REG - B&M European - FY25 Interim Results
14/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241114:nRSN1676Ma&default-theme=true
RNS Number : 1676M B&M European Value Retail S.A. 14 November 2024
14 November 2024
FY25 Interim Results
Disciplined execution: volumes growing and well set up for the Golden Quarter
B&M European Value Retail S.A. ("the Group"), the UK's leading variety
goods value retailer, today announces its interim results for the 26 weeks to
28 September 2024.
Highlights
Fascia performance(1) Revenue £'m Revenue growth % Adjusted EBITDA(2)
(pre-IFRS 16) margin %
H1 FY25 H1 FY24 H1 FY25 H1 FY24 H1 FY25 H1 FY24
B&M UK
2,121 2,045 3.7% 8.1% 11.3% 11.5%
B&M France
247 232 6.8% 26.1% 6.9% 7.8%
Heron Foods
276 272 1.1% 17.0% 6.7% 6.6%
· Group revenues increased by 3.7% to £2,644m (+3.9% constant currency(3))
driven by volume growth. B&M UK total sales growth improved across the
half with 6.0% in Q2 up from 1.5% in Q1, supported by improving
like-for-likes(4) of (1.9)% in Q2 up from (5.1)% in Q1
· Opened 39 gross new stores across the Group in H1 (30 in B&M UK, 5 in
France and 4 in Heron)
· Group adjusted EBITDA(2) (pre-IFRS 16) of £274m up 2.0% (H1 FY24: £269m),
with a margin of 10.4% (H1 FY24: 10.5%)
· Group adjusted operating profit(2) of £258m (H1 FY24: £263m), with statutory
operating profit of £235m (H1 FY24: £275m) and statutory profit before tax
of £169m (H1 FY24: £222m)
· Post-tax free cash flow(5) of £73m (H1 FY24: £143m), with a clean inventory
position exiting Spring/Summer and early Autumn/Winter shipments to derisk
Golden Quarter execution
· To futureproof volume growth, a new UK imports centre will be opened in FY26,
optimising existing distribution centre network capacity levels; 2024 physical
container volumes are +40% vs. 2019, reflecting the step change in market
share achieved
· Net debt(7) to adjusted EBITDA(2) (pre-IFRS 16) leverage ratio of 1.2x (H1
FY24: 1.1x). Net debt including leases was 2.5x (H1 FY24: 2.4x)
· Interim dividend(6) of 5.3p per Ordinary Share will be paid on 13 December
2024 (H1 FY24: 5.1p)
· FY25 Group adjusted EBITDA(2) (pre-IFRS 16) expected to be in the range of
£620m-£660m (FY24 52/53 weeks: £616m/£629m), with growing volume momentum,
particularly in general merchandise
· Smooth transition of executive team; succession plan in place for the
retirement of the Group Trading Director in March 2025
· Formal review of the parent company's corporate domicile underway to simplify
administrative processes and enable greater flexibility in returning capital
to shareholders, including through share buybacks
Alex Russo, Chief Executive, said:
In the first six months, we delivered Group adjusted EBITDA(2) (pre-IFRS 16)
up 2.0% to £274m driven by total sales growth of 3.7%. This is a good
performance as we annualise a record prior year of earnings growth with strong
first half comparatives. We continue to execute with Everyday Low Price
("EDLP") integrity for all our customers, with industry leading availability
and excellence in operational standards. Our model is underpinned by a
disciplined and low-cost approach across all three of our businesses, focusing
on simple, sustainable growth, delivered through the hard work of our teams.
Our product ranges across both grocery and general merchandise resonate very
well with customers at a time when disposable incomes remain under pressure
and the tax burden continues to increase. We have made significant progress
over the last three months in general merchandise, particularly in Home, with
the range strengthened and prices lowered further to drive volume market
share.
Our new store opening programme is on track and performing exceptionally well.
To futureproof this volume growth, I am pleased to announce that next year we
will open a new imports centre in Ellesmere Port. This facility will manage
inbound container flow and optimise the capacity of our five existing B&M
UK distribution centres which are handling ever-growing volumes. This is the
right productivity step to support both our short and long-term growth plans,
including our target of not less than 1,200 B&M UK stores. We are
currently extending our French distribution centre demonstrating the growth
plans in place for France.
Our long-term ambition for the Group remains unchanged, in supporting
customers with exceptional value. As we trade through the Golden Quarter, we
are encouraged by recent volume momentum and remain focussed on delivering
profitable, cash-generating growth for all of our shareholders.
Outlook and guidance
The business is well positioned for the Golden Quarter with its continued
focus on price, product and standards. While the consumer environment remains
uncertain, the Group has demonstrated it executes well in all trading
environments.
With growing volume momentum, and with broadening strength in general
merchandise, we are confident in our outlook for the second half and the full
year. We anticipate full-year Group adjusted EBITDA(2) (pre-IFRS 16) to be in
the range of £620m-£660m (FY24 52/53 weeks: £616m/£629m).
Financial results (unaudited)
H1 FY25 H1 FY24 Change
Group revenue £2,644m £2,549m 3.7%
Group adjusted EBITDA(2) (pre-IFRS 16) £274m £269m 2.0%
Group adjusted EBITDA(2) (pre-IFRS 16) margin % 10.4% 10.5% (18) bps
Group adjusted operating profit(2) £258m £263m (1.8)%
Group statutory operating profit £235m £275m (14.6)%
Group statutory operating profit margin % 8.9% 10.8% (190) bps
Post-tax free cash flow(5) £73m £143m (49.2)%
Group cash generated from operations £303m £352m (14.1)%
Group statutory profit before tax £169m £222m (23.8)%
Adjusted (pre-IFRS 16) diluted EPS(2) 14.7p 15.4p (4.8)%
Statutory diluted EPS 12.3p 16.3p (24.9)%
Ordinary dividends(6) 5.3p 5.1p 3.9%
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 account. See notes 3 and 4 of the financial information 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 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. This 14-month
approach has been adopted as it excludes the 2-month halo period which new
stores experience following opening.
5. 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 £303m (H1 FY24: £352m). This statutory
definition excludes payments for leased assets including the leasehold
property estate.
6. Dividends are stated as gross amounts before deduction of
Luxembourg withholding tax which is currently 15%.
7. Net debt comprises interest bearing loans and borrowings, overdrafts
and cash and cash equivalents. Net debt was £788m at the half year end (H1
FY24: £700m), reflecting £973m (H1 FY24: £924m) as the carrying value of
gross debt netted against £185m of cash (H1 FY24: £224m). See note 7 of the
financial information for more details.
Results Presentation
An in-person presentation for analysts in relation to these FY25 Interim
Results will be held today at 09:30 am (UK) at London Stock Exchange, 10
Paternoster Square, London, EC4M 7LS. 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) for
analysts and investors only.
A further call for North American investors only is scheduled today at 16:00
(GMT). To register please contact Dave McCarthy via email at
dave.mccarthy@bmstores.co.uk (mailto:dave.mccarthy@bmstores.co.uk)
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 +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 764 stores in
the UK operating under the "B&M" brand, 338 stores under the "Heron Foods"
and "B&M Express" brands, and 129 stores in France also operating under
the "B&M" brand as at 28 September 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
I am pleased to report another period of good performance following a
record-setting prior year that featured a particularly strong first half. This
is a good position to reflect on the journey that the Group has been on over
the last five years and assess the significant opportunity for profitable
growth in the years ahead. Today the Group is structurally bigger and stronger
compared to FY20, with revenues over 40% higher than the last pre-pandemic
year. We will continue to deliver profitable, cash-generating growth across
the UK and France through positive like-for-like performance and targeted
space growth.
We will remain disciplined and focused on our key fundamentals - price,
product and standards. Momentum has built through the first six months and we
exited with a clean stock position and a business well set up for the Golden
Quarter. In the first half, despite the unseasonal weather and timing of
Easter, we delivered volume-led Group sales growth of 3.7% overall, with
second quarter sales growth increasing to 5.8%. The store rollout programme is
on track across the Group as we opened 39 gross new stores. Group adjusted
EBITDA(2) (pre-IFRS 16) rose 2.0% to £274m and we are pleased to announce an
interim dividend(5) of 5.3p per share.
The Group's long-term outlook is strong. Our balanced operations in buying,
logistics, and retail drive efficiency, ensure excellent customer
availability, and yield best-in-class returns on investment. In the UK, our
long-term store target, of not less than 1,200 B&M stores gives
significant upside from our current 764 store estate today. In France, the
potential is even greater, with a significant white space expansion
opportunity ahead over the long-term. Meanwhile, Heron Foods continues to
maintain strong margins and cash returns, while growing its brand reach.
Growth strategy update
The growth fundamentals of the Group are strong and the business is run in a
highly disciplined manner focused on pricing integrity, product and
operational standards which will continue to generate a high quality of
earnings in the short and long-term.
We pride ourselves on our EDLP approach that avoids the cost and complexities
of high-low pricing and loyalty schemes. We are very confident in our absolute
and relative price position, which for B&M UK is 15-20% lower (inclusive
of loyalty schemes) on FMCG branded lines compared to mainstream supermarkets.
We measure this weekly, picking up a consistent and well-balanced assortment
of hundreds of lines across all our categories that represent a customer's
broad basket. In general merchandise, the market is highly fragmented and as
we leverage our large order book across our limited number of directly sourced
ranges, our relative price position is even stronger.
We maintain discipline on our SKU count across both FMCG and general
merchandise. In FMCG, B&M stocks 4,500 lines of best-selling branded
products, which are largely ambient grocery items. Our 5,500 general
merchandise products are trend-led and change seasonally as we drive the
return on space in our stores. The quality of our ranges has improved
significantly over the last five years which has helped broaden the appeal,
particularly in Home categories. This strengthening of our product offer over
the last three months coupled with low, sharp prices provides our customers
with outstanding value. Our selection has never looked better which is
translating into momentum in general merchandise, particularly in Q2.
Store standards remains a constant focus of the business with the B&M UK
senior retail team visiting over 350 stores each week. Our stores operate
consistently over 8 out of 10 every week. All respective retail and store
teams drive this process and have a clear passion for delivering retail
excellence for our customers. I am pleased that for the third successive year,
staff turnover has decreased by c.500bps per annum. I take great confidence
from the pride that our teams take in each of their stores.
Our new stores are performing exceptionally well. We plan to open 45 B&M
UK new stores this year, with 30 already opened in the first half and we
target a similar number of openings next year. We have opened 44 ex-Wilko
stores to date with 8 more to open in the second half of the year. As with all
of our new openings, these stores are performing well and we expect them to
pay-back within 12 months on average, in line with prior experience.
Our long-term goal is to reach not less than 1,200 B&M UK stores over the
next decade, based on demographics, store performance, and competitor
weakness. To support our volume growth, we plan to open a new UK imports
centre in FY26 dedicated solely to general merchandise inbound containers. Our
annual container volumes have grown by 40% over the period 2019-2024 and this
development will free up space in our existing five distribution centres,
increasing their capacity and efficiency as we continue our disciplined
growth.
In France, we have long-term growth ambitions given the significant white
space expansion opportunity ahead. As with the UK business, we have
strengthened the supply chain to support further volume growth, a new
Warehouse Management System (WMS) has been successfully implemented in the
first half which will help optimise and manage warehouse operations. We are
currently extending the French distribution centre which will add further
capacity for volume growth. Both projects will help unlock the exciting growth
potential in France.
We are now well into the third year of demonstrating sustained higher
post-pandemic financial performance. Structural factors have improved our
revenue and gross margin, sustainably supporting our long-term B&M UK
adjusted EBITDA(2) (pre-IFRS 16) margin at 12-13% and driving our cash
generation. Key factors include our increased buying power (revenues >40%
higher than in FY20), strengthened product ranges that appeal to a broader
range of customers and an evolved category mix. Additionally, our buying
strategy has evolved. We purchase on a "test and repeat" basis for new general
merchandise products, placing smaller initial orders, reducing the markdown
risk while maintaining buying power.
In summary, gross margin depends on three factors: purchase price, selling
price and mix. We buy more, we sell more, and we serve a higher number of
customers than ever before. It is this sales growth in B&M UK over recent
years that has expanded profit margins. Our proposition is all about volume
growth, and we are perfectly suited (with our EDLC structure) to continue to
leverage the volume and grow earnings in the long-term.
Competitive position
The growth of discounting remains strong across the UK and in other parts of
the world. Research shows that Lidl is the fastest-growing major UK
supermarket, and Aldi's consumer penetration remains strong. These food
discounters are complementary to B&M's range of best-selling ambient
branded products, and together we continue to gain volume market share.
People
Our colleagues remain as committed as ever and are critical to the future
success of the Group and I thank them all for their contributions and hard
work. Many of our colleagues, particularly store colleagues, grow with the
company - from customer service assistant to store manager and beyond. We
develop our teams within the business and promote hard working and ambitious
people across all functions. This is key to the long-term success of B&M
and is something that I am passionate about.
Succession plans are in place for the leadership of the trading function at
B&M UK. The Group confirms that Bobby Arora, Group Trading Director, will
retire from B&M in March 2025. Bobby has agreed to provide advisory
services to the Group for a short period following the commencement of his
retirement. Along with his brother Simon, Bobby has made an immense
contribution to B&M's growth and success over many years. As CEO, Bobby
has been a valued partner to work personally with and I wish him the very best
in his retirement, on behalf of the business.
Bobby will be succeeded by Gareth Bilton and this handover is already well
progressed. Gareth has over 25 years experience at B&M and he leads a
strong and experienced buying and merchandising team. James Kew has been
appointed Retail Director at B&M UK. James has over 11 years' experience
leading store operations within the business, having started his career as a
store manager.
I believe in internal talent progression, and both Gareth and James are great
examples of leaders who understand the B&M culture. I wish them both well
for the future.
Redomicile
The Group has commenced a formal review of options to relocate the parent
company's corporate domicile, to simplify administrative processes and enable
greater flexibility in returning capital to shareholders, including through
share buybacks. The project, which is being undertaken in conjunction with
external advisers, is at an early stage and there can be no certainty that any
change will ultimately be implemented. The Group intends to retain its London
listing in the event that any change is ultimately implemented. An update will
be provided in early 2025.
Alex Russo
Chief Executive Officer
13 November 2024
Financial review
Group
£'m H1 FY25 H1 FY24 YoY Change
Revenue 2,644 2,549 3.7%
Gross profit 996 941 5.9%
% 37.7% 36.9% 78 bps
Adjusted operating costs (721) (672) 7.4%
Adjusted EBITDA(1) (pre-IFRS 16) 274 269 2.0%
% 10.4% 10.5% (18) bps
Depreciation and amortisation (pre-IFRS 16) (44) (40) 10.1%
Operating impact of IFRS 16* 28 34 (17.6)%
Adjusted operating profit(1) 258 263 (1.8)%
Adjusting items(1) (23) 12 (298.8)%
Statutory operating profit 235 275 (14.6)%
Finance costs relating to right-of-use assets (38) (32) 17.3%
Other net finance costs (28) (21) 35.6%
Statutory profit before tax 169 222 (23.8)%
*includes depreciation on right-of-use assets of £90m (H1 FY24: £85m). H1
total depreciation & amortisation was £134m (H1 FY24: £124m)
Group revenues for the 26 weeks ended 28 September 2024 increased by 3.7%,
(3.9% on a constant currency basis(2)), with growth across all fascias. Q1
delivered 2.9% total sales growth and momentum built into Q2 with 5.8% total
sales growth. In B&M UK, our store opening programme is well on track and
new space provided 7.3% sales growth that was offset against a 3.6% decline in
like-for-like(3) (LFL) sales. Both B&M France and Heron Foods also
delivered total sales growth in the half.
Group gross profit increased by 5.9% year-on-year (YoY) with a particularly
strong trading margin performance in B&M UK. This was driven by mix
benefits within general merchandise categories, favourable foreign exchange,
lower freight rates, and excellent execution of the Spring/Summer season that
resulted in limited markdowns being required.
Group adjusted operating costs on an underlying basis(4) grew by 7.0% to
£710m (H1 FY24: £664m). The number of stores across the Group increased by
6.2% or 72 stores year-on-year, with the remaining increase coming from
investment in our supply chain in France and increases in UK minimum wage
rates that are not yet offset through productivity gains.
Group adjusted EBITDA(2) (pre-IFRS 16) increased by 2.0% to £274m,
representing a margin of 10.4%. This was driven by sales growth, with cost
pressures across the Group well managed.
Group adjusted operating profit(2) decreased by 1.8%. Total depreciation and
amortisation grew by 7.3% to £134m which moved in line with the continued
growth of the store estate.
Adjusting items(2) were a net charge of £23m (H1 FY24: net credit of £12m).
The primary driver of this was the fair value of our unmatured foreign
exchange derivatives (£19m loss, H1 FY24: £12m gain). For further details
please see note 3 of the financial statements. During the period there was
also a £2m one-off charge in relation to the Wilko store leases acquired
under the September 2023 option agreement and a £2m charge in relation to an
accrual for the management retention bonus for the Group Trading Director,
both of which were not present in the comparative period.
Statutory operating profit decreased by 14.6%, primarily reflecting the impact
of adjusting items mentioned above.
Excluding IFRS 16, net finance costs increased by £7m to £28m primarily due
to higher interest charges on the £250m high yield bond issued in November
2023. Finance charges relating to right-of-use assets increased by £6m to
£38m due to the additional leases associated with the store opening programme
and higher discount rates in recent years.
B&M UK
In B&M UK(5), total revenues increased by 3.7% to £2,121m (H1 FY24:
£2,045m), with LFL(3) revenues down 3.6%. Our Q1 LFL(3) of (5.1)% was
impacted by calendar effects of peak Easter 2024 trading falling into the
previous 53-week period and particularly wet weather. However, LFL(3)
performance improved in the second quarter to (1.9)%. New space added 7.3%
growth in the half due to the opening of 52 net new stores in the store estate
year-on-year. Our balanced sales mix between FMCG and General Merchandise
remains intact and in-line with our expectations.
Our trading gross margin rose 66 bps year-on-year to 36.7% from 36.0%. This
reflected favourable freight rates, mix effects, and from strong sell-through
in general merchandise which generated minimal markdown activity. Statutory
gross margin increased 82 bps to 37.6% from 36.8%, with the difference to
trading gross margin reflecting principally foreign exchange derivative
accounting.
There were 30 gross (23 net) new stores openings in H1, representing
significant progress to the full financial year target of at least 45 new
stores. These new stores are trading well across a diverse range of locations.
Return on investment for our store opening programme remains in-line with our
expectations of an average payback of 1 year - inclusive of net working
capital and all operating expenses. Analysing the most recent openings that
have had a full financial year of trading, specifically a cohort of 35 stores
that opened between April 2022 and September 2023, we invested £50m in store
fit-out, pre-opening operating expenditure and estimated increased working
capital. This cohort generated £50m of profit contribution over the last
twelve months (after fully accounting for direct logistics, central costs and
store rents). The total average square footage of the B&M UK store estate
at the period end was 16.3m, an increase of 5.9% year-on-year.
In addition to revenue generated in-store, B&M UK revenues also included
£14m of wholesale revenues (H1 FY24: £15m), the majority of which
represented sales made to our associate Centz Retail Holdings Limited, a chain
of 56 variety goods stores in the Republic of Ireland.
Adjusted operating costs on an underlying basis(4) increased by 7.3% to £547m
(25.8% of revenue) from £509m (24.9% of revenue). The increase in operating
costs year-on-year is primarily due to the 7.3% increase in the store estate.
Adjusted EBITDA(1) (pre-IFRS 16) increased by 2.4% to £240m (H1 FY24:
£235m), with adjusted margin decreasing slightly by 15 bps to 11.3% (H1 FY24:
11.5%), due to the revenue growth described above, offset by increased
underlying operating cost base and foreign exchange retranslation losses
year-on-year. Adjusted operating profit(1) was £228m (H1 FY24: £228m) with a
margin of 10.8% (H1 FY24: 11.2%).
Statutory profit before interest and tax for the period was £228m (H1 FY24:
£230m).
B&M France
In France, revenues increased by 6.8% to £247m (H1 FY24: £232m). This was a
good result especially given the strong comparative period being annualised.
The performance reflects volume growth from new stores and a positive LFL
driven by the evolution to a more focused FMCG and general merchandise range.
The business is on track to open 11 new stores by the end of the financial
year, with 5 opened in H1 FY25.
Adjusted operating costs on an underlying basis(4) increased by £10m to
£93m. This increase reflects volume growth and also one-off warehouse
investment costs that arose from the successful implementation of a new
warehouse management system.
Adjusted EBITDA(1) (pre-IFRS 16) decreased to £17m (H1 FY24: £18m)
representing an adjusted EBITDA margin of 6.9% compared to 7.8% last year due
to the higher operating costs described above. We continue to expect B&M
France to grow its EBITDA margins over time reducing the differential with
B&M UK. Adjusted operating profit(1) was £18m (H1 FY24: £20m) with a
margin of 7.1% (H1 FY24: 8.7%).
Statutory profit before interest and tax for the period was £18m (H1 FY24:
£20m).
Heron Foods
Our discount convenience offering, Heron Foods, performed resiliently
generating revenues of £276m. This represents a 1.1% increase from H1 FY24
(£272m) despite continued pressure on its customer base. Heron will continue
its strategy of maintaining competitive prices and delivering exceptional
value on everyday essentials and clearance specials.
Adjusted operating costs on an underlying basis(4) remained flat at £69m
(25.2% of revenue) and as a % to revenue compared to the prior year (25.3% of
revenue), with good operational discipline firmly present in the business.
Heron opened 4 gross (3 net) new stores in the period and remains on track to
open between 18 and 20 in total for the full year.
Adjusted (pre-IFRS 16) EBITDA(1) increased by 2.4% to £18m (H1 FY24: £18m)
representing a sector-leading margin of 6.7% (H1 FY24: 6.6%). Adjusted
operating profit(1) was £13m (H1 FY24: £15m) with a margin of 4.8% (H1 FY24:
5.5%).
Statutory profit before interest and tax for the period was £13m (H1 FY24:
£15m).
Post-tax free cash flow(6), capital expenditure and leverage
Post-tax free cash flow(6) of £73m (H1 FY24: £143m), represents a £70m
reduction year-on-year caused primarily by an increase in working capital of
£86m in the first half. Group inventory levels increased by £234m due to a
materially larger number of stores and also due to earlier shipping dates
selected to mitigate the impact of the Red Sea disruption.
Group net capital expenditure, excluding IFRS 16 right-of-use asset additions,
was £59m (H1 FY24: £48m). This included £28m spent on 39 gross new stores
opened in the first half across the Group (H1 FY24: £18m on 28 stores), £20m
on maintenance works (<1% of H1 revenues) to ensure that our existing store
estate and warehouses are appropriately invested (H1 FY24: £13m), and a total
of £11m on infrastructure projects and opportunistic freehold acquisitions or
disposals (H1 FY24: £17m).
Net debt(7) to last-twelve-months adjusted EBITDA(1) (pre-IFRS 16) is at 1.2x
at the end of H1 FY24 (H1 FY24: 1.1x), maintaining the ratio within the lower
half of our target range, despite additional stock build up. Incorporating
IFRS 16, net debt to last twelve-months adjusted EBITDA was 2.5x (H1 FY24:
2.4x).
Dividend
The Group has previously paid ordinary dividends at 30-40% of adjusted
(pre-IFRS 16) retained profit per annum, in-line with our capital allocation
policy which has remained unchanged since our IPO in 2014.
In recent years, the Group has consistently paid at the top end of this range,
reflecting our robust financial position and strong cash generation that is
underpinned by our disciplined approach to capital investment and working
capital. These ordinary dividends have been also supplemented by additional
special dividends typically announced following the end of Christmas peak
trading.
In total, the Group has returned over £1.9bn in total dividends since March
2020, and in excess of 60% of this amount has come as special dividends. Given
the outlook for the Group, the Board consider it appropriate to increase for
FY25 the payout range for ordinary dividends to 40-50% of after-tax adjusted
earnings (post-IFRS 16), with an aim to consistently payout a progressive
ordinary dividend near the mid-point of that 40-50% range over time.
An interim dividend of 5.3p(8) per Ordinary Share will therefore be paid on 13
December 2024 to shareholders on the register at 22 November 2024. The
ex-dividend date will be 21 November 2024. The dividend payment will be
subject to a deduction of Luxembourg withholding tax of 15%.
Shareholders and Depository Interest holders can obtain further information on
the methods of receiving their dividends on our website or by visiting the
website of our Registrar, Capita Asset Services at www.capitashareportal.com
(http://www.capitashareportal.com) .
Financial Guidance
As previously communicated in FY24, we have adopted a revised approach to
guidance and current trading disclosures across our financial calendar. At
our preliminary annual results we provide broad guidance for the upcoming
financial year. Alongside our interim results in November, we provide a narrow
guidance range for Group adjusted EBITDA(1) (pre-IFRS 16) and also Group
adjusted operating profit(1). We feel that Group trading performance is best
assessed over meaningful periods of at least 13 weeks, so we will not provide
current trading updates in either the preliminary results or interim results.
Instead, trading updates are given in scheduled Q1, Q3 (Golden Quarter) and Q4
pre-close statements. This approach is unchanged from that shared in November
2023.
As outlined in the CEO review, the Directors expect Group adjusted EBITDA(1)
(pre IFRS-16) of between £620m-£660m across the full financial year (FY24
52/53 weeks: £616m/£629m). This is indicatively equivalent to Group adjusted
operating profit(1) of £590m and £630m (FY24 52/53 weeks: £602m/£614m).
This guidance range is based on our expectation that trading momentum will
continue to build from the first half. It also reflects our unchanged
expectation that B&M UK will operate with an adjusted EBITDA(1) (pre-IFRS
16) margin of between 12-13%.
We have consciously built our Autumn/Winter stock-holding early to remove the
risk of supply chain disruption. This will normalise by the end of the
financial year, with inventory growth reflecting the Group's additional
stores, Easter timing differences and the current two-week longer container
shipping times. Partially mitigating this growth, our working capital will
benefit from a normalisation of the timing of VAT payments, meaning that we
expect growth in working capital for the full financial year to be no more
than £50m.
We also have announced plans for B&M UK to open a new imports centre
within the next twelve months. We expect that this will require up to £20m
of capital expenditure that will be split across the FY25 and FY26 financial
years and will be funded within existing capital expenditure budgets, with
operating cost ratios expected to be unchanged given the higher volumes being
handled.
Principal risks and uncertainties
The principal risks and uncertainties faced by the Group remain those as set
out on page 23 to 29 of our Annual Report and Financial Statement 2024: supply
chain; competition; economic environment; regulation and compliance;
international expansion; political uncertainty; IT systems, cyber security and
business continuity; key management reliance and store expansion. During the
period the Group's Directors considered whether the risk exposure had changed
in any of the identified areas, and whether the Group was exposed to new
risks. The Directors noted an increase in risks on supply chain given
escalating global political tension and continued Red Sea disruption, and also
from regulation and compliance however felt that neither of these increases
materially changed the Group's risk profile.
Mike Schmidt
Chief Financial Officer
13 November 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 account. See notes 3 and 4 of the financial information 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 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. This 14-month
approach has been adopted as it excludes the 2-month halo period which new
stores experience following opening.
4. 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 retranslation
losses in relation to derivative adjustments of £11m (H1 FY24: £8m loss).
Group adjusted operating costs, excluding depreciation and amortisation, as a
% of revenues increased to 27.3% from 26.3%.
5. 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.
6. 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 £303m (H1 FY24: £352m). This statutory
definition excludes payments for leased assets including the leasehold
property estate.
7. Net debt comprises interest bearing loans and borrowings, overdrafts
and cash and cash equivalents. Net debt was £788m at the half year end (H1
FY24: £700m), reflecting £973m (H1 FY24: £924m) as the carrying value of
gross debt netted against £185m of cash (H1 FY24: £224m). See note 7 of the
financial information for more details.
8. Dividends are stated as gross amounts before deduction of
Luxembourg withholding tax which is currently 15%.
Condensed Consolidated Statement of Comprehensive Income
26 weeks ended
28 September 2024 26 weeks ended 53 weeks ended
23 September 30 March
2023 2024
Note £'m £'m £'m
Revenue 2 2,644 2,549 5,484
Cost of sales (1,648) (1,608) (3,449)
Gross profit 996 941 2,035
Administrative expenses (761) (666) (1,427)
Operating profit 3 235 275 608
Share of losses in associates - - (1)
Profit on ordinary activities before interest and tax 235 275 607
Finance costs on lease liabilities (38) (32) (69)
Other finance costs (30) (22) (50)
Finance income 2 1 10
Profit on ordinary activities before tax 169 222 498
Income tax expense 5 (46) (58) (131)
Profit for the period 123 164 367
Other comprehensive income for the period
Items that may be subsequently reclassified to profit or loss:
Exchange differences on retranslation of subsidiaries and associates (2) (1) (3)
Fair value movements recorded in the hedging reserve (28) 1 (22)
Tax effect of other comprehensive income 6 (2) 1
Total other comprehensive income (24) (2) (24)
Total comprehensive income for the period 99 162 343
Earnings per share
Basic earnings attributable to ordinary equity holders (pence) 4 12.3 16.4 36.6
Diluted earnings attributable to ordinary equity holders (pence) 4 12.3 16.3 36.5
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
condensed consolidated financial statements.
Condensed Consolidated Statement of Financial Position
Note 28 September 2024 Restated*
£'m 23 September 2023 30 March
Assets £'m 2024
£'m
Non-current
Goodwill 920 921 921
Intangible assets 121 124 121
Property, plant and equipment 439 383 421
Right-of-use assets 1,103 1,052 1,101
Investments in associates 5 8 5
Other receivables 8 5 5
Other financial assets - - 1
Deferred tax asset 5 3 4
2,601 2,496 2,579
Current
Cash and cash equivalents 185 224 182
Inventories 1,007 856 776
Trade and other receivables 79 103 76
Other current financial assets - 12 4
Income tax receivable 14 15 8
1,285 1,210 1,046
Total assets 3,886 3,706 3,625
Equity
Share capital 6 (100) (100) (100)
Share premium (2,484) (2,480) (2,481)
Retained earnings (151) (171) (125)
Hedging reserve 29 (4) 10
Legal reserve (10) (10) (10)
Merger reserve 1,979 1,979 1,979
Foreign exchange reserve (5) (9) (7)
(742) (795) (734)
Non-current liabilities
Interest-bearing loans and borrowings 7 (728) (873) (881)
Lease liabilities (1,184) (1,128) (1,187)
Deferred tax liabilities (12) (20) (25)
Other financial liabilities (3) - (0)
Provisions (4) (4) (4)
(1,931) (2,025) (2,097)
Current liabilities
Interest-bearing loans and borrowings 7 (236) (43) (29)
Trade and other payables (724) (644) (572)
Lease liabilities (195) (182) (170)
Other financial liabilities (46) (3) (10)
Income tax payable (6) (7) (7)
Provisions (6) (7) (6)
(1,213) (886) (794)
Total liabilities (3,144) (2,911) (2,891)
Total equity and liabilities (3,886) (3,706) (3,625)
* The statement of financial position has been restated for September 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 this
financial information. The condensed financial statements were approved by the
Board of Directors on 13 November 2024 and signed on their behalf by:
A. Russo, Chief Executive Officer.
Condensed 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 25 March 2023 100 2,478 104 (3) 10 (1,979) 10 720
Ordinary dividend payments to owners - - (96) - - - - (96)
Effect of share options 0 2 (1) - - - - 1
Total for transactions with owners 0 2 (97) - - - - (95)
Profit for the period - - 164 - - - - 164
Other comprehensive income - - - (1) - - (1) (2)
Total comprehensive income for the period - - 164 (1) - - (1) 162
Hedging gains & losses reclassified as inventory - - - 8 - - - 8
Balance at 23 September 2023 100 2,480 171 4 10 (1,979) 9 795
Ordinary dividends declared - - (51) - - - - (51)
Special dividend payments to owners - - (201) - - - - (201)
Effect of share options - 1 2 - - - - 3
Total for transactions with owners - 1 (250) - - - - (249)
Profit for the period - - 203 - - - - 203
Other comprehensive income - - 1 (21) - - (2) (22)
Total comprehensive income for the period - - 204 (21) - - (2) 181
Hedging gains & losses reclassified as inventory - - - 7 - - - 7
Hedging gains & losses reclassified as finance costs - - - 0 - - - 0
Balance at 30 March 2024 100 2,481 125 (10) 10 (1,979) 7 734
Ordinary dividend payments to owners - - (96) - - - - (96)
Effect of share options 0 3 (1) - - - - 2
Total for transactions with owners 0 3 (97) - - - - (94)
Profit for the period - - 123 - - - - 123
Other comprehensive income - - - (22) - - (2) (24)
Total comprehensive income for the period - - 123 (22) - - (2) 99
Hedging gains & losses reclassified as inventory - - - 3 - - - 3
Hedging gains & losses reclassified as finance costs - - - 0 - - - 0
Balance at 28 September 2024 100 2,484 151 (29) 10 (1,979) 5 742
The accompanying
accounting policies and notes form an integral part of these consolidated
financial statements.
Condensed Consolidated Statement of Cash Flows
26 weeks 53 weeks
ended
26 weeks ended
28 September
ended
2024
30 March
23 September
2024
2023
Note £'m £'m £'m
Cash flows from operating activities
Cash generated from operations 8 303 352 862
Income tax paid (61) (58) (116)
Net cash flows from operating activities 242 294 746
Cash flows from investing activities
Purchase of property, plant and equipment (74) (43) (123)
Purchase of intangible assets (1) (6) (3)
Proceeds from the sale of property, plant and equipment 16 1 2
Finance income received 2 1 5
Dividend income from associates - - 1
Net cash flows from investing activities (57) (47) (118)
Cash flows from financing activities
Net receipt of Group revolving credit facilities 7 45 40 25
Repayment of old bank loan facilities 7 - (300) (300)
Receipt of new bank loan facilities 7 - 225 225
Repayment of corporate bonds 7 - - (239)
Receipt due to newly issued corporate bonds 7 - - 250
Net receipt/(repayment) of French facilities 7 9 (2) 3
Repayment of the principal in relation to right-of-use assets (72) (71) (171)
Payment of interest in relation to right-of-use assets (38) (32) (69)
Fees on refinancing 7 - (3) (15)
Other finance costs paid (28) (21) (41)
Dividends paid to owners of the parent (96) (96) (348)
Net cash flows from financing activities (180) (260) (680)
Effects of exchange rate changes on cash and cash equivalents (2) (0) (3)
Net increase/(decrease) in cash and cash equivalents 3 (13) (55)
Cash and cash equivalents at the beginning of the period 182 237 237
Cash and cash equivalents at the end of the period 185 224 182
Cash and cash equivalents comprise:
Cash at bank and in hand 185 224 182
Overdrafts - - -
185 224 182
The accompanying accounting policies and notes form an integral part of these
consolidated financial statements.
Notes to the financial information
1 General information and basis of preparation
The results for the first half of the financial year have not been audited and
are prepared on the basis of the accounting policies set out in the Group's
last set of consolidated accounts released by the ultimate controlling party,
B&M European Value Retail S.A. (the "company"), a company listed on the
London Stock Exchange and incorporated in Luxembourg.
The financial information has been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Conduct Authority (DTR) and with
International Accounting Standard (IAS) 34 'Interim Financial Reporting' as
endorsed by the European Union.
The Group's trade is general retail, with trading taking place in the UK and
France.
The principal accounting policies have remained unchanged from the prior
financial information for the Group for the period to 30 March 2024.
The financial statements for B&M European Value Retail S.A. for the 53
weeks to 30 March 2024 have been reported on by the Group auditor and filed
with the Luxembourg Registrar of Companies. The audit report was unqualified.
The consolidated interim financial statements are presented in pounds sterling
and all values are rounded to the nearest million (£'m), except when
otherwise indicated.
This consolidated financial information does not constitute statutory
financial statements.
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.
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 27 3
Deferred tax liability (44) (20)
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
This Group financial information consolidates the financial information 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 31
March 2024 to 28 September 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 arrangement with the other vote holders of the
investee
· Rights arising from other contractual arrangements
· 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 assessing the Group's going concern at the half year, scenarios in relation
to the Group's principal risks, as disclosed in the FY24 annual report, have
still been considered appropriate and relevant. The Directors have 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 forecast 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.
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.
Critical judgments and key sources of estimation uncertainty
There are no significant changes to the items listed in the 2024 Annual
Report.
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 €1.1778/£ during the
period, with the period end rate being €1.1994/£ (March 2024: €1.1587/£
and €1.1694; September 2023: €1.1566/£ and €1.1507/£ respectively).
26 week period to 28 September 2024 UK UK France Corporate
B&M Heron B&M Total
£'m £'m £'m £'m £'m
Revenue 2,121 276 247 - 2,644
EBITDA (note 3) 330 24 39 (24) 369
Depreciation and amortisation (102) (11) (21) - (134)
Profit/(loss) before interest and tax 228 13 18 (24) 235
Net finance expense (26) (1) (8) (31) (66)
Income tax (charge)/credit (53) (3) (3) 13 (46)
Segment profit/(loss) 149 9 7 (42) 123
Total assets 3,158 293 410 25 3,886
Total liabilities (1,673) (118) (306) (1,047) (3,144)
Capital expenditure* (62) (6) (7) - (75)
26 week period to 23 September 2023 UK UK France Corporate
B&M Heron B&M Total
£'m £'m £'m £'m £'m
Revenue 2,045 272 232 - 2,549
EBITDA (note 3) 324 26 39 10 399
Depreciation and amortisation (94) (11) (19) - (124)
Profit before interest and tax 230 15 20 10 275
Net finance expense (23) (1) (7) (22) (53)
Income tax (charge)/credit (53) (4) (3) 2 (58)
Segment profit/(loss) 154 10 10 (10) 164
Total assets 3,001 281 386 38 3,706
Total liabilities (1,543) (122) (287) (959) (2,911)
Capital expenditure* (37) (6) (6) - (49)
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)
* Capital expenditure includes both tangible and intangible capital
Revenue is disaggregated geographically as follows:
Period to 26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Revenue due to UK operations 2,397 2,317 4,970
Revenue due to French operations 247 232 514
Overall revenue 2,644 2,549 5,484
Non-current assets (excluding deferred tax) are disaggregated geographically
as follows:
As at 28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
UK operations 2,341 2,246 2,315
French operations 250 239 254
Luxembourg operations 5 8 5
Overall 2,596 2,493 2,574
The Group operates small wholesale operations, with the relevant
disaggregation of revenue as follows:
Period to 26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Revenue due to sales made in stores 2,630 2,534 5,454
Revenue due to wholesale activities 14 15 30
Overall revenue 2,644 2,549 5,484
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
non-IFRS measures and therefore we provide a reconciliation of these amounts
to the statement of comprehensive income below.
Period to 26 weeks ended 26 weeks ended 53 weeks ended
28 September 23 September 30 March
2024 2023 2024
£'m £'m £'m
Profit on ordinary activities before interest and tax 235 275 607
Add back depreciation and amortisation 134 124 258
EBITDA 369 399 865
Costs in relation to the acquisition of Wilko stores 2 - 9
Group Trading Director accrual 2 - -
Reverse the fair value and foreign exchange impact of derivatives yet to 19 (12) (2)
mature
Foreign exchange on intercompany balances (0) 0 0
Adjusted EBITDA 392 387 872
Depreciation and amortisation (134) (124) (258)
Adjusted operating profit 258 263 614
Interest costs related to lease liabilities (38) (32) (69)
Net other finance costs (28) (21) (44)
Adjusted profit before tax 192 210 501
Adjusted tax (54) (55) (132)
Adjusted profit for the period 138 155 369
Adjusted EBITDA (pre-IFRS 16), adjusted operating profit (pre-IFRS 16) and
adjusted profit (pre-IFRS 16) are calculated as follows. These are the
statements of adjusted profit that excludes the effects of IFRS 16.
Period to 26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
EBITDA (above) 369 399 865
Remove effects of IFRS 16 on EBITDA (118) (118) (243)
EBITDA (pre-IFRS 16) 251 281 622
Adjusting items (above) 23 (12) 7
Adjusted EBITDA (pre-IFRS 16) 274 269 629
Pre-IFRS 16 depreciation and amortisation (44) (40) (82)
Adjusted operating profit (pre-IFRS 16) 230 229 547
Net other finance costs (28) (21) (44)
Adjusted profit before tax (pre-IFRS 16) 202 208 503
Adjusted tax (54) (53) (133)
Adjusted profit for the period (pre-IFRS 16) 148 155 370
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 this half year in relation to the
acquisition of several Wilko store leases, and the Group Trading Director
accrual.
The Group Trading Director accrual represents the portion of the previously
announced retention agreement that relates to the period following the
commencement of the Group Trading Director succession plan and that is
required to be accounted for in the current reporting period. It is considered
by management to be an adjusting item as it is material and one-off in nature
and does not relate to the ongoing trade of the Group.
Adjusted tax represents the tax charge per the statement of comprehensive
income as adjusted only for the effects of the adjusting items detailed above.
Net other finance costs reconcile to finance costs in the statement of
comprehensive income as follows:
Period to 26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Other finance costs from the statement of comprehensive income (30) (22) (50)
Finance income from the statement of comprehensive income 2 1 10
Remove adjusted finance costs - - (4)
Net other finance costs (28) (21) (44)
In the prior year, on 23 November 2023, the Group refinanced part of its
previous £400m high yield bond notes (2020). £244m of these bonds were
redeemed at 98%, which resulted in a gain of £5m recognised as a financial
gain in the Consolidated statement of comprehensive income. The bonds which
were redeemed carried £1m in fees incurred on inception, which were yet to be
amortised. These were also released through other finance costs in the
Consolidated statement of comprehensive income.
The tables below give the reconciliation between the profit/(loss) before
interest and tax and adjusted EBITDA (pre-IFRS 16) by segment:
26-week period to 28 September 2024 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit/(loss) before interest and tax 228 13 18 (24) 235
Adjusting items (above) - - - 23 23
Adjusted operating profit/(loss) 228 13 18 (1) 258
Depreciation and amortisation (pre-IFRS 16) 33 6 5 - 44
Impact of IFRS 16 (21) (1) (6) - (28)
Adjusted EBITDA (pre-IFRS 16) 240 18 17 (1) 274
26-week period to 23 September 2023 UK UK France Corporate Total
B&M Heron B&M
£'m £'m £'m £'m £'m
Profit before interest and tax 230 15 20 10 275
Adjusting items (above) - - - (12) (12)
Adjusted operating profit/(loss) 230 15 20 (2) 263
Depreciation and amortisation (pre-IFRS 16) 29 6 5 - 40
Impact of IFRS 16 (24) (3) (7) - (34)
Adjusted EBITDA (pre-IFRS 16) 235 18 18 (2) 269
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 (pre-IFRS 16) 556 36 47 (10) 629
Post-tax free cash flow is reconciled to the Consolidated statement of cash
flows as follows:
Period ended 26 weeks ended 26 weeks ended 53 weeks ended
28 September 23 September 30 March
2024 2023 2024
£'m £'m £'m
Cash flows from operating activities 303 352 862
Income tax paid (61) (58) (116)
Purchase of property, plant and equipment (74) (43) (123)
Purchase of intangible assets (1) (6) (3)
Proceeds from sale of property, plant and equipment 16 1 2
Repayment of the principal in relation to lease liabilities (72) (71) (171)
Payment of interest in relation to right-of-use assets (38) (32) (69)
Post-tax free cash flow 73 143 382
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 Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit 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 earnings per share 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 earnings per share 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 which have a dilutive effect on all
periods presented. The increase in the number of shares used in the
calculation of the basic earnings per share is due to the exercise of some of
these options.
The following reflects the income and share data used in the earnings per
share computations:
Period to 28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Profit for the period attributable to owners of the parent 123 164 367
Adjusted profit for the period attributable to owners of the parent 138 155 369
Adjusted (pre-IFRS 16) profit for the period attributable to owners of the 148 155 370
parent
Thousands Thousands Thousands
Weighted average number of ordinary shares for basic earnings per share 1,002,956 1,002,004 1,002,392
Dilutive effect of employee share options 2,104 2,554 2,282
Weighted average number of ordinary shares adjusted for the effect of dilution 1,005,060 1,004,558 1,004,674
Pence Pence Pence
Basic earnings per share 12.3 16.4 36.6
Diluted earnings per share 12.3 16.3 36.5
Adjusted basic earnings per share 13.8 15.5 36.8
Adjusted diluted earnings per share 13.7 15.4 36.7
Adjusted (pre-IFRS 16) basic earnings per share 14.7 15.5 36.9
Adjusted (pre-IFRS 16) diluted earnings per share 14.7 15.4 36.8
5 Taxation
The continuing tax charge for the interim period has been calculated on the
basis of the corporation tax rate for the full year of 25% in the UK and
France, and then adjusted for allowances and non-deductibles in line with the
prior periods (March 2024 and September 2023: same).
6 Share capital
Nominal value Number of shares
Allotted, called up and fully paid £'m
B&M European Value Retail S.A. Ordinary shares of 10p each;
At 25 March 2023 100 1,001,853,735
Shares issued due to exercise of employee share options 0 901,904
At 23 September 2023 100 1,002,755,639
Shares issued due to exercise of employee share options 0 35,257
At 30 March 2024 100 1,002,790,896
Shares issued due to exercise of employee share options 0 993,033
At 28 September 2024 100 1,003,783,929
Ordinary Shares
Each ordinary share ranks pari passu with each other ordinary share and each
share carries one vote.
In addition to the issued share capital, the company has an authorised but
unissued share capital of 2,968,438,293 ordinary shares.
The outstanding share options can be summarised as follows:
28 September 2024 23 September 2023 30 March
2024
Vested, available to exercise 5,569 - -
Not vested, not subject to conditions (in holding) 1,457,454 1,610,253 1,651,021
Not vested, subject to conditions 3,197,435 2,487,416 2,576,597
Total outstanding share options 4,660,458 4,097,669 4,227,618
For the dilutive effect of these see note 4.
7 Financial liabilities - borrowings
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Current
High yield bond notes 155 - -
Revolving facility bank loan 70 40 25
B&M France loan facilities 11 3 4
236 43 29
Non-current
High yield bond notes 495 647 650
Term facility bank loan 222 220 221
B&M France loan facilities 11 6 10
728 873 881
Bond refinancing
In the prior period, 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 financial income in the
Consolidated statement of comprehensive income. 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 were 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 were released through other finance
costs on the Consolidated statement of comprehensive income in the prior
period.
Extension of senior loan facilities
In the prior year, in March 2024, the Group and the banking syndicate
confirmed the activation of the first of two available 1-year extensions on
its senior loan facilities. As such, the facilities now have a maturity date
of March 2029.
Loan details
The French loan facilities are held in Euros. All other borrowings are held in
sterling.
The term facility bank loan and high yield bonds have a book value lower than
the cash amount that is outstanding due to the allocation of fees to these
facilities on their inception.
The current applicable interest rates, gross cash debt and maturities on the
Group's loans are as follows:
Interest rate Maturity 28 September 23 September 30 March
2024 2023 2024
% £'m £'m £'m
Revolving credit facility 1.75% + SONIA Oct-24 70 40 25
Term facility bank loan A 2.00% + SONIA Mar-29 225 225 225
High yield bond notes (2020) 3.625% Jul-25 156 400 156
High yield bond notes (2021) 4.000% Nov-28 250 250 250
High yield bond notes (2023) 8.125% Nov-30 250 - 250
B&M France - BNP Paribas 3.30 - 3.97% Feb 28 - Aug 29 9 3 5
B&M France - Caisse d'Épargne 0.75 - 4.97% Oct 24 - Nov 29 5 2 1
B&M France - CIC 0.71 - 0.75% Sep 24 - Jan 27 1 1 1
B&M France - Crédit Agricole 0.39 - 4.31% Oct 24 - Jan 28 3 1 1
B&M France - Crédit Lyonnais 0.68 - 3.65% Nov 24 - Mar 29 4 2 5
973 924 919
The revolving facility of £225m is committed until March 2029.
The term loan A 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 €1.1994/£ (September 2023:
€1.1507/£ and March 2024: €1.1694/£).
The Group measures net debt as the total of the gross cash borrowed less the
cash held on the statement of financial position:
28 September 2024 23 September 2023 30 March
2024
£'m £'m £'m
Interest bearing loans and borrowings 973 924 919
Less: Cash and short-term deposits - overdrafts (185) (224) (182)
Net debt 788 700 737
8 Reconciliation of profit before tax to cash generated from
operations
26 weeks ended 26 weeks ended 53 weeks ended
28 September 23 September 30 March
2024 2023 2024
£'m £'m £'m
Profit before tax 169 222 498
Adjustments for:
Net interest expense 66 53 109
Depreciation of property, plant and equipment 43 39 79
Depreciation of right-of-use assets 90 84 177
Impairment of right-of-use assets 0 0 5
Amortisation of intangible assets 1 1 2
Gain on sale and leaseback (1) - -
(Profit)/loss on disposal of property, plant and equipment (0) 0 1
Charge on share options 2 2 3
Change in inventories (234) (84) (14)
Change in trade and other receivables (9) (51) (23)
Change in trade and other payables 157 96 29
Change in provisions 0 2 1
Share of losses from associates - - 1
Loss/(gain) resulting from fair value of financial derivatives 19 (12) (6)
Cash generated from operations 303 352 862
9 Financial instruments
Fair value
The fair value of our corporate bonds, which are 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 28 September 2024 23 September 2023 30 March 28 September 2024 23 September 2023 30 March
£'m £'m 2024 £'m £'m 2024
£'m £'m
High yield bond notes (2020) 152 386 152 155 399 155
High yield bond notes (2021) 233 213 231 248 248 248
High yield bond notes (2023) 267 N/A 269 247 N/A 247
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 28 September 23 September 30 March
2024 2023 2024
Financial assets: £'m £'m £'m
Fair value through profit and loss
Forward foreign exchange contracts - 6 2
Fair value through other comprehensive income
Forward foreign exchange contracts - 6 3
Loans and receivables
Cash and cash equivalents 185 224 182
Trade receivables 12 11 12
Other receivables 21 27 22
As at 28 September 23 September 30 March
2024 2023 2024
Financial liabilities: £'m £'m £'m
Fair value through profit and loss
Forward foreign exchange contracts 21 1 4
Fair value through other comprehensive income
Forward foreign exchange contracts 28 2 6
Amortised cost
Lease liabilities 1,379 1,310 1,357
Interest-bearing loans and borrowings (excluding corporate bonds) 314 269 260
Trade payables 505 452 413
Other payables 19 21 21
Financial instruments at fair value through profit and loss
The financial assets and liabilities through profit or loss reflect the fair
value of those foreign exchange forward contracts that are intended to reduce
the level of risk for expected sales and purchases.
The forward foreign exchange contracts have been valued by the issuing bank,
using a mark to market method. The bank has used various inputs to compute the
valuations, and these include inter alia the relevant maturity date strike
rates and the current exchange rate.
10 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, 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,
bondholders and beneficial owners of equipment hired to the Group, are
directly or indirectly owned by Bobby Arora, a key member of the management
team, his family, or his family trusts (together, the Arora related parties).
In the prior 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.
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.
26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
£'m £'m 2024
£'m
Simon Arora (3.625%, 2025 bonds) - 35 -
SSA Investments (3.625%, 2025 Bonds) - 13 -
SSA Investments (4.000%, 2028 Bonds) 99 99 99
Rani 1 Investments (3.625%, 2025 Bonds) - 50 -
Rani 2 Investments (3.625%, 2025 Bonds) - 50 -
Total 99 247 99
The interest expense recorded on these bonds was £2m, with £1m accrued at
the period end (September 2023: £5m, £3m and March 2024: £8m, £2m
respectively).
The following tables set out the total amount of trading transactions with
related parties included in the statement of comprehensive income:
26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
£'m £'m 2024
£'m
Sales to associates of the Group
Centz Retail Holdings Limited 13 13 27
Total sales to related parties 13 13 27
26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
£'m £'m 2024
£'m
Purchases from associates of the Group
Multi-lines International Company Ltd 158.1 104.8 259.0
Purchases from parties related to key management personnel
Fulland Investments Limited 0.1 0.1 0.3
Golden Honest International Investments Limited 0.1 0.1 0.2
Hammond Investments Limited 0.1 0.1 0.3
Joint Sino Investments Limited 0.1 0.1 0.2
Ocean Sense Investments Limited 0.1 0.1 0.2
Total purchases from related parties 158.6 105.3 260.2
The IFRS 16 Lease figures in relation to the following related parties, which
are all related to key management personnel, are as follows:
Depreciation Interest Total Right-of-use Lease Net
charge charge charge asset liability liability
£'m £'m £'m £'m £'m £'m
Period ended 28 September 2024
Rani Investments 0 0 0 0 (1) (1)
Ropley Properties 1 0 1 7 (10) (3)
TJL UK Limited 1 0 1 9 (11) (2)
Triple Jersey Limited 4 2 6 58 (70) (12)
6 2 8 74 (92) (18)
Period ended 23 September 2023
Rani Investments 0 0 0 1 (1) (0)
Ropley Properties 1 0 1 7 (10) (3)
TJL UK Limited 1 0 1 10 (12) (2)
Triple Jersey Limited 4 2 6 55 (67) (12)
6 2 8 73 (90) (17)
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)
12 4 16 70 (86) (16)
The following tables set out the total amount of trading balances with related
parties outstanding at the period end.
Trade receivables 28 September 23 September 30 March
2024 2023 2024
£'m £'m £'m
With associates of the Group:
Centz Retail Holdings Limited 2 4 2
Total related party trade receivables 2 4 2
Trade payables 28 September 2024 23 September 2023 30 March
£'m £'m 2024
£'m
With associates of the Group:
Multi-lines International Company Ltd 56 19 32
With parties related to key management personnel:
Rani Investments 0 0 -
Ropley Properties Ltd 1 1 0
TJL UK Limited 0 0 1
Triple Jersey Ltd 2 3 0
Total related party trade payables 59 23 33
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
(September 2023: $18m; March 2024: $18m) held within a supply chain facility.
The facility is operated by major banking partners with high credit ratings
and is limited to $50m total exposure at any one time.
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.
There would be no impact on the Group if the facility became unavailable and
there are no fees or charges payable by the Group in regards to this
arrangement.
As these invoices continue to be part of the normal operating cycle of the
Group, the scheme does not change the recognition of the invoices subject to
the scheme, 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.
The business has not recorded any impairment of trade receivables relating to
amounts owed by related parties in any of the presented periods. This
assessment is undertaken through examining the financial position of the
related party and the market in which the related party operates.
The future lease commitments on the related party properties are:
26 weeks ended 26 weeks ended 53 weeks ended
28 September 2024 23 September 2023 30 March
£'m £'m 2024
£'m
Not later than one year 18 16 16
Later than one year and not later than two years 16 15 15
Later than two years and not later than five years 43 41 39
Later than five years 32 36 33
109 108 103
Further details regarding the Group's associates and transactions with key
management personnel are disclosed in the annual report.
11 Commitments
At the period end the Group were committed to future capital expenditure of
£27m, £20m of which relates to the development of the new imports centre in
the UK.
12 Post balance sheet events
An interim dividend of 5.3p per Ordinary Share will be paid on 13 December
2024.
13 Directors
The directors that served during the period were:
Tiffany Hall (Chair)
Alex Russo (CEO)
Mike Schmidt (CFO)
Paula MacKenzie
Oliver Tant
Hounaїda Lasry
Nadia Shouraboura (appointed 29 May 2024)
Peter Bamford (retired 23 July 2024)
Ron McMillan (retired 23 July 2024)
As previously announced, Nadia Shouraboura was appointed as a Non-Executive
Director, with effect from 29 May 2024.
On 5 June 2024, the Group announced the appointment of Tiffany Hall as the
successor to Peter Bamford in the role as Chair of the Board of Directors,
with effect from 23 July 2024. On the same date, Peter Bamford retired from
the Board of Directors after six very successful years in the role.
At the AGM, Ron McMillan also announced his retirement, with effect from 23
July 2024.
All directors served for the whole period except where indicated above.
DIRECTORS' RESPONSIBILITIES STATEMENT
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
EU;
· The Interim Management Report includes a fair review of the information
required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first 26 weeks of
the financial period and their impact on the condensed set of interim
financial statements; and a description of the principal risks and
uncertainties for the remaining 26 weeks of the reporting period; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first 26 weeks of the current
financial period and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board
Alex Russo
Chief Executive Officer
13 November 2024
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QKNBNKBDBPDDRecent news on B&M European Value Retail SA
See all newsREG - B&M European - Directorate Change
AnnouncementREG - B&M European - FY25 Post Close Trading Statement
AnnouncementREG - B&M European GIC Private Limited - TR1- Major Shareholding Notification
AnnouncementREG - B&M European - TR1- Major Shareholding Notification
AnnouncementREG - B&M European - Total Voting Rights
Announcement