EU CONSUMER STAPLES: B&M; 4Q (3m to March) trading update
(BMELN; Ba1 Stable/BB+ Neg) (equities +5.5%)
3m to march saw;
- UK LFL sales fall -2.4%. Net of store openings sales +5.4%
- general merch increased on volumes and values giving LFL growth. It was offset by FMCG falls. It
has said in the past it is ~half/half split between the two.
- general merch increased on volumes and values giving LFL growth. It was offset by FMCG falls. It
- France LFL sales +3.2% and net of store openings +9.1%
- France smaller ~10% of group sales
That left FY revenue at £5.6b (net +4%) with UK LFL -3.1% and France LFL +2.6%
- Margins - no values given but gross described as "robust in UK". UK operating costs increased +6% which will include impact of store openings
- FY25 pre-IFRS EBITDA expected to be above recently lowered guidance of £605-625m (i.e. implies £615-625m vs. £629m last year)
- Add back circa +£250m for lease expenses for statutory EBITDA
- After dividend payments, leverage expected to be mid-point of pre-IFRS net 1.0x-1.5x target
- vs. 1.2x last year is unch and in line with what we expected (eqv. n/g 2.8x/3.0x)
- Store opening guidance is unch for 45 in UK this year (same as last year).
- CEO search underway and expected to be announced in "coming weeks".
- More complete FY pre-lim results will come 4th June.
On RV; Burberry vs. B&M remains a tough call and today’s update doesn’t materially shift the needle. In a cyclical downturn, B&M 'should' be better positioned defensively. That said, if Burberry can replicate last quarter’s performance (earnings due 14 May), it will outperform.
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