REG - B&M European - FY26 H1 Trading and Operational Update
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RNS Number : 2798C B&M European Value Retail S.A. 07 October 2025
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 ("EU MAR") AND ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE
UNITED KINGDOM (THE "UK") BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 ("UK MAR").
7 October 2025
FY26 H1 Trading & Operational Update
Getting Back to B&M Basics
B&M European Value Retail S.A. ("the Group"), the UK's leading variety
goods discount retailer, today announces a Trading and Operational Update for
the first half of its current financial year ("FY26"), relating to the 26 week
period from 30 March 2025 to 27 September 2025.
Tjeerd Jegen, Chief Executive Officer, said:
"Since becoming CEO in June, I have led the business through a comprehensive
review of our customer proposition and operations. We have concluded that
while B&M's value proposition remains strong, our operational execution
has been weak. This has impacted our first-half trading performance, and this
is reflected in the full-year outlook that we publish today.
Our response is a decisive plan, 'Back to B&M Basics', focused on
returning the UK business to sustainable like-for-like growth. This is our
absolute priority. We have already sharpened our price position, and we are
moving with pace to refocus our ranges, improve on-shelf availability and
bring back excitement to our stores. We have more work to do, but we are
confident these changes will restore consistent like-for-like sales growth
over time."
Trading Summary
Fascia Revenues(1) Q1 FY26 Q2 FY26 H1 FY26
£m Y-o-Y % £m Y-o-Y % £m Y-o-Y %
B&M UK £1,131m +4.7% £1,065m +2.3% £2,196m +3.5%
B&M France £136m +7.6% £144m +19.4% £280m +13.4%
Heron Foods £138m -0.4% £135m -1.4% £273m -0.9%
Group revenue grew +4.0% in H1 FY26 to £2,749m, primarily driven by B&M
UK total value and volume sales growth, good trading momentum in B&M
France and the addition of 31 gross and 15 net new stores across our three
businesses (23 gross and 9 net in B&M UK, 5 gross and net in France, 3
gross and 1 net in Heron).
B&M UK LFL sales(2) grew by +0.1% in H1, with positive like-for-like
('LFL') volume and value growth in General Merchandise offset by a decline in
FMCG LFL sales. The timing of Easter and the early onset of good weather
pulled forward demand for our General Merchandise outdoor ranges in early H1,
driving double-digit LFL sales in April. Sales were weak in May as this trend
reversed, following which we saw a progressive moderation in LFL sales
declines in June and each period during Q2, helped by a return towards higher
average value products in General Merchandise and some average selling price
('ASP') inflation in FMCG. Despite this improving trajectory, B&M UK LFL
sales declined by -1.1% in Q2, which was weaker than our expectations.
Following the diagnosis of factors impacting our recent operational
performance, actions have been identified to improve execution and drive LFL
sales growth in B&M UK. These include:
· Adjusting prices on FMCG Key Value Items ('KVIs') to sharpen our customer
value proposition, where we were price competitive on a blended FMCG basket
basis, but needed greater consistency on our relative price position on a
number of individual lines. We have therefore cut prices on 35% of our KVIs,
lowering the average KVI line price by 1.8%. This move will help drive our
price perception with customers over time, and other pricing adjustments have
helped limit the impact on our margins.
· Rebooting our 'Managers Specials' promotions, which have become too static and
duplicative, to bring excitement and great value back to our front-of-store
bays. Store managers are now free to select the best lines within a broad
framework in response to local merchandising opportunities, starting with our
Back-to-School ranges in September and Halloween in September/October, both of
which have traded well to date.
· Refocusing our ranges to reduce line count and accelerate the clearance of
discontinued ranges, particularly in FMCG, home accessories and toys ranges,
following a material increase in SKUs in recent years that has introduced
complexity for our customers and our operations. The first category pilots
will be implemented at the end of October.
· Restoring product on-shelf availability, which is below industry FMCG
benchmarks, resulting in an estimated 86% FMCG best seller availability across
key stores versus best practice standards of 98%. We found that our emphasis
on store presentation prioritised the look of a full shelf over actual stock
availability of products customer want. Supported by better replenishment
processes and simpler ranges, our stores will now be focused on ensuring our
most popular products are always available to our customers, in order to drive
sales performance.
23 gross new stores were opened in B&M UK during H1 (9 net) as part of our
plans to deliver between 40-45 gross new stores during the financial year. We
are disciplined in renewing leases and acquiring new sites and the trading
performance of new stores has met our expectations.
B&M France has continued to trade well, delivering 5.2% LFL sales growth
during H1, demonstrating the effectiveness of the B&M value retail offer
in a competitive marketplace. 5 new stores were opened during H1 and we remain
optimistic on the long-term growth runway for France given the early-stage
rollout of the B&M brand there.
Heron Foods continued to trade profitability and opened 3 new stores during H1
(1 net). LFL sales remained pressured while work similar to B&M UK to
strengthen LFL revenue growth, organised through similar programmes to B&M
UK, has recently started.
The redomicile of B&M European Value Retail S.A. from Luxembourg to Jersey
is progressing to plan. The redomicile will simplify our administrative
processes and enable greater flexibility in returning capital to shareholders,
including through share buybacks, subject to shareholder approval. The process
is expected to complete in 2025.
Financial Performance & Outlook
As communicated in our Q1 Trading Update, the gross margin for B&M UK in
the first quarter was impacted by ASP deflation in General Merchandise and
lower bought-in product margins. The negative effect of this price deflation
moderated in the second quarter as we started to annualise these price changes
and as new autumn/winter ranges were introduced with higher bought-in margins.
Driven primarily by the LFL performance of B&M UK and lower trading gross
margins across the first half, and subject to any final consolidation or audit
review adjustments, the Company expects to report Group adjusted EBITDA
(pre-IFRS 16) of approximately £198m in H1 FY26 (H1 FY25: £274m). This
includes annual Extended Producer Responsibility tax costs of £14m (full
annual cost expensed in H1), adverse FX hedge rate non-cash movements of £3m
that will unwind in the second half, and higher wage costs due to the rise in
national minimum wage and employer National Insurance (an impact of c.£30m
before mitigation in H1).
Our September 2025 leverage ratio (defined as Net Debt divided by Group
adjusted EBITDA (pre-IFRS 16 basis)) will be slightly above our 1.0-1.5x
target range, reflecting lower earnings and seasonal working capital peaks
ahead of our Golden Quarter trading period.
We are taking decisive actions to correct the operational weaknesses
identified. While the full financial benefits will build over time, we have
seen gradually improving trends in UK like-for-like sales and gross margins
towards the end of the second quarter.
Taking recent trading into account, and our expectation of an improving LFL
trajectory from Q2 levels, Group adjusted EBITDA (pre-IFRS 16) is likely to be
in the range of £510m-£560m for FY26. Given the visibility available on
operating costs and trading margins, we expect B&M UK's LFL sales will be
the principal driver of the outcome within this range, for which we assume a
second-half UK LFL percentage growth rate of between low-single-digit negative
and low-single-digit positive levels.
The full impact of Back to B&M Basics actions will take 12-18 months to
take effect, but we are confident they will restore B&M's value
proposition and support a return to sustainable LFL sales growth for B&M
UK. With LFL growth, future adjusted EBITDA profit margins are expected to
stabilise at least at the FY26 outturn level.
Back to B&M Basics is part of a broader strategy to improve trading,
deepen B&M's foundations and accelerate growth. We look forward to sharing
more details in our Interim Results presentation on 13th November.
Notes:
1. References in this announcement to the B&M 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. One-year LFL revenues relate to the B&M UK estate only
(excluding wholesale revenues) and are based on 26 weeks vs. 26 weeks
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 FY25. This 14-month approach has been
adopted as it excludes the two-month halo period which new stores experience
following opening.
Investor Call & Webcast
B&M Retail will host an investor call and webcast at 09:00 AM (BST) today,
during which Chief Executive Officer, Tjeerd Jegen and Chief Financial
Officer, Mike Schmidt will discuss our H1 trading performance, FY26 outlook
and provide a detailed update on our Back to B&M Basics plan.
The registration link for the webcast is available here
(https://edge.media-server.com/mmc/p/bz2z22o3) . The slide pack for the
webcast will be made available here
(https://www.bandmretail.com/investors/reports-and-presentations#2025) .
Enquiries
B&M European Value Retail S.A.
For further information please contact: +44 (0) 151 728 5400 Ext 6363
Tjeerd Jegen, Chief Executive Officer
Mike Schmidt, Chief Financial Officer
Andrew Orchard, 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 786 stores in
the UK operating under the "B&M" brand, 344 stores under the "Heron Foods"
and "B&M Express" brands, and 140 stores in France also operating under
the "B&M" brand as at 27 September 2025.
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) .
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