B&M lifts guidance for profits and store openings

(Sharecast News) - UK and Europe-focused value retailer B&M has raised its guidance for profits and store openings after a strong first half, with double-digit growth in both revenues and earnings. The company, which operates as B&M and Heron Foods across over 1,100 stores in the UK and France, said revenues were up 10.4% on last year at £2.55bn in the six months to 23 September.

Adjusted EBITDA rose by 16.1% to £269m, as profit margins improved to 10.5% from 10%.

B&M UK revenues, which account for around 80% of group sales, were up 8.1%, with like-for-like sales rising 6.2%. Meanwhile B&M France sales surged 26.1% and Heron Foods operations jumped 17%.

However, the company said that current growth in the UK had softened slightly owing to strong comparatives from last year, with B&M UK LFL growth being just 1.6% in the first six weeks of the new quarter.

Nevertheless, full-year adjusted EBITDA is now expected to come in at £620m-630m, "materially higher" than last year's £573m. Previous guidance was simply for profits to be "higher".

The company opened 28 new stores in the quarter, comprising 13 in B&M UK, 10 in Heron Foods and 5 in B&M France.

B&M has now increased its long-term store target in the UK of 1,200, up from previous guidance of 950, after the "extremely positive" performance of new stores, which is said "provides us with confidence for our continued UK expansion". The company recently agreed to buy up 51 ex-Wilko stores after the competitor went bankrupt earlier in the year.

"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," said chief executive Alex Russo.