TIDMBME
RNS Number : 8589S
B&M European Value Retail S.A.
09 November 2023
9 November 2023
B&M European Value Retail S.A.
FY24 Interim Results Announcement
Disciplined profitable growth momentum
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 23 September 2023.
Highlights
-- Group revenues increased by 10.4% on prior year to GBP2,549m
(+10.3% constant currency(1) )
-- Group adjusted EBITDA(4) (pre-IFRS 16) of GBP269m and margin
of 10.5% (H1 FY23: 10.0%) represents 16.1% growth vs. last
half year (H1 FY23: GBP232m)
-- Group adjusted operating profit(4) increased 19.1% to GBP263m
(H1 FY23: GBP221m), with statutory operating profit of
GBP275m (H1 FY23: GBP248m) and statutory profit before
tax of GBP222m (H1 FY23: GBP201m)
-- Group inventory in a clean exit position of GBP856m (H1
FY23: GBP837m)
-- Group cash generated from operations was GBP352m (H1 FY23:
GBP370m), reflecting a normalised working capital movement
with strong stock availability ahead of the Golden Quarter
across the three fascias
-- All fascias trading well with positive transaction numbers
and new space growth
-- Now expect to reach not less than 1,200 B&M UK stores in
total, vs. previous guidance of 950
-- Opened 28 gross new stores across the Group (13 in B&M
UK, 10 in Heron Foods and 5 in B&M France). Total average
selling area increase continues to outpace the increase
in number of stores
-- Net debt(7) to adjusted EBITDA(4) (pre-IFRS 16) leverage
ratio of 1.1x (H1 FY23: 1.3x)
-- An interim dividend(6) of 5.1p per Ordinary Share will
be paid on 15 December 2023 (H1 FY23: 5.0p)
-- FY24 Group adjusted EBITDA (pre-IFRS 16) guidance, increased
to be in the range of GBP620m - GBP630m, materially higher
than FY23 (GBP573m)
Revenue growth % Adjusted EBITDA(2,4)
(pre-IFRS 16) margin
Fascia perfomance %
H1 FY24 H1 FY23 H1 FY24 H1 FY23
------------ -------------- ----------- -------------
B&M UK (2) 8.1% (0.9)% 11.4% 10.6%
--------------------------- ------------ -------------- ----------- -------------
B&M UK LFL (3) 6.2% (3.9)% - -
--------------------------- ------------ -------------- ----------- -------------
B&M France 26.1% 18.2% 7.8% 9.6%
Heron Foods 17.0% 14.6% 6.6% 6.1%
------------ -------------- ----------- -------------
Alex Russo, Chief Executive, said:
"Another strong half year has seen the Group deliver 10.4% total
sales growth, 16.1% adjusted EBITDA(4) (pre-IFRS 16) growth and
GBP352m cash generated from operations. All four of our channels of
growth are delivering strong results, underpinned by our relentless
focus on low prices, cost control, simplicity in everything we do
and disciplined profitable growth. Highlights for the half
include:
-- Existing B&M UK stores saw like-for-like(3) sales
increase by 6.2%, with around half coming from increased customer
transaction numbers and helped by the material step change in store
operational standards - a key focus for management
-- Opened 13 gross new B&M UK stores, a net increase of 5
stores, with total sales area outgrowing growth in store numbers.
We expect to open not less than 35 stores this financial period,
and not less than 45 stores in each of the next two years
-- France delivered total sales growth of over 26%, with LFL
sales growth in double figures. France remains on track for 10 new
stores across this financial year, and at least the same number
next year
-- Heron Foods total sales were up 17.0% including 9 net new
stores. We remain on track to open 20 new stores in this financial
year
The agreement to acquire up to 51 ex-Wilko stores is a
significant step which underpins our opening programme. Over the
next three years we expect to open not less than 125 new B&M
stores in the UK, adding up to 20% to our sales area.
I am delighted that many of our existing shareholders have been
with us since our IPO and continue to see our long-term growth
potential. With our new store number guidance (of not less than
1,200 B&M UK stores) and continued LFL growth, we have the
runway to at least double our size in the UK in the medium term,
while France also offers sizeable long-term potential."
Current trading and outlook
In the first six weeks of the Golden Quarter, B&M UK LFL(3)
growth has been 1.6%. Momentum has been particularly strong in the
last three weeks, with LFL(3) exit growth of 4.5%. The Group is
trading against tough comparatives making this a pleasing result
against an uncertain and ever-changing economic background.
This volatile background makes forecasting for the full year
difficult. However, given the strong first half results and
positive momentum, the Group's FY24 adjusted EBITDA (pre-IFRS 16)
guidance is increased to a range of GBP620m - GBP630m, materially
higher than FY23 performance (GBP573m).
Financial results (unaudited)
H1 FY24 H1 FY23 Change
Total Group revenue GBP2,549m GBP2,309m 10.4%
---------- ---------- -------
Group adjusted EBITDA(2,4) (pre-IFRS
16) GBP269m GBP232m 16.1%
---------- ---------- -------
Group adjusted EBITDA(4) (pre-IFRS
16) margin % 10.5% 10.0% 52 bps
---------- ---------- -------
Group adjusted operating profit(2,4) GBP263m GBP221m 19.1%
---------- ---------- -------
Group statutory operating profit GBP275m GBP248m 11.0%
---------- ---------- -------
Group statutory operating profit
margin % 10.8% 10.7% 6 bps
---------- ---------- -------
Group cash generated from operations GBP352m GBP370m (4.7)%
---------- ---------- -------
Group statutory profit before
tax GBP222m GBP201m 10.5%
---------- ---------- -------
Adjusted (pre-IFRS 16) diluted
EPS(4) 15.5p 14.4p 7.6%
---------- ---------- -------
Statutory diluted EPS 16.3p 15.7p 4.2%
---------- ---------- -------
Ordinary dividends(6) 5.1p 5.0p 2.0%
---------- ---------- -------
Notes:
1. 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.
2. 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. When reporting
adjusted EBITDA (pre-IFRS 16) and adjusted operating profit,
B&M UK also includes the corporate segment as referred to in
note 2 of the financial information, and includes an adjusted loss
of GBP2m in this period (H1 FY23: adjusted loss of <GBP1m).
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 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 2, 3 and 4 of the
financial information for further details.
5. Trading gross margin is considered to be a meaningful measure
of profitability as it refers to the measure of gross margin used
by management to commercially run the business. It differs to the
statutory definition for B&M UK, which increased 233 bps from
34.5% to 36.8%, due to technical accounting adjustments in relation
to the allocation of gains and losses from derivative foreign
exchange accounting, commercial income and storage costs, with the
derivative adjustments the main factor.
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 GBP700m at
the half year end (H1 FY23: GBP736m), reflecting GBP924m (H1 FY23:
GBP959m) as the carrying value of gross debt netted against GBP224m
of cash (H1 FY23: GBP223m). See note 7 of the financial information
for more details.
8. UK market share is calculated based on the reported revenues
of B&M UK and Heron Foods, compared to NIQ Scantrack, Total
Store, Total Coverage inc. Discounters, 52 weeks ending
31.12.22.
Results Presentation
An in-person presentation for analysts in relation to these FY24
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
https://www.bandmretail.com/investors/presentations/year/2023
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
712 stores in the UK operating under the "B&M" brand, 328
stores under the "Heron Foods" and "B&M Express" brands, and
119 stores in France also operating under the "B&M" brand as at
23 September 2023. 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
Chief Executive's review
Another half of disciplined profitable growth
This has been another strong first half for the Group with
adjusted EBITDA (pre-IFRS 16) up 16.1%. Total sales were up 10.4%,
including 6.2% LFL(3) growth in our core B&M UK fascia. Our
Group adjusted EBITDA(4) (pre-IFRS 16) margin of 10.5% is 52 bps
ahead of the comparable period last year. Exceptionally strong
sales in the first quarter ensured that limited markdowns were
required in the second quarter leading to a strong gross margin for
the half. Strong first quarter growth moderated as expected in the
second quarter, hindered by unseasonal weather which was unhelpful
to the retail industry overall. Despite this backdrop, we delivered
profitable sales growth across the half. This was underpinned by a
step change in our store standards and by our pricing position. Our
laser focus on prices and store standards is core to our offer and
underpins future growth in existing and new stores.
In addition to the 13 gross new B&M stores opened in the
half, we also announced the agreement to acquire up to 51 ex-Wilko
stores which underpins our well-established store opening
programme. We confidently expect to open not less than 125 new
B&M UK stores over next three years. We will never over-extend
ourselves or compromise on the quality of our store locations in
pursuit of achieving a promised number of openings. We will not
neglect our core estate in pursuit of an excessive number of new
openings. Our growth will be disciplined and not at the expense of
excellence in standards.
Delivering compounding, profitable growth and strong cash
generation is our core investment objective. To deliver this we
must remain relevant to the consumer, be highly competitive through
price, store standards and the right product range. We are an Every
Day Low Price discounter and so we must also remain an Every Day
Low Cost operator. Once again, despite high cost and high labour
inflation we were able to deliver underlying cost ratios broadly in
line with sales.
Our strategy is intact and unchanged, and is underpinned by
several sustainable competitive advantages, which include:
-- Improving store standards. As many retailers look to cut
costs, with a resultant reduction in store standards, so we
continue to improve ours, without impacting our cost ratios. Over
the last 12-18 months, there has been a step change in store
standards and this has helped drive our LFL sales. This has put us
firmly on the virtuous circle of retailing, where improved sales
finances further improvements in the overall offer, leading to
further sales gains.
-- Low-cost structure leads to low prices. We are able to sell
cheaper than our rivals because we operate a low-cost structure and
are able to share the benefits with our customers through a laser
focus on price. As we continue to grow, so we will benefit from
further operational leverage through our central, logistics and
store fixed costs.
-- Strong supply chain and sourcing for non-grocery, built over
several decades with direct sourcing. This ensures we retain low
buying-in prices, have excellent availability and have rapid
replenishment from suppliers.
-- Strong and improving relationships with FMCG suppliers. We
only stock known brands and we remain a key growth channel for many
FMCG suppliers in the UK. With an edited range and growing sales,
our negotiating and buying position is strong and continues to
build, helping ensure our price competitive position is continually
strengthened.
Competitive position
The retail industry remains highly competitive and the consumer
remains under pressure. We are seeing many retailers struggle, fail
and close stores, but against a tough industry background we
continue to prosper and expand profitably. The consumer has seen
purchasing power cut over the last two years, with rising interest
rates reducing disposable and discretionary incomes. Through our
low prices, best in class availability and depth of range - we are
helping consumers through the ongoing cost-of-living crisis and in
doing so, are winning new customers and are building lasting
loyalty. In our grocery range we remain significantly cheaper than
the mainstream supermarkets. In non-grocery, compared to specialist
retailers, our price position is even stronger than it is in
grocery.
The move by consumers to discounters is a major trend in many
countries and is set to continue over the long term. In the UK and
France, we are at the forefront of this trend. In the UK, we have a
little over 2% market share(8) and much less in France, meaning
there are many more years of growth ahead. While market share gain
is not an objective in itself, it is a consequence of what we are
delivering to the consumer - a strong price-based offer, a relevant
product range and excellence in store standards.
Strategic progress review
Our strategy remains unchanged. The short-term outlook for the
consumer remains challenging but the long-term potential for growth
is highly attractive. We believe in the broadening appeal of our
offer, the continued move by consumers to discounting and greater
penetration of our offer withing existing catchment areas. Our
strategy continues to be relevant in both the short-term (cost of
living crisis) and the long-term (structural shift by consumers to
discounting). We believe our laser focus on price is a winner in
any market.
1. Existing B&M UK stores:
We continue to improve store standards and will always strive
for best-in-class product availability. This has been a key driver
in our strong LFL sales in the first half. LFL(3) growth of 6.2% is
the equivalent sales contribution of over 40 new stores, without
any incremental investment required. Focusing on our core estate is
highly profitable, it increases cash generation and improves return
on invested capital. We will not make the mistake of neglecting
existing stores in the pursuit of an excessive number of new
openings, nor will we compromise on the quality of our new
openings.
2. New B&M UK stores:
Our opening programme is building strongly and is well
underpinned. Over the next three years we plan to open not less
than 125 stores, supported by the agreement to acquire up to 51
ex-Wilko stores. These ex-Wilko stores will be converted steadily
over the next 12 months and in many instances will take the B&M
offer to more consumers in more parts of the country. In total, we
now expect to open 35 stores in the current financial year and not
less than 45 stores in each of the next two financial years.
We are increasing our long-term store target to not less than
1,200 stores, up from the 950 we announced in FY17, this underlines
the clear runway of growth ahead. Underpinning this guidance, we
have updated our previous analysis to take account of our
significant LFL sales growth and strong track record of
successfully opening stores in closer proximity to one another. The
performance of new stores has been extremely positive and provides
us with confidence for our continued UK expansion.
3. France:
The potential in France is substantial. In a country with a
population similar in size and demographics to the UK, we have just
119 stores. In H1 FY24, we have opened 5 stores, and these are all
performing strongly, helping further increase the profitability of
the business as it scales up. France is highly successful but there
remain more significant opportunities, such as increasing sales
densities by improving the offer (e.g. increasing the FMCG range)
and to expand the store network without adding to the current
infrastructure. There is also the added benefit of sharing
knowledge between our French operations and the UK business.
4. Heron Foods:
Our discount neighbourhood convenience store offer continues to
perform well during these challenging times for the consumer. We
see the great-value, highly-local Heron proposition resonating as
customers budget through the month by purchasing only what they
need, and only when they need it. Once again Heron has delivered
strong growth through new and existing stores, with an adjusted
EBITDA(4) (pre-IFRS 16) margin higher than most of its competitors.
We will continue to expand the business steadily with 20 new stores
this year, making this a complementary and cash generating fourth
channel of growth.
Management changes
At the full year we highlighted the strengthened management team
and we have added to that further with the appointment of Alex
Simpson, who joins us from Amazon UK, as Group General Counsel. The
fact that we are able to recruit from companies like Amazon and
Walmart amongst others, is a strong testament of how far B&M
has come and how large our opportunity remains.
I am also very pleased that Bobby Arora, Group Trading Director,
has committed his future to the Group as announced in July 2023.
Bobby is important in delivering the Group's long-term growth and
profitability. I look forward to building further on our
partnership as we continue to work together to deliver on our
objectives for shareholders.
Alex Russo
Chief Executive Officer
8 November 2023
Financial review
Group
GBP'm H1 FY24 H1 FY23 YoY Change
-------------------------------- -------- -------- -----------
Revenue 2,549 2,309 10.4%
Gross profit 941 808 16.4%
% 36.9% 35.0% 191 bps
Operating costs (672) (576) 16.6%
-------------------------------- -------- -------- -----------
Adjusted EBITDA(2,4) (pre-IFRS
16) 269 232 16.1%
% 10.5% 10.0% 52 bps
Depreciation and amortisation
(pre-IFRS 16) (40) (35) 13.1%
Operating impact of IFRS 16* 34 24 38.4%
-------------------------------- -------- -------- -----------
Adjusted operating profit(2,4) 263 221 19.1%
-------------------------------- -------- -------- -----------
Adjusting items(4) 12 27 (55.8)%
Statutory operating profit 275 248 11.0%
-------------------------------- -------- -------- -----------
Share of profit in associates - 1 (100.0)%
Finance costs relating to
right-of-use assets (32) (29) 9.6%
Other net finance costs (21) (19) 12.8%
Statutory profit before tax 222 201 10.5%
-------------------------------- -------- -------- -----------
*includes depreciation on right-of-use assets of GBP84m - H1
total depreciation & amortisation was GBP124m (H1 FY23:
GBP119m)
Group revenues for the 26 weeks ended 23 September 2023
increased by 10.4%, (10.3% on a constant currency basis(1) ), with
growth across all fascias. In B&M UK, our offer has resonated
with customers resulting in LFL growth but also we have seen new
stores perform well. Both B&M France and Heron Foods meanwhile
continue to drive sales densities with both reaching double digit
LFL growth.
Group gross profit increased by 16.4% YoY thanks to the strong
performance across the Group. The execution of the Garden &
Outdoor trading periods in B&M UK was critical to this
performance, with only limited markdowns being carried out in
General Merchandise categories.
Group adjusted EBITDA(4) (pre-IFRS 16) increased by 16.1% to
GBP269m (H1 FY23: GBP232m), representing a margin of 10.5% (H1
FY23: 10.0%). We saw inflationary pressure in our cost base,
particularly following minimum wage changes, but these were managed
effectively by each of the fascias.
Group adjusted operating profit(4) increased by 19.1% moving in
line with the above. Overall depreciation and amortisation grew by
5.1% due to the continued investment across the store estate, with
30 net more stores across the Group YoY.
B&M UK
In the B&M UK fascia(2) business, total revenues increased
by 8.1% to GBP2,045m (H1 FY23: GBP1,892m), with LFL(3) revenues up
6.2%. We started well in Q1, with LFL sales growth of 9.2%. LFL
growth slowed in Q2 to 3.1% following the strong start and hindered
by the unseasonal weather over the summer. Our LFL growth reflects
a strong increase in customer transaction numbers and an increased
basket value. Our balanced sales mix between FMCG and General
Merchandise remains intact and in line with our expectations.
B&M UK's statutory gross profit margin increased by 233 bps
to 36.8% from 34.5%, due to the sell-through driven by Q1 trading
resulting in limited markdown activity requirement in Q2. Trading
gross margin(5) was 36.1%, up 114 bps year on year from 34.9%, with
the growth in statutory gross margin mitigated chiefly by the
inclusion of foreign exchange impacts, principally in respect of
the prior period, which are recorded in statutory administration
costs.
There were 13 gross new stores openings in H1. Most of our store
openings for the financial period are H2 weighted and we remain on
track to open no fewer than 35 new stores in this financial
period.
In addition to revenue generated in-store, B&M UK revenues
also included GBP15m of wholesale revenues (H1 FY23: GBP17m), the
majority of which represented sales made to our associate Centz
Retail Holdings Limited, a chain of 53 variety goods stores in the
Republic of Ireland.
Adjusted EBITDA(4) (pre-IFRS 16) increased by 16.6% to GBP233m
(H1 FY23: GBP200m), with margin increasing by 83 bps to 11.4% (H1
FY23: 10.6%), from the gross profit margin expansion described
above, partially offset by foreign exchange losses related to stock
bought for future resale. Operating costs (excluding foreign
exchange) were well managed holding at 25.0% of revenues compared
to 25.5% in the prior year.
Statutory profit before interest and tax for the period was
GBP235m (H1 FY23: GBP221m).
B&M France
In France, revenues increased by 26.1% to GBP232m (H1 FY23:
GBP184m). This reflects the continual improvement of the range and
in particular the strengthening of the FMCG offer and also the
clear focus on store standards that resulted in an improvement in
sales densities.
The business is still on track to open 10 new stores by the end
of the financial period, with 5 opened in H1 FY24.
Adjusted EBITDA(4) (pre-IFRS 16) remained flat at GBP18m (H1
FY23: GBP18m) representing an adjusted EBITDA(4) margin of 7.8%
compared to 9.6% as reported in the prior year and an underlying
margin of 7.3% in that comparative period. This underlying
comparative excludes c.GBP5m of one-off government support received
at the start of the prior period.
Statutory profit before interest and tax for the period was
GBP25m (H1 FY23: GBP19m).
Heron Foods
Our discount convenience offering, Heron Foods, generated
revenues of GBP272m, up 17.0% (H1 FY23: GBP233m). Our LFL growth
reflects a pleasing increase in customer transaction numbers and an
increased basket value.
Heron opened 10 gross new stores in the period, on track for 20
at the end of the financial period.
Adjusted (pre-IFRS 16) EBITDA(4) increased by 26.7% to GBP18m
(H1 FY23: GBP14m) representing a sector-leading margin of 6.6% (H1
FY23: 6.1%).
Statutory profit before interest and tax for the period was
GBP15m (H1 FY23: GBP9m).
Cashflow, capital expenditure and leverage
Cash generated from operations was GBP352m (H1 FY23: GBP370m), a
decrease of 4.7% YoY reflecting a normalised first-half working
capital movement with inventory build-up ahead of our golden
quarter remaining tightly controlled. We will continue to maintain
our cash discipline in the second half, with working capital growth
expected to be less than revenue growth, subject to any payment
timing variances from the 53 week financial year.
Group net capital expenditure, excluding IFRS 16 right-of-use
asset additions, was GBP48m (H1 FY23: GBP45m). This included GBP18m
spent on 28 new stores opened in the first half across the Group
(H1 FY23: GBP16m on 21 stores), GBP13m on maintenance works (<1%
of H1 revenues) to ensure that our existing store estate and
warehouses are appropriately invested (H1 FY23: GBP22m), and a
total of GBP17m on infrastructure projects and opportunistic
freehold acquisitions, which includes the consideration with
respect of the Wilko transaction, to support the continued growth
of the business (H1 FY23: GBP7m).
The Group has operated with net debt in a range of 1.0x - 1.5x
since FY20. We remain comfortable with this range and believe it
balances cost of capital efficiency with maintaining our strategic
flexibility and level of resilience beneath our hard leverage
ceiling of 2.25x EBITDA. Where we have no superior alternative use
of our capital we will use special dividends to keep us operating
within this 1.0x - 1.5x leverage range. Net debt(7) to
last-twelve-months adjusted EBITDA(4) (pre-IFRS 16) is at 1.1x at
the end of H1 FY24 (H1 FY23: 1.3x), at the lower end of our target
range. We will review our capital allocation and special dividend
approach at the end of the key Golden Quarter trading period.
Dividend
An interim dividend of 5.1p(6) per Ordinary Share will be paid
on 15 December 2023 to shareholders on the register at 17 November
2023. The ex-dividend date will be 16 November 2023. 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 .
Future change of our key profit measure
The Group intends to use adjusted operating profit for future
guidance, rather than adjusted EBITDA (pre-IFRS 16). For the
current year, we will reference adjusted EBITDA (pre-IFRS 16),
given it is the metric used in prior guidance and is the basis of
targets in the current year's management incentive programme. For
at least the next financial year, we will continue to report EBITDA
(pre-IFRS 16) but will reduce its prominence.
Adjusted operating profit incorporates the effects of IFRS 16
and management believes it is a fair measure of underlying trading
performance in a period. Further commentary on adjusted items and
reconciliation to statutory figures can be found in notes 2 and 3
of the financial statements.
Fascia H1 FY24 H1 FY24
Adjusted EBITDA(2,4) Adjusted operating profit(2,4)
(pre-IFRS 16): :
Profit Margin % Profit Margin %
(GBPm) (GBPm)
---------- ----------- --------------- ----------------
B&M UK 233 11.4% 228 11.2%
B&M France 18 7.8% 20 8.7%
Heron Foods 18 6.6% 15 5.5%
Group 269 10.5% 263 10.3%
---------- ----------- --------------- ----------------
Principal risks and uncertainties
The principal risks and uncertainties faced by the Group remain
those as set out on page 26 to 33 of our Annual Report and
Financial Statement 2023: supply chain; competition; economic
environment; regulation and compliance; international expansion;
warehouse infrastructure; IT systems, cyber security and business
continuity; key management reliance; store expansion and stock
management.
Recognising the progress that the Group has made in increasing
the resilience of its distribution network and its controls over
stock, the Board currently expects in May 2024 to consolidate the
description of the 'warehouse infrastructure' and 'stock
management' risks into a broadened supply chain risk. The Board
separately continues to monitor the political environment and
increases in political intervention and regulation ahead of an
anticipated 2024 general election; the outcome of this general
election and the extent of any further political interventions
could also increase the risks facing the Group.
Mike Schmidt
Chief Financial Officer
8 November 2023
Condensed Consolidated Statement of Comprehensive Income
26 weeks 26 weeks 52 weeks
ended ended ended
23 September 24 September 25 March
2023 2022 2023
Note GBP'm GBP'm GBP'm
Revenue 2 2,549 2,309 4,983
Cost of sales (1,608) (1,501) (3,182)
Gross profit 941 808 1,801
Administrative expenses (666) (560) (1,265)
Operating profit 3 275 248 536
Share of profit/(loss) of investments in associates - 1 (1)
Profit on ordinary activities before interest and tax 275 249 535
Finance costs on lease liabilities (32) (29) (61)
Other finance costs (22) (19) (40)
Finance income 1 0 2
Profit on ordinary activities before tax 222 201 436
Income tax expense 5 (58) (44) (88)
Profit for the period 164 157 348
------------- -------------- ----------
Other comprehensive income for the period
Items that may be subsequently reclassified to profit or loss:
Exchange differences on retranslation of subsidiaries and associates (1) 6 5
Fair value movements recorded in the hedging reserve 1 85 28
Tax effect of other comprehensive income (2) (10) 5
------------- -------------- ----------
Total other comprehensive income (2) 81 38
------------- -------------- ----------
Total comprehensive income for the period 162 238 386
------------- -------------- ----------
Earnings per share
Basic earnings attributable to ordinary equity holders (pence) 4 16.4 15.7 34.8
Diluted earnings attributable to ordinary equity holders (pence) 4 16.3 15.7 34.7
All profit and other comprehensive income is attributable to the
owners of the parent.
The accompanying accounting policies and notes form an integral
part of these condensed consolidated financial statements.
Condensed Consolidated Statement of Financial Position
23 September 24 September 25 March
2023 2022 2023
Assets Note GBP'm GBP'm GBP'm
Non-current
Goodwill 921 922 921
Intangible assets 124 122 120
Property, plant and equipment 383 375 380
Right-of-use assets 1,052 1,052 1,056
Investments accounted for using
the equity method 8 9 8
Other receivables 5 6 6
Deferred tax asset 27 26 30
------------ ------------ ----------
2,520 2,512 2,521
------------ ------------ ----------
Current
Cash and cash equivalents 224 223 237
Inventories 856 837 764
Trade and other receivables 103 72 52
Other current financial assets 12 108 1
Income tax receivable 15 - 12
1,210 1,240 1,066
------------ ------------ ----------
Total assets 3,730 3,752 3,587
------------ ------------ ----------
Equity
Share capital 6 (100) (100) (100)
Share premium (2,480) (2,478) (2,478)
Retained earnings (171) (162) (104)
Hedging reserve (4) (58) 3
Legal reserve (10) (10) (10)
Merger reserve 1,979 1,979 1,979
Foreign exchange reserve (9) (11) (10)
(795) (840) (720)
------------ ------------ ----------
Non-current liabilities
Interest-bearing loans and borrowings 7 (873) (951) (873)
Lease liabilities (1,128) (1,139) (1,124)
Deferred tax liabilities (44) (39) (43)
Provisions (4) (5) (3)
----------
(2,049) (2,134) (2,043)
------------ ------------ ----------
Current liabilities
Interest-bearing loans and borrowings 7 (43) (1) (81)
Trade and other payables (644) (590) (541)
Lease liabilities (182) (172) (177)
Other financial liabilities (3) - (13)
Income tax payable (7) (7) (6)
Provisions (7) (8) (6)
------------ ------------ ----------
(886) (778) (824)
------------ ------------ ----------
Total liabilities (2,935) (2,912) (2,867)
------------ ------------ ----------
Total equity and liabilities (3,730) (3,752) (3,587)
------------ ------------ ----------
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 8 November
2023 and signed on their behalf by:
A. Russo, Chief Executive Officer.
Condensed Consolidated Statement of Changes in Shareholders'
Equity
Total
Foreign Share-
Share Retained Hedging Legal Merger exchange holders'
Share capital premium earnings reserve reserve reserve reserve equity
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Balance at 26 March 2022 100 2,476 121 13 10 (1,979) 5 746
------------- -------- --------- -------- -------- -------- --------- ---------
Ordinary dividend payments to
owners - - (115) - - - - (115)
Effect of share options 0 2 (1) - - - - 1
------------- -------- --------- -------- -------- -------- --------- ---------
Total for transactions with
owners 0 2 (116) - - - - (114)
------------- -------- --------- -------- -------- -------- --------- ---------
Profit for the period - - 157 - - - - 157
Other comprehensive income - - - 75 - - 6 81
------------- -------- --------- -------- -------- -------- --------- ---------
Total comprehensive income for
the period - - 157 75 - - 6 238
------------- -------- --------- -------- -------- -------- --------- ---------
Hedging gains & losses
reclassified as inventory - - - (30) - - - (30)
Balance at 24 September 2022 100 2,478 162 58 10 (1,979) 11 840
------------- -------- --------- -------- -------- -------- --------- ---------
Allocation to legal reserve - - (0) - 0 - - -
Declaration of interim
dividend - - (50) - - - - (50)
Special dividend payments to
owners - - (201) - - - - (201)
Effect of share options - - 2 - - - - 2
------------- -------- --------- -------- -------- -------- --------- ---------
Total for transactions with
owners - - (249) - - - - (249)
------------- -------- --------- -------- -------- -------- --------- ---------
Profit for the period - - 191 - - - - 191
Other comprehensive income - - - (42) - - (1) (43)
------------- -------- --------- -------- -------- -------- --------- ---------
Total comprehensive income for
the period - - 191 (42) - - (1) 148
------------- -------- --------- -------- -------- -------- --------- ---------
Hedging gains & losses
reclassified as inventory - - - (19) - - - (19)
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
------------- -------- --------- -------- -------- -------- --------- ---------
The accompanying accounting policies and notes form an integral
part of these consolidated financial statements.
Condensed Consolidated Statement of Cash Flows
26 weeks 26 weeks 52 weeks
ended ended ended 25
23 September 24 September March
2023 2022 2023
Note GBP'm GBP'm GBP'm
Cash flows from operating activities
Cash generated from operations 8 352 370 866
Income tax paid (58) (42) (84)
-------------- -------------- ---------
Net cash flows from operating activities 294 328 782
-------------- -------------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (43) (47) (93)
Purchase of intangible assets (6) (3) (5)
Proceeds from the sale of property, plant
and equipment 1 5 9
Finance income received 1 0 2
Net cash flows from investing activities (47) (45) (87)
-------------- -------------- ---------
Cash flows from financing activities
Receipt of Group revolving credit facilities 7 40 - -
Repayment of old bank loan facilities 7 (300) - -
Receipt of new bank loan facilities 7 225 - -
Net repayment of Heron bank facilities - (3) (3)
Net repayment of French bank facilities 7 (2) (2) 0
Fees on refinancing 7 (3) - -
Repayment of the principal in relation
to right-of-use assets (71) (69) (168)
Payment of interest in relation to right-of-use
assets (32) (29) (61)
Other finance costs paid (21) (17) (36)
Dividends paid to owners of the parent (96) (115) (366)
Net cash flows from financing activities (260) (235) (634)
-------------- -------------- ---------
Effects of exchange rate changes on cash
and cash equivalents (0) 2 3
Net (decrease)/increase in cash and cash
equivalents (13) 50 64
Cash and cash equivalents at the beginning
of the period 237 173 173
-------------- -------------- ---------
Cash and cash equivalents at the end of
the period 224 223 237
-------------- -------------- ---------
Cash and cash equivalents comprise:
Cash at bank and in hand 224 223 237
Overdrafts - - -
-------------- -------------- ---------
224 223 237
-------------- -------------- ---------
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 25
March 2023.
The financial statements for B&M European Value Retail S.A.
for the period to 25 March 2023 have been reported on by the Group
auditor and delivered to the Luxembourg Registrar of Companies. The
audit report was unqualified.
The consolidated financial statements are presented in pounds
sterling and all values are rounded to the nearest million (GBP'm),
except when otherwise indicated.
This consolidated financial information does not constitute
statutory financial statements.
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 26 March 2023 to 23
September 2023. 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.
After making enquiries, including preparing cash flow forecasts
for at least 12 months from the date of approval of these financial
statements, the Directors are confident that the Group has adequate
resources to continue its successful growth.
In the prior year, the Group fully re-financed its term loan and
RCF facilities, totalling GBP455m, for a new GBP225m term loan and
a GBP225m RCF maturing in March 2028, with two one-year extension
options. The Group also maintained its GBP400m bond maturing in
July 2025 and its GBP250m bond maturing in November 2028.
There have been no significant post balance sheet changes to
liquidity and the current inflationary pressures do not have a
material impact on this assessment as the Group is well placed to
absorb or pass on these costs given our position as a low-cost
retailer.
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.
Accordingly, the Directors continue to adopt the going concern
basis in preparing these financial statements.
Critical judgments and key sources of estimation uncertainty
There are no significant changes to the items listed in the 2023
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 EUR1.1566/GBP
during the period, with the period end rate being EUR1.1507/GBP
(March 2023: EUR1.1581/GBP and EUR1.1360; September 2022:
EUR1.1759/GBP and EUR1.1228/GBP respectively).
26 week period to UK UK France
23 September 2023 B&M Heron B&M Corporate Total
GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 2,045 272 232 - 2,549
EBITDA (note 3) 324 26 39 10 399
Depreciation and amortisation (94) (11) (19) - (124)
-------- ------- ------- ---------- --------
PBIT 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 62 3,730
Total liabilities (1,543) (122) (287) (983) (2,935)
Capital expenditure* (37) (6) (6) - (49)
26 week period to 24 UK UK France
September 2022 B&M Heron B&M Corporate Total
GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 1,892 233 184 - 2,309
EBITDA (note 3) 287 20 34 27 368
Depreciation and amortisation (91) (11) (17) - (119)
-------- ------- ------- ---------- --------
PBIT 196 9 17 27 249
Net finance expense (23) (1) (6) (18) (48)
Income tax charge (35) (2) (3) (4) (44)
-------- ------- ------- ---------- --------
Segment profit 138 6 8 5 157
Total assets 2,944 290 375 143 3,752
Total liabilities (1,500) (122) (281) (1,009) (2,912)
Capital expenditure* (41) (5) (4) - (50)
52 week period to UK UK France
25 March 2023 B&M Heron B&M Corporate Total
GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 4,067 485 431 - 4,983
EBITDA (note 3) 680 41 76 (20) 777
Depreciation and amortisation (182) (22) (38) - (242)
-------- ------- ------- ---------- --------
PBIT 498 19 38 (20) 535
Net finance expense (45) (3) (11) (40) (99)
Income tax (charge)/credit (87) (3) (6) 8 (88)
-------- ------- ------- ---------- --------
Segment profit/(loss) 366 13 21 (52) 348
Total assets 2,856 295 385 51 3,587
Total liabilities (1,443) (119) (277) (1,028) (2,867)
Capital expenditure* (77) (11) (10) - (98)
* Capital expenditure includes both tangible and intangible
capital
Adjusted operating profit by segment is equal to the profit on
ordinary activities before interest and tax (PBIT) figures given
above by segment, except with the adjusted corporate loss of GBP2m
(September 2022: <GBP1m, March 2023: GBP1m) included in the UK
B&M segment.
UK UK France
B&M Heron B&M Total
GBP'm GBP'm GBP'm GBP'm
26 week period to 23 September
2023 228 15 20 263
26 week period to 24 September
2022 195 9 17 221
52 week period to 25 March
2023 497 19 38 554
Revenue is disaggregated geographically as follows:
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
Period to 2023 2022 2023
GBP'm GBP'm GBP'm
Revenue due to UK operations 2,317 2,125 4,552
Revenue due to French operations 232 184 431
------------- -------------- --------------
Overall revenue 2,549 2,309 4,983
------------- -------------- --------------
Non-current assets (excluding deferred tax) are disaggregated
geographically as follows:
23 September 24 September 25 March
As at 2023 2022 2023
GBP'm GBP'm GBP'm
UK operations 2,246 2,237 2,240
French operations 239 240 243
Luxembourg operations 8 9 8
------------ ------------ --------
Overall 2,493 2,486 2,491
------------ ------------ --------
The Group operates small wholesale operations and previously
operated online in the FY23 financial year, with the relevant
disaggregation of revenue as follows:
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
Period to 2023 2022 2023
GBP'm GBP'm GBP'm
Revenue due to sales made in stores 2,534 2,289 4,940
Revenue due to wholesale activities 15 17 37
Revenue due to online activities - 3 6
------------- -------------- --------------
Overall revenue 2,549 2,309 4,983
------------- -------------- --------------
3 Reconciliation of non-IFRS measures from the statement of comprehensive income
The Group reports a selection of alternative performance
measures as detailed below. The Directors believe that these
measures provide additional information that is useful to the users
of the accounts.
EBITDA, adjusted EBITDA, adjusted operating profit and adjusted
profit are non-IFRS measures and therefore we provide a
reconciliation of these amounts to the statement of comprehensive
income below.
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
Period to 2023 2022 2023
GBP'm GBP'm GBP'm
Profit on ordinary activities before
interest and tax 275 249 535
Add back depreciation and amortisation 124 119 242
------------- -------------- --------------
EBITDA 399 368 777
Reverse the fair value impact of derivatives
yet to mature (12) (28) 17
Online project costs - - 2
Foreign exchange on intercompany balances 0 0 0
------------- -------------- --------------
Adjusted EBITDA 387 340 796
Depreciation and amortisation (124) (119) (242)
------------- -------------- --------------
Adjusted operating profit 263 221 554
Interest costs related to lease liabilities (32) (29) (61)
Net other finance costs (21) (19) (38)
--------------
Adjusted profit before tax 210 173 455
Adjusted tax (55) (35) (91)
------------- -------------- --------------
Adjusted profit for the period 155 138 364
------------- -------------- --------------
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.
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
Period to 2023 2022 2023
GBP'm GBP'm GBP'm
EBITDA (above) 399 368 777
Remove effects of IFRS 16 on EBITDA (118) (108) (223)
EBITDA (pre-IFRS 16) 281 260 554
Adjusting items (above) (12) (28) 19
------------- -------------- --------------
Adjusted EBITDA (pre-IFRS 16) 269 232 573
Pre-IFRS 16 depreciation and amortisation (40) (35) (76)
------------- -------------- --------------
Adjusted operating profit (pre-IFRS
16) 229 197 497
Net other finance costs (21) (19) (38)
------------- -------------- --------------
Adjusted profit before tax (pre-IFRS
16) 208 178 459
Adjusted tax (53) (34) (93)
------------- -------------- --------------
Adjusted profit for the period (pre-IFRS
16) 155 144 366
------------- -------------- --------------
Net finance costs reconcile to finance costs in the statement of
comprehensive income as follows:
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
Period to 2023 2022 2023
GBP'm GBP'm GBP'm
Other finance costs from the statement
of comprehensive income (22) (19) (40)
Finance income from the statement of
comprehensive income 1 0 2
Net other finance costs (21) (19) (38)
------------- -------------- --------------
The tables below give the breakdowns of EBITDA and EBITDA
(pre-IFRS 16) by segment:
26 week period to 23 September UK UK France
2023 B&M Heron B&M Total
GBP'm GBP'm GBP'm GBP'm
Adjusted EBITDA 322 26 39 387
Remove effects of IFRS 16
on EBITDA (89) (8) (21) (118)
------ ------- ------- --------
Adjusted EBITDA (pre-IFRS
16) 233 18 18 269
------ ------- ------- --------
26 week period to 24 September UK UK France
2022 B&M Heron B&M Total
GBP'm GBP'm GBP'm GBP'm
Adjusted EBITDA 285 20 35 340
Remove effects of IFRS 16
on EBITDA (85) (6) (17) (108)
------ ------- ------- --------
Adjusted EBITDA (pre-IFRS
16) 200 14 18 232
------ ------- ------- --------
52 week period to 25 March UK UK France
2023 B&M Heron B&M Total
GBP'm GBP'm GBP'm GBP'm
Adjusted EBITDA 679 42 75 796
Remove effects of IFRS 16
on EBITDA (177) (12) (34) (223)
------ ------- ------- --------
Adjusted EBITDA (pre-IFRS
16) 502 30 41 573
------ ------- ------- --------
Segmental adjusted EBITDA is the same as segmental EBITDA given
in note 2, except with the adjusted corporate loss of GBP2m
(September 2022: <GBP1m, March 2023: GBP1m) included in the
B&M segment.
Adjusting items are the effects of derivatives, one-off
refinancing fees, foreign exchange on the translation of
intercompany balances and the effects of revaluing or unwinding
balances related to the acquisition of subsidiaries.
Significant project costs or gains or losses arising from
unusual circumstances or transactions may also be included if
incurred, as they have been in the prior year, recognising the loss
incurred from the online trading trial which had ceased by the
previous year end date of 25 March 2023.
Adjusted tax represents the tax charge per the statement of
comprehensive income as adjusted only for the effects of the
adjusting items detailed above. All adjusting items are considered
to relate to the corporate segment.
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 23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Profit for the period attributable to owners
of the parent 164 157 348
Adjusted profit for the period attributable
to owners of the parent 155 138 364
Adjusted (pre-IFRS 16) profit for the period
attributable to owners of the parent 155 144 366
Thousands Thousands Thousands
Weighted average number of ordinary shares
for basic earnings per share 1,002,004 1,001,331 1,001,593
Dilutive effect of employee share options 2,554 1,986 1,730
---------- ---------- ----------
Weighted average number of ordinary shares
adjusted for the effect of dilution 1,004,558 1,003,317 1,003,323
---------- ---------- ----------
Pence Pence Pence
Basic earnings per share 16.4 15.7 34.8
Diluted earnings per share 16.3 15.7 34.7
Adjusted basic earnings per share 15.5 13.8 36.3
Adjusted diluted earnings per share 15.4 13.8 36.2
Adjusted (pre-IFRS 16) basic earnings per
share 15.5 14.4 36.5
Adjusted (pre-IFRS 16) diluted earnings per
share 15.4 14.4 36.5
------ ------ ------
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% (UK) and 25% (France) and then adjusted for allowances
and non-deductibles in line with the prior year ( March 2023 and
September 2022: 19% UK and 25% France).
6 Share capital
Nominal value Number of shares
Allotted, called up and fully paid GBP'm
B&M European Value Retail S.A. Ordinary
shares of 10p each;
At 26 March 2022 100 1,001,226,836
Shares issued due to exercise of employee
share options 0 626,899
------------- ----------------
At 24 September 2022 and 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
------------- ----------------
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 2,969,466,583 ordinary
shares.
The outstanding share options can be summarised as follows:
23 September 24 September 25 March
2023 2022 2023
Vested, available to exercise - - -
Not vested, not subject to conditions
(in holding) 1,610,253 1,487,106 1,644,749
Not vested, subject to conditions 2,487,416 1,767,452 2,499,574
------------ ------------ ---------
Total outstanding share options 4,097,669 3,254,558 4,144,323
------------ ------------ ---------
For the dilutive effect of these see note 4.
7 Financial liabilities - borrowings
23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Current
Revolving credit facility 40 - -
Term facility bank loan - - 78
France other loan facilities 3 1 3
43 1 81
------------ ------------ --------
Non-current
High yield bond notes 647 646 646
Term facility bank loan 220 297 219
France loan facilities 6 8 8
873 951 873
------------ ------------ --------
Extension of senior loan facilities
During the prior period, the Group completed an extension of its
term facility bank loan.
The previous GBP300m term facility was drawn down in July 2020
with GBP4m of fees capitalised into the balance at that time. The
agreement included a revolving facility of GBP155m and was due to
mature in April 2025.
This was extended with new facilities totalling GBP450m due to
mature in April 2028. These comprise a term loan of GBP225m and a
revolving facility of GBP225m and the agreement also includes the
availability of two 1-year extension terms, subject to mutual
consent with the banking syndicate.
An assessment was made by management with the conclusion that
the transaction represents an extension and not a significant
modification. More details of which are contained in our previous
Annual Report.
As such, the remaining GBP2m of unamortised capitalised fees
have remained on the balance sheet and will be amortised over the
extended term. There were GBP3m of fees associated with the
extension which have also been capitalised into the loan
balance.
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:
23 September 24 September 25 March
Interest rate Maturity 2023 2022 2023
% GBP'm GBP'm GBP'm
Revolving credit facility 1.75% + SONIA Oct-23 40 - -
Term facility bank
loan A 2.00% + SONIA N/A - - 75
Term facility bank
loan A 2.00% + SONIA Apr-28 225 300 225
High yield bond notes
(2020) 3.625% Jul-25 400 400 400
High yield bond notes
(2021) 4.00% Nov-28 250 250 250
Sep 24-Feb
B&M France - BNP Paribas 0.75-3.50% 28 3 1 3
B&M France - Caisse Aug 24-Nov
d'Épargne 0.75-2.60% 29 2 1 2
Sep 24-Jan
B&M France - CIC 0.71-0.75% 27 1 2 2
B&M France - Cr é Sep 25-Jan
dit Agricole 0.39-0.81% 28 1 1 1
B&M France - Crédit Nov 24-Mar
Lyonnais 0.68-0.74% 27 2 4 3
B&M France - Société
Générale 0.63% N/A - 0 0
924 959 961
------------ ------------ --------
The revolving facility of GBP225m is committed until April
2028.
The term loan A and the high yield bond notes have carrying
values which include transaction fees allocated on inception.
The Group measures net debt as the total of the gross cash
borrowed less the cash held on the statement of financial
position:
25 March
23 September 2023 24 September 2022 2023
GBP'm GBP'm GBP'm
Interest bearing loans and borrowings 924 959 961
Less: Cash and short-term deposits - overdrafts (224) (223) (237)
----------------- ----------------- --------
Net debt 700 736 724
----------------- ----------------- --------
8 Reconciliation of profit before tax to cash generated from operations
52 weeks ended
26 weeks ended 26 weeks ended 25 March
23 September 2023 24 September 2022 2023
GBP'm GBP'm GBP'm
Profit before tax 222 201 436
Adjustments for:
Net interest expense 53 48 99
Depreciation of property, plant and equipment 39 34 71
Depreciation of right-of-use assets 84 84 167
Impairment of right-of-use assets 0 0 2
Amortisation of intangible assets 1 1 4
Gain on sale and leaseback - (1) (1)
Loss/(gain) on disposal of property, plant and equipment 0 (0) (1)
Charge on share options 2 1 3
Change in inventories (84) 32 103
Change in trade and other receivables (51) (21) 1
Change in trade and other payables 96 21 (30)
Change in provisions 2 (1) (6)
Share of (profit)/loss from associates - (1) 1
(Gain)/loss resulting from fair value of financial derivatives (12) (28) 17
------------------ ------------------ --------------
Cash generated from operations 352 370 866
------------------ ------------------ --------------
9 Financial instruments
The fair value of the financial assets and liabilities of the
Group are not materially different from their carrying value. Refer
to the table below.
23 September 24 September 25 March
As at 2023 2022 2023
Financial assets: GBP'm GBP'm GBP'm
Fair value through profit and loss
Forward foreign exchange contracts 6 37 1
Fair value through other comprehensive income
Forward foreign exchange contracts 6 71 0
Loans and receivables
Cash and cash equivalents 224 223 237
Trade receivables 11 22 11
Other receivables 27 17 10
------------ ------------ --------
23 September 24 September 25 March
As at 2023 2022 2023
Financial liabilities GBP'm GBP'm GBP'm
Fair value through profit and loss
Forward foreign exchange contracts 1 - 8
Fair value through other comprehensive income
Forward foreign exchange contracts 2 - 5
Amortised cost
Lease liabilities 1,310 1,311 1,301
Interest-bearing loans and borrowings 916 952 954
Trade payables 452 415 382
Other payables 21 9 16
------------ ------------ --------
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 and fuel derivative 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.
The Group's financial instruments are either carried at fair
value or have a carrying value which is considered a reasonable
approximation of fair value.
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 the recently retired director
Simon Arora, his family, or his family trusts (together, the Arora
related parties).
There were significant related party transactions in the prior
period, with SSA Investments purchasing a total of GBP43m of our
4.00% corporate bonds and GBP13m of our 3.625% corporate bonds in
June 2022, and Simon Arora purchasing GBP35m of our 3.625%
corporate bonds over December 2022 and January 2023. Purchases have
been made in prior periods and the overall position is summarised
in the table below with all related party bondholders being Arora
related parties.
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Simon Arora (3.625%, 2025 bonds) 35 - 35
SSA Investments (3.625%, 2025
Bonds) 13 13 13
SSA Investments (4.000%, 2028
Bonds) 99 99 99
Rani 1 Investments (3.625%, 2025
Bonds) 50 50 50
Rani 2 Investments (3.625%, 2025
Bonds) 50 50 50
Total 247 212 247
------------- -------------- --------------
The interest expense recorded on these bonds was GBP5m, with
GBP3m accrued at the period end (September 22: GBP4m, GBP2m and
March 23: GBP8m, GBP3m 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 52 weeks ended
23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Sales to associates of the Group
Centz Retail Holdings Limited 13 16 34
Total sales to related parties 13 16 34
------------- -------------- --------------
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Purchases from associates of
the Group
Multi-lines International Company
Ltd 104.8 90.3 193.7
Purchases from parties related to key management
personnel
Fulland Investments Limited 0.1 0.2 0.2
Golden Honest International Investments
Limited 0.1 0.1 0.2
Hammond Investments Limited 0.1 0.1 0.2
Joint Sino Investments Limited 0.1 0.1 0.2
Ocean Sense Investments Limited 0.1 0.2 0.2
SSA Investments - 0.1 0.1
------------- -------------- --------------
Total purchases from related
parties 105.3 91.1 194.8
------------- -------------- --------------
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
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
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 24 September
2022
Rani Investments 0 0 0 1 (1) (0)
Ropley Properties 1 0 1 7 (11) (4)
TJL UK Limited 0 0 0 11 (13) (2)
Triple Jersey Limited 4 2 6 50 (63) (13)
------------ -------- ------- ------------ ---------- ----------
5 2 7 69 (88) (19)
------------ -------- ------- ------------ ---------- ----------
Period ended 25 March
2023
Rani Investments 0 0 0 1 (1) (0)
Ropley Properties 2 1 3 8 (11) (3)
TJL UK Limited 1 0 1 10 (12) (2)
Triple Jersey Limited 8 3 11 46 (57) (11)
------------ -------- ------- ------------ ---------- ----------
11 4 15 65 (81) (16)
------------ -------- ------- ------------ ---------- ----------
The following tables set out the total amount of trading
balances with related parties outstanding at the period end.
23 September 24 September 25 March
2023 2022 2023
Trade receivables GBP'm GBP'm GBP'm
With associates of the Group:
Centz Retail Holdings Limited 4 5 2
Multi-lines International Company -
Ltd 0 -
Total related party trade receivables 4 5 2
------------- ------------ --------
26 weeks
ended 26 weeks ended 52 weeks ended
23 September 24 September 25 March
2023 2022 2023
Trade payables GBP'm GBP'm GBP'm
With associates of the Group:
Multi-lines International Company
Ltd 19 22 7
With parties related to key management
personnel:
Rani Investments 0 - 0
Ropley Properties Ltd 1 0 1
TJL UK Limited 0 - 1
Triple Jersey Ltd 3 0 2
--------------
Total related party trade payables 23 22 11
------------- -------------- --------------
Outstanding trade balances at the balance sheet dates are
unsecured and interest free and settlement occurs in cash. There
have been no guarantees provided or received for any related party
trade receivables or payables.
The balance with Multi-lines International Company Ltd includes
$18m (September 2022: $16m; March 2023: $nil) 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 52 weeks ended
23 September 24 September 25 March
2023 2022 2023
GBP'm GBP'm GBP'm
Not later than one year 16 15 14
Later than one year and not later
than two years 15 14 13
Later than two years and not later
than five years 41 36 35
Later than five years 36 41 35
------------- -------------- --------------
108 106 97
------------- -------------- --------------
Further details regarding the Group's associates and
transactions with key management personnel are disclosed in the
annual report.
11 Commitments
There are no significant capital commitments as at the half year
end.
12 Post balance sheet events
An interim dividend of 5.1p per Ordinary Share will be paid on
15 December 2023.
13 Directors
The directors that served during the period were:
Peter Bamford (Chairman)
Alex Russo (CEO)
Mike Schmidt (CFO)
Ron McMillan
Tiffany Hall
Paula MacKenzie
Oliver Tant
Houna da Lasry (appointed 22 September 2023)
Simon Arora (until 21 April 2023)
Carolyn Bradley (until 25 July 2023)
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
8 November 2023
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END
IR NKFBKCBDDODK
(END) Dow Jones Newswires
November 09, 2023 02:00 ET (07:00 GMT)
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