Discount retailer B&M European Value Retail has reported a 10.4% increase in revenue in the first half of its financial year, with adjusted EBITDA rising 11.4% at its core UK business.
Here's how leading industry analysts from GlobalData, Stifel, AJ Bell and Liberum viewed its performance.
Sophie Mitchell, GlobalData
“B&M’s success has undoubtedly been aided by its aggressive store roll out in recent years, opening 28 new stores in its H1 FY2023/24, which will not stop anytime soon. The group has revised its guidance on its store rollout, stating that it will reach no less than 1,200 B&M UK stores alone in the next few years, ahead of its previous guidance of 950 stores.
"The group also recognises the opportunity in France, with five of the 28 new stores opened there. With a similar demographic makeup and population size to the UK, France represents a chance for the retailer to replicate the size and success of its UK facia in the region.
"The acquisition of 51 former Wilko stores will also aid its UK store expansion, which it plans to open steadily over the next 12 months, contributing to a total opening of no less than 125 stores in the UK over the next three years, taking the B&M proposition to more consumers across the country. Although it is still unknown which ex-Wilko locations B&M acquired, Wilko store locations were generally very accessible, a factor that appealed to its consumers; thus, these stores are likely to be beneficial to B&M by adding to its town centre locations and gaining market share through ex-Wilko shoppers."
David Hughes, Stifel
"As we expected in our recent note, B&M has delivered on continued sales growth (+10% in 1H) but with a slowdown in LFL in 2Q following a very strong first quarter (1Q LFL 9.2%, 2Q LFL 3.1%).
"With this growth supported by consistent margins, B&M has delivered a solid first half and is guiding to FY24 pre-IFRS16 EBITDA of £620-£630m, c.1% above consensus."
Russ Mould, AJ Bell
“Despite upgraded guidance on earnings and store roll-out ambitions, discount retailer B&M was out of favour with the market on its latest update.
“A proposition of selling a range of discounted goods should chime with households which are looking to save money, so perhaps there was some disappointment at relatively sluggish like-for-like growth in the first six weeks of its ‘golden quarter’, even if the picture in the last three weeks has been more encouraging.
“An admission that volatile market conditions make forecasting tough may also have been in the minds of investors.”
Adam Tomlinson, Liberum
"Headline H1 numbers are in line. The slowdown in Q2 B&M UK LFLs, as expected, has been very well managed delivering a >100bps trading gross margin improvement and very strong group cash from operations of £352m. In France, further double-digit revenue growth (+26.1%) and underlying EBITDA progression should help to build the market’s confidence in the international opportunity.
"Strong current trading and good stock levels ahead of peak means full year (pre-IFRS 16) EBITDA guidance has been raised to £620m-630m (we were at £606m). Management has also raised its long-term UK B&M store target to at least 1,200 from 950 – a strong sign of confidence."
