Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- B&M European Value Retail SA (BMRPF, Financial) reported a 2% increase in group adjusted EBITDA to GBP 274 million, demonstrating strong cost discipline and effective volume-driven sales strategies.
- The company declared an interim dividend of 5.3p, up 3.9% from the previous half, reflecting confidence in its cash generation capabilities.
- B&M European Value Retail SA (BMRPF) plans to open 45 new stores in the UK this year, with a disciplined approach to expansion that ensures each store contributes positively to the bottom line.
- The company has successfully implemented a new warehouse management system in France, enhancing operational efficiency and supporting future growth.
- B&M European Value Retail SA (BMRPF) is committed to returning cash to shareholders, with share buybacks underway and a history of GBP 1.9 billion returned since 2020.
Negative Points
- Like-for-like sales were down 3.6%, impacted by challenging weather conditions and a tough consumer environment.
- The company's adjusted diluted EPS decreased to 14.7p, influenced by higher interest charges and a larger asset base.
- Operating costs have increased due to the expansion of the store estate and significant rises in national living wage rates.
- The transition to a new warehouse management system in France incurred one-off costs, temporarily affecting reported margins.
- The company faces ongoing inflationary pressures, particularly in labor costs, which require careful management to maintain margins.
Q & A Highlights
Q: How are price gaps versus Tesco and Sainsbury's? Are they stable over time?
A: The price gaps are stable, ranging from 15% to 20% after discounts. The most expensive of the four competitors is at 20%, and this stability is maintained over time. (Alex Russo, CEO)
Q: Do buybacks mean you are unlikely to pay special dividends?
A: No decision has been made on the distribution method. The company will continue to distribute excess cash, and the CFO will update the market on the optimal way to do so. (Alex Russo, CEO)
Q: How difficult is it to redomicile, and are there risks in achieving this?
A: There are no risks involved. The process requires the right leadership, which the company has, and the work is underway. (Alex Russo, CEO)
Q: Can you comment on current trading momentum and like-for-likes in the third quarter?
A: Trading momentum has improved from Q1 to Q2, and the company expects to continue gaining volume market share. However, specific quarterly like-for-like figures are not disclosed. (Alex Russo, CEO)
Q: What are the puts and takes at the bottom versus the top of the guidance range for EBITDA?
A: The range is underpinned by cost prices and price position, with well-controlled cost lines. The company is comfortable with the range and does not need a high nominal like-for-like to be within it. (Alex Russo, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
