B&m European Value Retail Share Discussion Threads

[jsg123] 18/11/2024 13:20

Don't know where you saw that seemed to be flatish the day it was announced last year, then rose for the next 6 weeks.
This has lost 10% in 1 day since Friday AM. Baffled by this

[muzmanoz] 18/11/2024 11:10

As for the drop today today it dropped last November when they announced a bond raise. But they had to refinance the 2025 bonds.

[philanderer] 18/11/2024 10:26

B&M European led the laggers, losing 2.4%.

It announced a GBP250 million senior secured notes offering due 2031, which it said will support store expansion and inventory amid shipping disruptions.

RBC meanwhile has cut its price target for B&M to 500 pence from 550p, but maintained its 'outperform' rating.


Market report Alliance News

[backmarker] 18/11/2024 09:59

I started following BME at the beginning of this year and have been puzzled by the share price movement ever since. On the face of it the company seems to be doing well, or am I just beguiled by Russo's spartan oration.But this latest drop is quicker than the previous reactions to trading news, so something is clearly amiss, but I don't know what.I am always willing to learn, and this seems like an excellent case to focus on.Is it that the plans are too grand that is worrying investors; opening so many new stores, a huge new distribution centre on the way, are these signs of overextension?Is it that the stores can only provide so much profit each and once they reach that ceiling the only route to growth is more stores until that hits a ceiling too?Maybe Russo's trick is to focus purely on price/value for now, then switch to building margins once he has increased the retail base.It will be interesting to watch and learn, though I wish there was more info and analysis that I could access.

[arja] 18/11/2024 03:29

the ftse 100 FUTURES WELL up since UK close on friday and might just help BME as market should be bullish . But chart does not lie and Sadly there might be more downside .

[grabster] 17/11/2024 23:59

That closing 90 minutes on Friday was brutal.

[grabster] 17/11/2024 23:57

... like-for-like sales in the UK business remain 3.6 per cent lower than last year, with growth fuelled purely by new store openings. This has concerned analysts in the past, not least because it means B&M’s lease liabilities keep climbing. Net debt to adjusted Ebitda including leases rose from 2.4 times to 2.5 times in the period.

News from the boardroom may also have worried investors. Bobby Arora – the group's trading director who bought B&M with his brother in 2004 – will retire in March 2025. Although he is to be replaced by Gareth Bilton, who has been with the company for 25 years, analysts warned that the market may be “miffed”.

Profits require close scrutiny too. While adjusted Ebitda edged up to £274mn in the period, adjusted operating profit declined by 1.8 per cent and statutory numbers were hit by £23mn of adjusting items.

Shares in B&M have struggled this year, and the group looks cheap on a forward price/earnings ratio of 9.7, versus a five-year average of 14. However, forecasting tends to be a little vague at the retailer and we are concerned by the UK’s lack of like-for-like growth. Downgrade to hold. (Jemma Slingo at IC)

[ianguerin] 17/11/2024 20:21

Peel Hunt: B&M shares cheap

hxxps://citywire.com/funds-insider/news/expert-view-burberry-science-in-sport-keller-boohoo-b-and-m/a2454471?page=5

[grabster] 15/11/2024 16:08

The 5% spike from release of those results didn't last long.

[grabster] 15/11/2024 14:40

Some very negative reactions and question marks reported in The Grocer mag. Mostly to do with what B&M (suspiciously!) didn't say rather than what it did say:


B&M faces ‘moment of truth’ after mixed results
By Harry Holmes14 November 2024

B&M Bargains
Analysts were split on the half year results


---
B&M faces a “moment of truth” over the Christmas period after splitting opinion on its financial results for the first half of the year.

The company maintained its profit guidance for the full year after group revenues rose 3.7% to £2.6bn due to strong volume growth.

“This is a good performance as we annualise a record prior year of earnings growth with strong first half comparatives,” said CEO Alex Russo.

However, like-for-like sales in the UK fell 3.6% meaning most of this growth was fuelled by opening new stores. This is worrying some investors, who are concerned about the company’s climbing lease liabilities.

B&M opened 39 new stores in the six months to 28 September as it looks to hit its long-term target of 1,200 UK stores, up from 764 today.

“Discount chain B&M has had a rough year and while these latest first-half results didn’t exactly knock it out of the park there was enough encouragement for investors to latch on to,” said AJ Bell investment director Russ Mould.

B&M’s share price has struggled this year, with its price down 34% relative to the all-share index. Many investors are wary of the retailer’s history of vague forecasting and these results, unusually, did not include any mention of its performance in the latest third-quarter.

“There may be a touch of disquiet at a lack of guidance on third-quarter trading and the ‘golden quarter’ could be a moment of truth for B&M,” said Mould. “It faces a tough competitive environment, with pressure not only from direct rivals like Home Bargains but also the supermarkets.”

While the early reaction in the markets was largely positive with B&M’s share price up 5%, there continue to be dissenting voices.
B&M has been a bit of a rags-to-riches story, however, the engine has cooled materially and this H1 performance fulfils all of our prior apprehensions,”; said Shore Capital analyst Clive Black.

Black raised concerns over B&M’s transparency, pointing to its reporting of like-for-like sales (LFL) in the UK but excluding the information for the whole group. This is “brewing a storm and is somewhat cowardly”, said Black.

He added: “The erosion of reporting transparency, largely around LFL sales, is a sign of weakness not strength to us in B&M’s headline performance, as if market participants will not suss it out,” he added.

Elsewhere, however, the reaction was more positive. “B&M’;s laser focus on price means its value-for-money advantage is widening and volumes are growing, especially and crucially in non-food,” said Peel Hunt. “We expect continued strong sales-led growth, towards the top end of our structural growth subset.”

Bobby Arora, the group’s trading director who bought B&M with his brother in 2004, will retire in March 2025 and be replaced by Gareth Bilton, who has been with the company for 25 years.

B&M is also planning a new imports centre in Cheshire to support its hundreds of new stores. This will manage inbound container flow and optimise the capacity of its five distribution centres.

[wad collector] 15/11/2024 14:13

Taking over those Wilko stores must have generated a barrowload of admin.

[scbscb] 15/11/2024 11:59

In the first half 2025 the gross profit was up 5.8%. There was a huge increase in administrative expenses from 666 to 761 that's a 14.3%increase so operating profits were lower that last time. Was there any explanation of this on the web cast? There is no mention in the interim report. This is the main reason for the fall in earnings. Everything else looks OK in the first half.

[muzmanoz] 15/11/2024 11:39

Under the Aroras it felt like a fast moving, entrepreneurial business. Under Russo it feels like a penny pinching, bureaucracy run to a script. Time will tell if this is what the business needs.

[wad collector] 15/11/2024 10:52

Not much golden about the continuing share price slide! I would settle for bronze but looking like tin plate at the moment.

[backmarker] 15/11/2024 07:53

With the Golden Quarter about halfway through there were one or two hints that they expect Q3 to be at top end of expectations.

[roguetraderuk] 14/11/2024 14:40

red sea shipping costs, ni, slowing consumer all these issues have been/are a worry but at the current 10 times its prob in the price. excellent fcf at the last read, i think it should at least outperform the sector at worst and a base case should be for some capital appreciation despite a dodgy looking chart. the shares have seen strong weeks like this one is shaping to be yet the following week it headed lower again.

[backmarker] 14/11/2024 14:21

Nothing wrong with these results, so hard to see justification for fall over last 3-4 months.Yes, working capital has increased, but this has been adequately explained.Yes, the rate of growth has been less, but it is still growth and looks like a small perturbation.The company sounds very bullish and you have to be impressed they are already buying for 12 months ahead.With their strategy set on growth through volume alone, and with lots of new stores coming along at a 12-month payback to provide that growth, the share price should have been rising over the past 3 months not falling. Adding back the fall, then adding something for the future growth, surely we should be looking at 500p plus.

[wad collector] 14/11/2024 14:06

Err ...640M from 622.5M is rather less than 28% unfortunately. It is 2.8% !

[grabster] 14/11/2024 11:21

That's a mid-range to mid-range increase of 28%
EDIT: Losing my marbles here - dot missing. It's 2.8%. Thanks Wad!

[wad collector] 14/11/2024 09:28

The most interesting bit to me is the outlook;



With growing volume momentum, and with broadening strength in general merchandise, we are confident in our outlook for the second half and the full year. We anticipate full-year Group adjusted EBITDA2 (pre-IFRS 16) to be in the range of £620m-£660m (FY24 52/53 weeks: £616m/£629m).

[grabster] 14/11/2024 09:09

Mr Billington and Mr Mayman I think would be surprised that their initials were still featured in the storefront badge, and shoppers won't have a clue (or care) who they ever were. But the style of that facia makes no pretense at the stores being anything other than a lowpriced outlet. And that's going to do the company no harm in the ongoingly belt-tightened world this Xmas. Where it tops the likes of Aldi and Lidl is in selling a lot more of the recognized brands among the food and toiletry offerings. Image-conscious Waitrose/M&S customers might only dare go in disguise of course, or send someone in with a list. Or be shopping for a friend. I've been in (call me frugal) but the nearest branch (12 miles away) is further than I go for routine shopping.

[bulltradept] 14/11/2024 08:32

Reversing now, sinking in profit lower going forwards.

[grabster] 14/11/2024 08:30

- and testing the Oct 30 close (402.25) next?