The Illuminator – April 2024

This month we profile the new entrant: B&M European Value Retail.

B&M European Value Retail’s post-close FY24 trading highlighted strong revenue growth of 10.1% to £5.5bn, driven by impressive volume growth, despite the tough UK consumer backdrop. Its UK store rollout progressed in the year bringing the total number of stores to 47 in FY24, with the company opening two new stores, ahead of management’s guidance. Profits are expected at £629m, towards the top end of its £620–630m adjusted EBITDA guided range and reflecting 9.8% y-o-y growth.

B&M European Value Retail’s core focus on offering discounted products at low prices continues to attract customers, particularly within the context of tighter household budgets. Despite inflationary pressures on costs and wages, the company upgraded profits at the interim results and delivered FY24 at the top end of guidance. With increased guidance for its UK store estate of 1,200, B&M continues to grow its total sales space.

The business is cash generative, supporting the lowering of its net debt to EBITDA leverage ratio to 1.2x (FY23: 1.3x) at end-FY24. Shareholders have been rewarded over the past four years, with £1.8bn in cumulative cash distributions between FY21 and FY24. Consensus is forecasting positive free cash flow alongside continued growth in sales, profits and the dividend per share.