B&M shares soar amid earnings, margins boost

Shares of Liverpool-based B&M European Value Retail rose about 7% on Wednesday after it published a trading update for the half year ending September 25, 2021, in which it forecast earnings before interest, taxes, depreciation, and amortization (EBITDA) well above market estimates thanks to stronger-than-expected margins at its UK stores.

B&M is based in Liverpool and registered in Luxembourg — but its shares trade in London, where its stock rose 6% to around 575p to give the firm a current stock market value of around £5.75 billion.

Whilst group revenues year to date have been broadly in line with market expectations, gross margins have been stronger than originally anticipated in the B&M UK fascia business,” said B&M.

Performance of general merchandise and seasonal categories has been particularly encouraging.

“Sell-through rates in those categories have been high and accordingly end of season markdowns have been limited.

As a consequence, the group now expects adjusted EBITDA (on a pre-IFRS16 basis) for H1 FY22 (covering the 26 week period to 25 September 2021) to be in the range of £275m to £285m. 

“The analysts’ consensus estimate for H1 FY22 adjusted EBITDA is currently approximately £235m.  

Although the group is well positioned for the upcoming Golden Quarter, trading patterns and strength of customer demand remain highly uncertain for the balance of FY22.

The group will provide further detail in its FY22 Interim Results on 11 November 2021.”

 

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