4th Jun 2025 08:51
(Alliance News) - B&M European Value Retail SA on Wednesday reported sluggish full-year sales growth, and a fall in profit, held back by a "challenging" retail environment.
The Luxembourg-based retailer said pretax profit fell 13% to GBP431 million in the 52 weeks to March 29 from GBP498 million a year prior, hurt by higher interest and finance costs.
Comparative figures are for the 53 weeks to March 30, 2024.
B&M, which has 777 stores in the UK and 135 in France, as well as 343 Heron Foods and B&M Express shops, flagged heightened cautiousness to spend among consumers, and "very subdued" garden spending due to poor weather at the start of its financial year.
Revenue rose 1.6% to GBP5.57 billion from GBP5.48 billion, or by 3.7% on a comparable 52-week basis, primarily driven by the contribution from new stores and positive like-for-like performance in France. This helped offset a negative 3.1% LFL performance in the B&M UK business.
Adjusted earnings before interest, tax, depreciation and amortisation rose 0.2% to GBP620 million from GBP616 million on a 52-week comparable basis.
In April, B&M predicted adjusted Ebitda would be above the midpoint of its GBP605 million to GBP625 million guidance range.
In response, shares in B&M were 5.4% lower at 314.10 pence each in London on Wednesday morning.
B&M said UK trading conditions were "challenging" although the company acknowledged its operational execution could have been better.
Within B&M UK, performance in fast moving consumer goods categories did not meet internal expectations, but the performance in General Merchandise was more robust.
B&M France reported LFL sales growth of 2.6% with total revenue up 7.8%.
In the UK convenience sector, Heron Foods faced a "more challenging" year, with total revenue decreasing by 0.6% against tough prior year comparatives and a difficult market backdrop.
The dividend was increased by 2.0% to 15.0 pence per share from 14.7p, including a final payout of 9.7p.
Looking ahead, B&M said financial 2026 will bring "retail sector-wide challenges of increased minimum wage costs, higher employee national insurance and other taxes, and inflation on input costs."
But it said the impact of these additional costs and mitigations are reflected in the current range and median of analyst consensus operating profit forecasts for the financial year.
B&M noted that current analyst consensus for financial 2026, according to Bloomberg on June 2, is for adjusted Ebitda of GBP621 million, with a range of GBP569 million to GBP646 million, and for adjusted operating profit of GBP585 million, with a range of GBP524 million to GBP628 million.
In the financial year just ended, adjusted operating profit was GBP591 million down 1.8% from GBP602 million.
B&M said it is "well-positioned for the future", backed by a "robust" business model.
"Continued store expansion in the UK and France, supported by investments in distribution infrastructure, provides a clear path for growth," it said.
A further 45 UK stores are planned in the financial year as progressing towards its target of at least 1,200 B&M UK stores.
There was no update on trading in the current financial year.
By Jeremy Cutler, Alliance News reporter
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