TIDMBME
RNS Number : 6777M
B&M European Value Retail S.A.
10 January 2019
10 January 2019
B&M European Value Retail S.A.
Trading Update
Continued growth and solid trading across the peak period
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 30 September 2018 to 29
December 2018(1).
Highlights
-- Group sales revenue growth in the quarter of 12.1% at
constant currency; B&M UK like-for-like ("LFL") revenues for
the quarter -1.6% against a strong prior year comparable of
+3.9%
-- Pleasing finish to the quarter with December B&M UK +1.2%
LFL Sales and +3.2% LFL Cash Gross Margin, after a difficult
November
-- Strong inventory control delivered an estimated +30bps
expansion in Gross Margin percentage over the quarter
-- Positive sales momentum has continued into January
-- 13 B&M planned gross new store openings for the final quarter
Revenue Summary
Q3 Q3 YTD at Q3 YTD at Q3
period end period end
2018/19 2017/18 2018/19 2017/18
Total Group Revenues GBP1,087.1m GBP969.8m GBP2,650.1m GBP2,316.2m
-------------- ------------ -------------- --------------
B&M(2) GBP874.5m GBP837.3m GBP2,151.2m GBP2,029.3m
-------------- ------------ -------------- --------------
Heron(2) GBP89.9m GBP79.8m GBP265.0m GBP127.4m
-------------- ------------ -------------- --------------
Jawoll GBP55.3m GBP52.7m GBP166.5m GBP159.5m
-------------- ------------ -------------- --------------
Babou GBP67.3m - GBP67.3m -
-------------- ------------ -------------- --------------
Total Group Revenue
Growth (constant
currency)(3) +12.1% +22.7% +14.4% +21.7%
-------------- ------------ -------------- --------------
B&M UK Like-for-Like
Revenue Growth(4) -1.6% +3.9% -0.7% +6.0%
-------------- ------------ -------------- --------------
Commentary
Group
Group sales revenue for the quarter increased by 12.1% on a
constant currency basis. On an actual currency basis, total sales
revenue increased also by 12.1% (2017: 22.9%) to GBP1,087.1m (2017:
GBP969.8m).
B&M(2)
B&M UK sales revenue in the 13 week period increased by 4.5%
to GBP874.5m (2017: GBP837.3m) with LFL sales -1.6%, against a
strong comparative of +3.9% last year.
As can be clearly seen below, LFL Cash Gross Margin(5) was held
back by a disappointing November, but ended with a strong finish in
December at +3.2% and +GBP3.2m.
Click or paste the following link into your web browser to view
the graph entitled 'Q3 B&M LFL Cash Gross Margin' and refer to
page 3 for the graph.
http://www.rns-pdf.londonstockexchange.com/rns/6777M_1-2019-1-9.pdf
December's positive trading momentum has continued into early
trading in January. Careful control of inventory has meant that
stocks for the January 2019 end of season sale period are below the
levels of last year, which should provide further support to the
margin over Q4.
We opened a net 20 new stores in the quarter and we continue to
see attractive returns from the new store opening programme. We are
on track to open 56 gross new stores in FY19.
Heron Foods(2)
Heron Foods has continued to trade strongly with overall
revenues growing by 12.6% to GBP89.9m (2017: GBP79.8m) in the
quarter, which was a good performance given the business was
annualising the product range extensions that were made last year
following its acquisition. There were 9 net new stores opened in
the quarter (taking the total to 278 stores) and we are on track to
open 20 net new stores in the full year.
Jawoll
Jawoll's sales revenue increased by +5.5% on a Euro basis in the
quarter, which equates to an increase of 4.9% in Sterling to
GBP55.3m in the quarter compared with the same period in the
financial year 2017/18.
The Jawoll business LFL performance in the quarter was broadly
in line with its half year performance. Those product categories
that have benefited from the B&M Far East supply chain
performed strongly. The Toy and Electricals product categories in
particular achieved double digit percentage positive LFL revenue
growth, as new products were well received by Jawoll customers.
These are encouraging early signs that the improvements to the
product range are resonating with shoppers. The strong performance
in those categories was offset by reduced sales in the Clothing
product category, on which Jawoll has been reducing its reliance.
Jawoll continued with its planned price reductions across
slow-selling, discontinued ranges in the quarter. This will
continue into the final quarter, before we expect to see some
improvement in gross margin performance.
There were 3 new stores opened in the quarter and we are on
track to open 10 gross new stores in FY19.
Babou
The Babou stores business which we acquired in October 2018
contributed GBP67.3m of revenues in the quarter, with clearance
activities on existing merchandise commencing as we transition the
product range ahead of new B&M sourced product ranges arriving
in stores from March 2019 onwards.
Outlook
Our January period has started well and we are well positioned
for the remainder of the financial year. Our pipeline of new stores
is healthy and we remain on track to deliver continued sales and
earnings growth this financial year and the next.
Simon Arora, Chief Executive, said,
"Despite the broader economic uncertainty over the last quarter,
B&M is on track to deliver a record year for both sales and
earnings, representing our fourteenth consecutive year of profit
growth.
The business' ability to manage profitability through uncertain
trading conditions is testament to the resilience of the business
model and the strong operational controls we have in place. We
continue to open new stores and win market share when other
retailers are retrenching.
I would like to thank all our colleagues across our UK, German
and French businesses for their hard work and commitment over our
busiest ever peak Christmas period. I am pleased by the December
trading and the positive momentum with which we enter 2019. We look
forward to the year ahead with confidence as our value proposition
is clearly resonating with shoppers."
(1) The 13 week period for Jawoll ended 31 December 2018 and the
period for Babou was from 11 October to 31 December 2018.
(2) 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.
(3) Constant currency comparison involves restating the prior
year Euro revenues using the same exchange rate as used to
translate the current year Euro revenues.
(4) Like-for-like revenues relate to the B&M estate only 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.
(5) Like-for-like cash gross margin in the graph relates to the
B&M estate only and is calculated on the same basis as
like-for-like revenues, but represents the estimated gross margin
achieved on revenues excluding shrinkage and supplier discounts
(the latter are not materially different on a year on year
basis).
Conference Call
A conference call to discuss the Trading Update will be held on
Thursday 10 January 2019 at 8:30 am (UK).
Dial-in details are:
UK & International: +44 3333 000 804
US: +1 631 913 1422
Participant Pin Code: 30921329#
Replay facility available for 7 days
Replay dial-in number: +44 (0)33 3300 0819
Access Pin: 301274923#
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
611 stores in the UK operating under the "B&M" brand and 278
stores under the "Heron Foods" brand, 91 stores in Germany
primarily operating under the "Jawoll" brand and 95 stores in
France operating under the "Babou" brand as at 31 December 2018. 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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