So bandm have given an extra staff discount for tomorrow which is also open to family and friends. Last day of trading for the year. Does that mean they need a sales boost. |
Is the debt really that high? Net debt of £737m @ march 2024, excluding leases, most of which is issued as bonds.
Hopefully they will announce the new ceo soon, with David Potts rumoured to be taking over. That may prove a turning point. |
this is almost completely derisked at around 8 times but you cant see a catalyst out there in the near term. youd want the management to make some noises re the debt and the expansion. |
Don't forget the new warehouse. Has the rationale for this been blown off course or will it make the intended difference in 2025? |
agree JZ
debt paydown the most important thing and reduce the new store rollouts. that would make me much more confident. not having a ceo in place might actually reduce new openings whilst they await their new strategic direction.
chancellor's statement might well make this a tough week for holders. mind you, there might be a good few others which do too 😕 |
The price-war among supermarkets, increased competition and the increased cost base against a negative lfl trend here means no-one will want to take this over before its profitability goes lower. There is no pricing power here atm, could be the opposite. My crystal ball says that even new stores won't be able to keep profit up to where they have been.
Management should pay down the debt and cut distributions and use that as an excuse for investment and efficiency spending.
This is a healthy and competitive market. ASDA's owners are finally realizing that, and that they can't just strip everything and juice the divs. In the meantime, they've lost a lot of market-share that they might not regain.
B&M have to keep the prices low and invest. That means that looking in the mirror at the payouts that have been and thinking they will continue is rosy thinking. |
 who would buy?
asda in debt to their eyeballs
morrisons still sorting itself out
doesn't fit with sainsburys
tesco decided to concentrate on core business a while back and doing very well since
german discounters will probably do their own thing
home bargains is privately held and they are focussing on their own brand. can't see a merger happening, but combining those 2 would make a big operator. and certainly shake up this market. and could put asda out of business.
which leaves PE. which i mentioned before is probably the most likely buyer. i will leave others to speculate on that, i really don't know enough about the debt they would need alongside BME's high debt levels. but BME does (atm!) throw off huge amounts of cash which might be tempting at the current share price
a change in the chancellor's focus (and possibly a re-positioning of NI plans) in the spring statement could trigger a short term bounce.
those falling ma's do act as a lid on much of a jump, but there is a big gap above 325p which some theorists say should get filled sometime.
the trend is still down however so not a time to go very long for a PI |
Prime for a take over ? |
well done for catching the knife! |
Was better in the 250,s ! |
Looks to be a decent entry point to me. |
Heres one on interactive investor. FWIW. The impressive yield forecasts are based largely on the special dividends, and given that the adjujsted eps was 34p last FY , I question if this is a sustainable policy.
A £200,000 high-yielding investment by the chair of B&M European Value Retail SA
has backed the recovery of the discounter’s shares after their 50% slide since the start of last year.
Tiffany Hall, who joined the board in 2018, bought the FTSE 250-listed stock two days after B&M downgraded earnings guidance and said chief executive Alex Russo is to retire in April.
The shares ended last week at 277.7p but continue to have the strong support of several City firms, including Panmure Liberum after it disclosed a new lower price target of 600p.
The broker said: “The shares have been very poor the past year as trading has consistently disappointed, but we remain steadfast that the cash returns profile and the quality of the earnings means this remains a Buy.
“Debt levels remain fine and we do not see a risk of a dividend cut despite the negative trading.”
Strong cash generation amid an industry-leading return on capital in excess of 30% ensured the group last month paid shareholders a special dividend of 15p a share. This followed December’s interim dividend of 5.3p and the previous year’s ordinary and special distribution of 34.7p.
Bank of America expects a total of 28.8p in relation to the financial year ending later this month, rising to 32.5p for a projected yield of 11.5% in the 2026 financial year.
It regards a price/earnings multiple below eight times as appealing given the company’s relatively resilient profitability, cash flow generation and growth opportunity. It points out that this is a 50% discount to the former blue-chip’s historical average.
The bank, which has cut its price target from 580p to 450p, added: “A return to positive like-for-like sales in the 2026 financial year could help rebuild confidence in the business and provide a re-rating catalyst to reduce the current discount.”
B&M last week lowered its 2025 earnings guidance to between £605 million and £625 million, a 3% downgrade at the midpoint due to current trading, economic uncertainty and FX headwinds.
The guidance served up another setback after investors were given some hope in January’s Golden Quarter update as B&M reported a return to like-for-like sales growth for December. |
Nice article in moneyweek. Which was likely in print before the poundland news came out.
Granted, it won't make institutions change their mind, but hope a few more PIs throw their hats into the ring. 268.9p at close of play on Friday |
Anyone get any guidance on the budget costs. I have them down as being very significant, and that they haven't said anything about them worries me. |
just saw that and you beat me to the post. not a bad spot from me about poundland wanting out of the uk market was it?!
bought more at 262p. short term bottom in the share price i suspect |
This may be good news for B&M: |
Looking decent value @260, 10% cheaper than the directors wedge purchase, joined you for a few, GLA |
:) it's nice to know some people.are using their brains! |
JZ, at least you know my posts aren't AI created! |
Was that an AI response? 😂 |
While B&M is growing revenue and expanding stores, the drop in profits, cash flow, margins, and rising debt may have worried investors. Additionally, economic uncertainty, leadership changes, and market expectations could be driving the share price down. |
Key Issues Affecting the Share Price
1. Profit Decline
• Statutory profit before tax fell 24% YoY (£169m vs. £222m).
• Statutory operating profit dropped 14.6% (£235m vs. £275m).
• Statutory diluted EPS declined 24.9% (12.3p vs. 16.3p).
• Margins are shrinking despite revenue growth.
2. Cash Flow Weakness
• Post-tax free cash flow dropped by 49.2% (£73m vs. £143m).
• Cash generated from operations fell 14.1% (£303m vs. £352m).
• This could raise concerns about B&M’s ability to fund expansion and return capital to shareholders.
3. Weaker Operating Margins
• Group adjusted EBITDA margin dipped slightly (10.4% vs. 10.5%).
• Group statutory operating profit margin declined 190 basis points (8.9% vs. 10.8%).
• Suggests higher costs or pricing pressures.
4. Rising Net Debt
• Net debt increased to £788m (vs. £700m in H1 FY24).
• Debt including leases also worsened (2.5x EBITDA vs. 2.4x).
5. Macroeconomic Concerns
• The company mentioned “uncertain consumer environment”, meaning customers may be spending cautiously.
• Exchange rate volatility could impact stock valuation and creditor balances.
6. Executive Transition
• CEO Alex Russo’s retirement announcement in February may have raised concerns about leadership stability.
7. Market Expectations vs. Guidance
• While FY25 EBITDA guidance was slightly raised (£620m–£660m vs. FY24’s £616m–£629m), it may not have met analyst expectations.
• The share price may have dropped due to profit-taking if investors expected stronger numbers. |
nice article about the woes of asda whilst waiting for my target to be hit
perhaps nectar prices etc are hitting the discounters. bme has an app but no loyalty points, it just tells you this week's deals. that would likely be an easier win than fitting stores with self-scan? |
0.5% shorts disclosed, not a big position and can't be the cause of the drop
bit like greggs the last 6 months. making profit but it is all about the outlook.
trading near the covid lockdown low
waiting for the us market to open to see how that reacts, if bad it might push bme down even more. 225-230p area is the trend target
likely to add more between here and there.
not convinced by trading gaps but there remains quite a big one some way above. it would be nice if it got filled
sometimes bme is best treated as a trading share rather than the underlying company, for short time periods anyway |
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