B&M European Value earnings to top guidance after 'strong' H1

Discount retailer B&M European Value Retail said on Tuesday that first-half group adjusted earnings are set to be above its previously-guided range following strong sales.

In an update for the 29 March to 26 September, the company said group revenue grew 25.3%, with B&M UK stores generating revenue growth of 29.5%, including like-for-like growth of 23%.

The "strong" first half growth and profit uplift were driven mainly by an "elevated" spend per visit, the company said, as its "value-led, variety goods model and its convenient, easily-accessible, out-of-town locations continue to prove attractive to customers".

The retailer said trading momentum at its UK stores continued in the second quarter, with 19.1% LFL growth.

As a result, it now expects adjusted earnings before interest, tax, depreciation and amortisation, pre-IFRS16, to be above the previously guided range of between £250m and £270m, at around £285m.

Chief executive Simon Arora said: "Our group has performed well in the first half. Our business model is proving well-attuned to the evolving needs of customers, given our combination of everyday value across a broad range of product categories being sold at convenient out-of-town locations."

B&M highlighted positive LFL sales growth at its Heron Foods convenience store chain, which opened six new stores.

Meanwhile, French business Babou saw positive LFL sales growth since re-opening on 11 May, with total first-half revenue of €156.8m and a small positive EBITDA outturn for the half year despite lockdown closures over the first six weeks.

At 0810 BST, the shares were up 4.5% at 12.20p.