate.
Liquidity risk
Any impact on available cash and therefore the liquidity of the Group could
have a material effect on the business as a result.
The Group's borrowings are subject to semi-annual banking covenants against
which the Group has had significant headroom to date with no anticipated
issues based upon forecasts made. Short-term flexibility is achieved via the
Group's rolling credit facility. The following table shows the liquidity risk
maturity of financial liabilities grouping based on their remaining period at
the balance sheet date. The amounts disclosed are the contractual undiscounted
cash flows:
Within 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Total
£'m £'m £'m £'m £'m
30 March 2024
Interest-bearing loans 82 207 603 286 1,178
Lease liabilities 242 235 606 631 1,714
Trade payables 413 - - - 413
25 March 2023
Interest-bearing loans 117 40 480 489 1,126
Lease liabilities 229 217 550 627 1,623
Trade payables 382 - - - 382
Fair value
The fair value of our corporate bonds, which are all financial liabilities
held at amortised cost, has been determined by using the relevant quoted bid
price for those bonds. These differ to the carrying values as shown below.
Fair Value (Level 1) Carrying Value
As at 30 March 25 March 30 March 25 March
2024 2023 2024 2023
£'m £'m £'m £'m
High yield bond notes (2020) 152 374 155 398
High yield bond notes (2021) 231 210 248 248
High yield bond notes (2023) 269 N/A 247 N/A
The fair value of the other financial assets and liabilities of the Group are
not materially different from their carrying value. Refer to the table below.
These all represent financial assets and liabilities measured at amortised
cost except where stated as measured at fair value through profit and loss or
fair value through other comprehensive income.
As at 30 March 25 March
Financial assets 2024 2023
£'m £'m
Fair value through profit and loss
Forward foreign exchange contracts 2 1
Fair value through other comprehensive income
Forward foreign exchange contracts 3 0
Loans and receivables
Cash and cash equivalents 182 237
Trade receivables 12 11
Other receivables 22 10
As at 30 March 25 March
Financial liabilities 2024 2023
£'m £'m
Fair value through profit and loss
Forward foreign exchange contracts 4 8
Fair value through other comprehensive income
Forward foreign exchange contracts 6 5
Amortised cost
Lease liabilities 1,357 1,301
Interest-bearing loans and borrowings (excluding corporate bonds) 260 308
Trade payables 413 382
Other payables 21 16
27 Related party transactions
The Group has transacted with the following related parties over the periods:
Multi-lines International Company Limited, a supplier, and Centz Retail
Holdings Limited, a customer, are associates of the Group.
Ropley Properties Ltd, Triple Jersey Ltd, TJL UK Ltd, Rani Investments,
Fulland Investments Limited, Golden Honest International Investments Limited,
Hammond Investments Limited, Joint Sino Investments Limited and Ocean Sense
Investments Limited, all landlords of properties occupied by the Group, and
Rani 1 Holdings Limited, Rani 2 Holdings Limited and SSA Investments S.à.r.l.
(SSA Investments), bondholders and beneficial owners of equipment hired to the
Group, are directly or indirectly owned by the recently retired director Simon
Arora, his family, or his family trusts (together, the 'Arora related
parties').
In the current period, significant related party transactions occurred, with
Simon Arora, SSA Investments, Rani 1 Investments and Rani 2 Investments each
selling their full holdings of, respectively, £35m, £13m, £50m and £50m in
the 2020 3.625% corporate bonds as part of the tender exercise that took place
in November 2023.
There were significant related party transactions in the prior period, with
SSA Investments purchasing a total of £43m of our 4.00% corporate bonds and
£13m of our 3.625% corporate bonds in June 2022, and Simon Arora purchasing
£35m of our 3.625% corporate bonds over December 2022 and January 2023.
Purchases have been made in prior periods and the overall position is
summarised in the table below
with all related party bondholders being Arora related parties.
53 weeks ended 52 weeks ended
30 March 25 March
2024 2023
£'m £'m
Simon Arora (3.625%, 2025 bonds) - 35
SSA Investments (3.625%, 2025 bonds) - 13
SSA Investments (4.000%, 2028 bonds) 99 99
Rani 1 Investments (3.625%, 2025 bonds) - 50
Rani 2 Investments (3.625%, 2025 bonds) - 50
Total 99 247
The expense incurred during the year, and the accrual at the end of the year
are shown in the table below:
Expense Accrual Expense Accrual
to 30 March on 30 March to 25 March 2023 on 25 March 2023
2024 2024 £'m £'m
£'m £'m
Simon Arora 0.8 - 0.3 0.3
SSA Investments 4.3 1.5 4.0 1.6
Rani 1 Investments 1.2 - 1.8 0.4
Rani 2 Investments 1.2 - 1.8 0.4
Total 7.5 1.5 7.9 2.7
The following table sets out the total amount of trading transactions with
related parties included in the statement of comprehensive income:
Period ended 30 March 25 March
2024 2023
£'m £'m
Sales to associates of the Group
Centz Retail Holdings Limited 27 34
Total sales to related parties 27 34
Period ended 30 March 25 March
2024 2023
£'m £'m
Purchases from associates of the Group
Multi-lines International Company Ltd 259.0 193.7
Purchases from parties related to key management personnel
Fulland Investments Limited 0.3 0.2
Golden Honest International Investments Limited 0.2 0.2
Hammond Investments Limited 0.3 0.2
Joint Sino Investments Limited 0.2 0.2
Ocean Sense Investments Limited 0.2 0.2
SSA Investments 0.0 0.1
Total purchases from related parties 260.2 194.8
The IFRS 16 lease figures in relation to these related parties, which are all
related to key management personnel, are as follows:
Depreciation Interest Total charge Right-of-use Lease liability Net
charge charge asset liability
£'m £'m £'m £'m £'m £'m
Period ended 30 March 2024
Rani Investments 0 0 0 0 (0) (0)
Ropley Properties 2 1 3 7 (10) (3)
TJL UK Limited 1 0 1 10 (12) (2)
Triple Jersey Limited 9 3 12 53 (64) (11)
Total 12 4 16 70 (86) (16)
Depreciation Interest Total charge Right-of-use Lease liability Net
charge charge asset liability
£'m £'m £'m £'m £'m £'m
Period ended 25 March 2023
Rani Investments 0 0 0 1 (1) (0)
Ropley Properties 2 1 3 8 (11) (3)
TJL UK Limited 1 0 1 10 (12) (2)
Triple Jersey Limited 8 3 11 46 (57) (11)
Total 11 4 15 65 (81) (16)
There was one lease entered into by the Group during the current period with
the Arora related parties (2023: nil). The total expense on this lease in the
period was <£1m (2023: nil). There were no conditionally exchanged leases
with Arora related parties in the current period with a long stop completion
date (2023: <£1m, three leases).
The following tables set out the total amount of trading balances with related
parties outstanding at the period end.
As at 30 March 25 March
2024 2023
£'m £'m
Trade receivables from associates of the Group
Centz Retail Holdings Ltd 2 2
Total related party trade receivables 2 2
As at 30 March 25 March
2024 2023
£'m £'m
Trade payables to associates of the Group
Multi-lines International Company Ltd 32 7
Trade payables to companies owned by key management personnel
Rani Investments - 0
Ropley Properties Ltd 0 1
TJL UK Limited 1 1
Triple Jersey Ltd 0 2
Total related party trade payables 33 11
Outstanding trade balances at the balance sheet dates are unsecured and
interest free and settlement occurs in cash. There have been no guarantees
provided or received for any related party trade receivables or payables.
The balance with Multi-lines International Company Ltd includes $18m (2023:
$nil) held within a supply chain facility. See note 19 for more details.
The business has not recorded any impairment of trade receivables relating to
amounts owed by related parties as at 30 March 2024 (2023: no impairment).
This assessment is undertaken each year through examining the financial
position of the related party and the market in which the related party
operates.
The future lease commitments on the Arora related party properties are:
As at 30 March 25 March
2024 2023
£'m £'m
Not later than one year 16 14
Later than one year and not later than two years 15 13
Later than two years and not later than five years 39 35
Later than five years 33 35
Total 103 97
See note 12 for further information on the Group's associates.
For further details on the transactions with key management personnel, see
note 8 and the remuneration report.
28 Capital management
For the purpose of the Group's capital management, capital includes issued
capital and all other equity reserves attributable to the equity holders of
the parent. The primary objective of the Group's capital management is to
maximise the shareholder value.
In order to achieve this overall objective, the Group's capital management,
amongst other things, aims to ensure that it meets financial covenants
attached to the interest-bearing loans and borrowings that define capital
structure requirements. Breaches in meeting the financial covenants would
permit the bank to immediately call loans and borrowings. There have been no
breaches in the financial covenants of any interest-bearing loans and
borrowing in the current or prior period.
The Group manages its capital structure and makes adjustments in light of
changes in economic conditions and the requirements of the financial
covenants.
To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares.
The Group uses the following definition of net debt:
External interest-bearing loans and borrowings less cash and short-term
deposits.
The interest-bearing loans figure used is the gross amount of cash borrowed at
that time, as opposed to the carrying value under the amortised cost method.
As at 30 March 25 March
2024 2023
£'m £'m
Interest-bearing loans and borrowings (note 21) 919 961
Less: Cash and short-term deposits (note 18) (182) (237)
Net debt 737 724
29 Post balance sheet events
On 29 May 2024, shareholders appointed Nadia Shouraboura as a further
Independent Non-Executive Director to the Board of Directors of the Company,
with immediate effect and until the Annual General Meeting to be held on 23
July 2024. Nadia's CV is included in the annual management report for the
financial year ended March 2024.
On 4 June 2024, the Group's Nomination Committee and Board of Directors agreed
that Tiffany Hall be proposed as the successor to Peter Bamford in the role as
Chair of the Board of Directors. As such, Peter Bamford does not intend to
stand for re-election at the AGM in July 2024.
30 Dividends
An interim dividend of 5.1 pence per share (£51.1m) was declared in October
2023 and has been paid.
A special dividend of 20.0 pence per share (£200.6m), was declared in January
2024 and has been paid.
A final dividend of 9.6 pence per share (£96.3m), giving a full year dividend
of 14.7 pence per share (£147.4m), is proposed.
Relating to the prior year;
An interim dividend of 5.0 pence per share (£50.1m) was declared in November
2022 and has been paid.
A special dividend of 20.0 pence per share (£200.4m), was declared in January
2023 and has been paid.
A final dividend of 9.6 pence per share (£96.2m), giving a full year dividend
of 14.6 pence per share (£146.3m), was declared in July 2023 and has been
paid.
31 Contingent liabilities and guarantees
As at 30 March 2024, B&M European Value Retail S.A., B&M European
Value Retail 1 S.à r.l., B&M European Value Retail 2 S.à r.l., B&M
European Value Retail Holdco 1 Ltd, B&M European Value Retail Holdco 2
Ltd, B&M European Value Retail Holdco 3 Ltd, B&M European Value Retail
Holdco 4 Ltd, EV Retail Ltd, B&M Retail Ltd, Heron Food Group Ltd and
Heron Foods Ltd are all guarantors to both the loan and notes agreements which
are formally held within B&M European Value Retail S.A. The amounts
outstanding as at the period end were £250m for the loans, with the balance
held in B&M European Value Retail Holdco 4 Ltd, and £656m for the notes,
with the balance held in B&M European Value Retail S.A.
As at 25 March 2023, B&M European Value Retail S.A., B&M European
Value Retail 1 S.à r.l., B&M European Value Retail 2 S.à r.l., B&M
European Value Retail Holdco 1 Ltd, B&M European Value Retail Holdco 2
Ltd, B&M European Value Retail Holdco 3 Ltd, B&M European Value Retail
Holdco 4 Ltd, EV Retail Ltd, B&M Retail Ltd, Heron Food Group Ltd and
Heron Foods Ltd are all guarantors to both the loan and notes agreements which
are formally held within B&M European Value Retail S.A. The amounts
outstanding as at the period end were £300m for the loans, with the balance
held in B&M European Value Retail Holdco 4 Ltd, and £650m for the notes,
with the balance held in B&M European Value Retail S.A.
32 Directors
The Directors that served during the period were:
P Bamford (Chairman)
A Russo (CEO)
M Schmidt (CFO)
R McMillan
T Hall
P MacKenzie
O Tant
S Arora (retired 21 April 2023)
H Lasry (appointed 22 September 2023)
C Bradley (retired 25 July 2023)
On 23 January 2024, Peter Bamford announced he will be resigning as Chairman
of the Group before the end of our next financial year, 29 March 2025.
On 22 March 2024, the Group announced the appointment of Nadia Shouraboura as
a Non-Executive Director, with effect from 29 May 2024.
On 4 June 2024, the Group's Nomination Committee and Board of Directors agreed
that Tiffany Hall be proposed as the successor to Peter Bamford in the role as
Chair of the Board of Directors. As such, Peter Bamford does not intend to
stand for re-election at the AGM in July 2024.
All Directors served for the whole period except were indicated above.
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