Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • BME’s H1 FY26 adjusted EBITDA (pre-IFRS 16) expected at GBP 198m, FY26 projected GBP 510m–GBP 560m.
  • B&M UK like-for-like sales grew 0.1% in H1, while Q2 recorded a 1.1% decline.
  • Group revenue rose 4.0% to GBP 2,749m in H1 FY26, supported by 31 new store openings in H1 FY26.

B&M European Value Retail S.A. (LSE:BME) is a European variety discount retailer operating stores that offer a range of products at low prices. The company has released results for the 26-week period ended 27 Sep 2025. Group revenue increased 4.0% to GBP 2,749m, supported by B&M UK sales, trading in B&M France, and the opening of 31 gross new stores across the three businesses. B&M UK like-for-like (LFL) sales rose 0.1% in H1, driven by General Merchandise, while FMCG sales declined. Q2 LFL sales in the UK fell by 1.1%, with improvements noted later in the quarter due to higher average selling prices in FMCG and General Merchandise categories.

B&M France achieved 5.2% LFL growth during H1, with five new stores added. Heron Foods opened three stores (one net) while LFL sales declined slightly by 0.9%.

Operational Initiatives

The company has implemented a “Back to B&M Basics” plan in response to operational challenges. Key actions include adjusting prices on 35% of FMCG Key Value Items, updating promotional ranges through “Managers Specials,” reducing SKU counts in FMCG, home accessories, and toys, and improving on-shelf product availability, which is currently at an estimated 86% compared with industry best-practice levels of 98%.

Financial Performance and Outlook

Adjusted EBITDA (pre-IFRS 16) for H1 FY26 is expected at approximately GBP 198m (H1 FY25: GBP 274m), reflecting lower trading margins, wage increases, Extended Producer Responsibility tax costs of GBP 14m, and adverse FX hedge movements. The September 2025 leverage ratio is slightly above the 1.0–1.5x target due to seasonal working capital peaks.

For the full year FY26, Group adjusted EBITDA (pre-IFRS 16) is projected to be in the range of GBP 510m–GBP 560m, with B&M UK LFL sales expected to be the primary driver. Management noted that the full impact of operational changes will take 12–18 months to materialize.

Corporate Updates

The redomicile of B&M European Value Retail from Luxembourg to Jersey is proceeding as planned to simplify administration and provide flexibility for capital returns, including potential share buybacks.

Share Performance

The company is currently trading at GBX 207.70 per share down by 18.93% from the last close GBX 256.20.