TIDMBME
RNS Number : 3653Z
B&M European Value Retail S.A.
10 January 2020
10 January 2020
B&M European Value Retail S.A.
Q3 Trading Update
Continued growth in the quarter
B&M European Value Retail S.A. ("the Group"), the UK's
leading variety goods value retailer, today provides a trading
update for the third quarter of its current financial year,
relating to the 13 week period from 29 September 2019 to 28
December 2019.
Highlights
-- Group revenue growth in the quarter of +9.3% at constant currency
-- B&M UK stores revenue growth of +8.8% including
like-for-like ("LFL") growth of +0.3% for the quarter, against the
backdrop of a challenging broader retail market and our decision
not to engage in any early discounting activity
-- 15 gross new B&M UK stores opened in the quarter, 12 net of relocations
-- 6 planned gross new store openings at our B&M UK stores business for the final quarter
-- Heron Foods, our value convenience store chain, continues to
trade well building on a good performance in the prior year with
solid LFL sales growth and net 5 new stores opened in the
quarter
-- Progress continued to be made at Babou on the introduction of
directly sourced new product ranges. Babou generated revenues of
GBP85.0m in the quarter
-- Jawoll sales revenues were -1.5% on a constant currency basis
for the quarter. The strategic review announced on 12 November 2019
is ongoing
Simon Arora, Chief Executive, said,
"Against the backdrop of a difficult UK retail environment with
reduced shopper footfall and political uncertainty, our core
B&M UK business generated continued growth and delivered a
record level of peak season sales. Cumulatively, B&M UK has
achieved +2.3% LFL sales growth during the financial year to date,
albeit with a slower performance than anticipated during the run up
to Christmas.
Overall the business delivered a good quarter operationally.
Costs were well controlled and, combined with our usual strong
focus on cash gross margins, yielded a profitable outcome. We were
also able to exit the period with normal seasonal inventory levels.
Our new store programme delivered 15 gross and 12 net new B&M
UK stores in the quarter, and this year's openings as a whole have
performed better than expectations.
I would like to thank our teams across all our fascias for their
hard work in delivering the biggest ever Golden Quarter for the
B&M Group."
Revenue
Q3 Q3 YTD at Q3 YTD at Q3
period end period end
2019/20 2018/19 2019/20 2018/19
Total Group Revenues(2) GBP1,190.9m GBP1,092.5m GBP3,094.4m GBP2,658.3m
-------------- -------------- -------------- --------------
B&M(1 & 2) GBP957.4m GBP879.9m GBP2,413.8m GBP2,159.5m
-------------- -------------- -------------- --------------
Heron(1) GBP95.6m GBP89.9m GBP283.8m GBP265.0m
-------------- -------------- -------------- --------------
Jawoll GBP53.0m GBP55.3m GBP167.8m GBP166.5m
-------------- -------------- -------------- --------------
Babou(3) GBP85.0m GBP67.3m GBP229.0m GBP67.3m
-------------- -------------- -------------- --------------
Total Group Revenue
Growth (constant
currency)(4) +9.3% +12.1% +16.5% +14.4%
-------------- -------------- -------------- --------------
B&M UK Like-for-Like
Revenue Growth(5) +0.3% -1.6% +2.3% -0.7%
-------------- -------------- -------------- --------------
(1) References to the B&M business include the B&M
fascia stores in the UK except for the 'B&M Express' fascia
stores. References to the Heron Foods business include both the
Heron Foods fascia and B&M Express fascia convenience stores in
the UK.
(2) B&M revenues include GBP9.4m of wholesale revenues in
the quarter (2018: GBP5.4m) and GBP21.0m year to date (2018:
GBP8.3m).
(3) For the prior period in FY 2018/19, Babou was part of the
Group for only 10 weeks out of the whole 13 week period.
(4) Constant currency comparison involves restating the prior
year Euro revenues using the same exchange rate as used to
translate the current year Euro revenues.
(5) Like-for-like revenues relate to the B&M 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
the previous period. This 14 month approach has been taken as it
excludes the two month halo period which new stores experience
following opening.
Group sales revenue for the quarter increased by +9.3% on a
constant currency basis. On an actual currency basis, total sales
revenue increased by 9.0% to GBP1,190.9m (2018: GBP1,092.5m).
B&M UK stores business sales revenue in the 13 week period
increased by 8.8% to GBP957.4m (2018: GBP879.9m) with LFL sales of
+0.3%. Our LFL performance was held back by disappointing sales
across the Toys & Seasonal Confectionery categories, which was
offset by continued strength and outperformance across our Home
Departments. We refrained from participating in any early or
unusual discounting activity over the quarter and remained focused
on our cash margin. Inventory levels are also normal for the time
of year.
Heron Foods has continued to have a pleasing performance with
revenues growing by 6.2% to GBP95.6m (2018: GBP89.9m) in the
quarter. There were 5 net new stores opened in the quarter (taking
the total to 295 stores) and we are on track to open 20 gross new
stores in the full year.
Our French business, Babou, increased revenues by +29.3% on a
constant currency basis, of which 26.1% related to the
non-comparable period of ownership last year.
Jawoll's revenues were -1.5% at GBP53.0m (2018:GBP55.3m) on a
constant currency basis. We are continuing with the strategic
review process that was announced on 12 November 2019. Further
information in relation to the outcome of that process will be
given in due course.
Strategy
At the end of the quarter the B&M UK stores business had 657
trading stores, having opened 15 gross new stores (12 net of
relocations) in the quarter, and with Heron Foods now trading from
295 stores, having opened net 5 stores in the quarter.
In this financial year in the B&M UK business we expect to
have opened 51 gross new stores, being at least 41 net. We also
expect to have opened 20 Heron Foods net new stores in the
financial year. The pipeline of new stores of the Group for the
next financial year also looks healthy.
We are pleased by the initial training phase at our new 1
million sq feet Bedford DC facility, the fit-out of which was
largely completed in the quarter. Negotiations are ongoing in
relation to the proposed sale of the investment vehicle in which
this asset is held.
Outlook
We have seen a positive start to January trading but the outlook
for the rest of the quarter could, as always, be impacted by any
adverse weather conditions which may occur over the remainder of
the winter. We look forward to 2020 with confidence.
Conference Call
There will be a conference call for investors and analysts to
discuss the Trading Update on Friday 10 January 2020 at 8:30 am
(UK).
Dial-in details are:
UK & International: +44 (0) 3333 000 804
US: +1 631 913 1422
Participant Pin Code: 56494215#
Enquiries
B&M European Value Retail S.A.
For further information please contact +44 (0) 151 728 5400 ext
5766
Simon Arora, Chief Executive
Paul McDonald, Chief Financial Officer
Steve Webb, Investor Relations Director
Investor.relations@bandmretail.com
Media
For media please contact +44 (0) 207 379 5151
Maitland
Daniel Yea
bmstores-maitland@maitland.co.uk
Notes to editors
B&M European Value Retail S.A. is a variety retailer with
657 stores in the UK operating under the "B&M" brand and 295
stores under the "Heron Foods" brand, 96 stores in Germany
primarily operating under the "Jawoll" brand and 100 stores in
France operating under the "Babou" brand as at 31 December 2019. It
was admitted to the FTSE 250 index in June 2015.
The B&M Group was founded in 1978 and listed on the London
Stock Exchange in June 2014. For more information please visit
www.bmstores.co.uk
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END
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