14 November 2024

FY25 Interim Results

Disciplined execution: volumes growing and well set up for the Golden Quarter

B&M European Value Retail S.A. ("the Group"), the UK's leading variety goods value retailer, today announces its interim results for the 26 weeks to 28 September 2024.

Highlights

Alex Russo, Chief Executive, said:

In the first six months, we delivered Group adjusted EBITDA² (pre-IFRS 16) up 2.0% to £274m driven by total sales growth of 3.7%. This is a good performance as we annualise a record prior year of earnings growth with strong first half comparatives. We continue to execute with Everyday Low Price ("EDLP") integrity for all our customers, with industry leading availability and excellence in operational standards. Our model is underpinned by a disciplined and low-cost approach across all three of our businesses, focusing on simple, sustainable growth, delivered through the hard work of our teams.

Our product ranges across both grocery and general merchandise resonate very well with customers at a time when disposable incomes remain under pressure and the tax burden continues to increase. We have made significant progress over the last three months in general merchandise, particularly in Home, with the range strengthened and prices lowered further to drive volume market share.

Our new store opening programme is on track and performing exceptionally well. To futureproof this volume growth, I am pleased to announce that next year we will open a new imports centre in Ellesmere Port. This facility will manage inbound container flow and optimise the capacity of our five existing B&M UK distribution centres which are handling ever-growing volumes. This is the right productivity step to support both our short and long-term growth plans, including our target of not less than 1,200 B&M UK stores. We are currently extending our French distribution centre demonstrating the growth plans in place for France.

Our long-term ambition for the Group remains unchanged, in supporting customers with exceptional value. As we trade through the Golden Quarter, we are encouraged by recent volume momentum and remain focussed on delivering profitable, cash-generating growth for all of our shareholders.

Outlook and guidance

The business is well positioned for the Golden Quarter with its continued focus on price, product and standards. While the consumer environment remains uncertain, the Group has demonstrated it executes well in all trading environments.

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).

Financial results (unaudited)

Notes:

1.    References in this announcement to the B&M UK business include the B&M fascia stores in the UK except for the 'B&M Express' fascia stores. References in this announcement to the Heron Foods business include both the Heron Foods fascia and B&M Express fascia convenience stores in the UK.

2.    Adjusted values are considered to be appropriate to exclude unusual, non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of account. See notes 3 and 4 of the financial information for further details.

3.     Constant currency comparison involves restating the prior year Euro revenues using the same exchange rate as that used to translate the current year Euro revenues.

4.     One-year like-for-like revenues relate to the B&M UK estate only (excluding wholesale revenues) and include each store's revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY23. This 14-month approach has been adopted as it excludes the 2-month halo period which new stores experience following opening.

5.    Please see note 3 of the financial statements for more details and reconciliation to the Consolidated statement of cash flows. Statutory Group cash generated from operations was £303m (H1 FY24: £352m). This statutory definition excludes payments for leased assets including the leasehold property estate.

6.     Dividends are stated as gross amounts before deduction of Luxembourg withholding tax which is currently 15%.

7.    Net debt comprises interest bearing loans and borrowings, overdrafts and cash and cash equivalents. Net debt was £788m at the half year end (H1 FY24: £700m), reflecting £973m (H1 FY24: £924m) as the carrying value of gross debt netted against £185m of cash (H1 FY24: £224m). See note 7 of the financial information for more details.

Results Presentation

An in-person presentation for analysts in relation to these FY25 Interim Results will be held today at 09:30 am (UK) at London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. Attendance is by invitation only and attendees must be registered in advance. 

A simultaneous live audio webcast and presentation will be available via the B&M corporate website at:

Reports & Presentations l B&M Stores (bandmretail.com) for analysts and investors only.

A further call for North American investors only is scheduled today at 16:00 (GMT). To register please contact Dave McCarthy via email at dave.mccarthy@bmstores.co.uk

Enquiries

B&M European Value Retail S.A.

For further information please contact: +44 (0) 151 728 5400 Ext 6363

Alex Russo, Chief Executive Officer

Mike Schmidt, Chief Financial Officer

Dave McCarthy, Head of Investor Relations

Investor.relations@bandmretail.com

Media

For media please contact:

Sam Cartwright, H-advisors, sam.cartwright@h-advisors.global +44 (0) 7827 254 561      

Jonathan Cook, H-advisors, jonathan.cook@h-advisors.global +44 (0) 7730 777 865

Disclaimer

This announcement contains statements which are or may be deemed to be 'forward-looking statements'. Forward-looking statements involve risks and uncertainties because they relate to events and depend on events or circumstances that may or may not occur in the future. All forward-looking statements in this announcement reflect the Company's present view with respect to future events as at the date of this announcement. Forward-looking statements are not guarantees of future performance and actual results in future periods may and often do differ materially from those expressed in forward-looking statements. Except where required by law or the Listing Rules of the UK Listing Authority, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect any events or circumstances arising after the date of this announcement.

About B&M European Value Retail S.A.

B&M European Value Retail S.A. is a variety retailer with 764 stores in the UK operating under the "B&M" brand, 338 stores under the "Heron Foods" and "B&M Express" brands, and 129 stores in France also operating under the "B&M" brand as at 28 September 2024. It was admitted to the FTSE 100 index on 21 September 2020.

The B&M Group was founded in 1978 and listed on the London Stock Exchange in June 2014. For more information, please visit www.bandmretail.com

Chief Executive's review

I am pleased to report another period of good performance following a record-setting prior year that featured a particularly strong first half. This is a good position to reflect on the journey that the Group has been on over the last five years and assess the significant opportunity for profitable growth in the years ahead. Today the Group is structurally bigger and stronger compared to FY20, with revenues over 40% higher than the last pre-pandemic year. We will continue to deliver profitable, cash-generating growth across the UK and France through positive like-for-like performance and targeted space growth.

We will remain disciplined and focused on our key fundamentals - price, product and standards. Momentum has built through the first six months and we exited with a clean stock position and a business well set up for the Golden Quarter. In the first half, despite the unseasonal weather and timing of Easter, we delivered volume-led Group sales growth of 3.7% overall, with second quarter sales growth increasing to 5.8%. The store rollout programme is on track across the Group as we opened 39 gross new stores. Group adjusted EBITDA² (pre-IFRS 16) rose 2.0% to £274m and we are pleased to announce an interim dividend⁵ of 5.3p per share.

The Group's long-term outlook is strong. Our balanced operations in buying, logistics, and retail drive efficiency, ensure excellent customer availability, and yield best-in-class returns on investment. In the UK, our long-term store target, of not less than 1,200 B&M stores gives significant upside from our current 764 store estate today. In France, the potential is even greater, with a significant white space expansion opportunity ahead over the long-term. Meanwhile, Heron Foods continues to maintain strong margins and cash returns, while growing its brand reach.

Growth strategy update

The growth fundamentals of the Group are strong and the business is run in a highly disciplined manner focused on pricing integrity, product and operational standards which will continue to generate a high quality of earnings in the short and long-term.

We pride ourselves on our EDLP approach that avoids the cost and complexities of high-low pricing and loyalty schemes. We are very confident in our absolute and relative price position, which for B&M UK is 15-20% lower (inclusive of loyalty schemes) on FMCG branded lines compared to mainstream supermarkets. We measure this weekly, picking up a consistent and well-balanced assortment of hundreds of lines across all our categories that represent a customer's broad basket. In general merchandise, the market is highly fragmented and as we leverage our large order book across our limited number of directly sourced ranges, our relative price position is even stronger.

We maintain discipline on our SKU count across both FMCG and general merchandise. In FMCG, B&M stocks 4,500 lines of best-selling branded products, which are largely ambient grocery items. Our 5,500 general merchandise products are trend-led and change seasonally as we drive the return on space in our stores. The quality of our ranges has improved significantly over the last five years which has helped broaden the appeal, particularly in Home categories. This strengthening of our product offer over the last three months coupled with low, sharp prices provides our customers with outstanding value. Our selection has never looked better which is translating into momentum in general merchandise, particularly in Q2.

Store standards remains a constant focus of the business with the B&M UK senior retail team visiting over 350 stores each week. Our stores operate consistently over 8 out of 10 every week. All respective retail and store teams drive this process and have a clear passion for delivering retail excellence for our customers. I am pleased that for the third successive year, staff turnover has decreased by c.500bps per annum. I take great confidence from the pride that our teams take in each of their stores.

Our new stores are performing exceptionally well. We plan to open 45 B&M UK new stores this year, with 30 already opened in the first half and we target a similar number of openings next year. We have opened 44 ex-Wilko stores to date with 8 more to open in the second half of the year. As with all of our new openings, these stores are performing well and we expect them to pay-back within 12 months on average, in line with prior experience. 

Our long-term goal is to reach not less than 1,200 B&M UK stores over the next decade, based on demographics, store performance, and competitor weakness. To support our volume growth, we plan to open a new UK imports centre in FY26 dedicated solely to general merchandise inbound containers. Our annual container volumes have grown by 40% over the period 2019-2024 and this development will free up space in our existing five distribution centres, increasing their capacity and efficiency as we continue our disciplined growth.

In France, we have long-term growth ambitions given the significant white space expansion opportunity ahead. As with the UK business, we have strengthened the supply chain to support further volume growth, a new Warehouse Management System (WMS) has been successfully implemented in the first half which will help optimise and manage warehouse operations. We are currently extending the French distribution centre which will add further capacity for volume growth. Both projects will help unlock the exciting growth potential in France.

We are now well into the third year of demonstrating sustained higher post-pandemic financial performance. Structural factors have improved our revenue and gross margin, sustainably supporting our long-term B&M UK adjusted EBITDA² (pre-IFRS 16) margin at 12-13% and driving our cash generation. Key factors include our increased buying power (revenues >40% higher than in FY20), strengthened product ranges that appeal to a broader range of customers and an evolved category mix. Additionally, our buying strategy has evolved. We purchase on a "test and repeat" basis for new general merchandise products, placing smaller initial orders, reducing the markdown risk while maintaining buying power.

In summary, gross margin depends on three factors: purchase price, selling price and mix. We buy more, we sell more, and we serve a higher number of customers than ever before. It is this sales growth in B&M UK over recent years that has expanded profit margins. Our proposition is all about volume growth, and we are perfectly suited (with our EDLC structure) to continue to leverage the volume and grow earnings in the long-term.  

Competitive position

The growth of discounting remains strong across the UK and in other parts of the world. Research shows that Lidl is the fastest-growing major UK supermarket, and Aldi's consumer penetration remains strong. These food discounters are complementary to B&M's range of best-selling ambient branded products, and together we continue to gain volume market share.

People

Our colleagues remain as committed as ever and are critical to the future success of the Group and I thank them all for their contributions and hard work. Many of our colleagues, particularly store colleagues, grow with the company - from customer service assistant to store manager and beyond. We develop our teams within the business and promote hard working and ambitious people across all functions. This is key to the long-term success of B&M and is something that I am passionate about.

Succession plans are in place for the leadership of the trading function at B&M UK. The Group confirms that Bobby Arora, Group Trading Director, will retire from B&M in March 2025. Bobby has agreed to provide advisory services to the Group for a short period following the commencement of his retirement. Along with his brother Simon, Bobby has made an immense contribution to B&M's growth and success over many years. As CEO, Bobby has been a valued partner to work personally with and I wish him the very best in his retirement, on behalf of the business.

Bobby will be succeeded by Gareth Bilton and this handover is already well progressed. Gareth has over 25 years experience at B&M and he leads a strong and experienced buying and merchandising team. James Kew has been appointed Retail Director at B&M UK. James has over 11 years' experience leading store operations within the business, having started his career as a store manager.

I believe in internal talent progression, and both Gareth and James are great examples of leaders who understand the B&M culture. I wish them both well for the future.

Redomicile

The Group has commenced a formal review of options to relocate the parent company's corporate domicile, to simplify administrative processes and enable greater flexibility in returning capital to shareholders, including through share buybacks. The project, which is being undertaken in conjunction with external advisers, is at an early stage and there can be no certainty that any change will ultimately be implemented. The Group intends to retain its London listing in the event that any change is ultimately implemented. An update will be provided in early 2025.

Alex Russo

Chief Executive Officer

13 November 2024

Financial review

Group

*includes depreciation on right-of-use assets of £90m (H1 FY24: £85m). H1 total depreciation & amortisation was £134m (H1 FY24: £124m)

Group revenues for the 26 weeks ended 28 September 2024 increased by 3.7%, (3.9% on a constant currency basis²), with growth across all fascias. Q1 delivered 2.9% total sales growth and momentum built into Q2 with 5.8% total sales growth. In B&M UK, our store opening programme is well on track and new space provided 7.3% sales growth that was offset against a 3.6% decline in like-for-like³ (LFL) sales. Both B&M France and Heron Foods also delivered total sales growth in the half.

Group gross profit increased by 5.9% year-on-year (YoY) with a particularly strong trading margin performance in B&M UK. This was driven by mix benefits within general merchandise categories, favourable foreign exchange, lower freight rates, and excellent execution of the Spring/Summer season that resulted in limited markdowns being required. 

Group adjusted operating costs on an underlying basis⁴ grew by 7.0% to £710m (H1 FY24: £664m). The number of stores across the Group increased by 6.2% or 72 stores year-on-year, with the remaining increase coming from investment in our supply chain in France and increases in UK minimum wage rates that are not yet offset through productivity gains.

Group adjusted EBITDA² (pre-IFRS 16) increased by 2.0% to £274m, representing a margin of 10.4%. This was driven by sales growth, with cost pressures across the Group well managed.

Group adjusted operating profit² decreased by 1.8%. Total depreciation and amortisation grew by 7.3% to £134m which moved in line with the continued growth of the store estate.

Adjusting items² were a net charge of £23m (H1 FY24: net credit of £12m). The primary driver of this was the fair value of our unmatured foreign exchange derivatives (£19m loss, H1 FY24: £12m gain). For further details please see note 3 of the financial statements.  During the period there was also a £2m one-off charge in relation to the Wilko store leases acquired under the September 2023 option agreement and a £2m charge in relation to an accrual for the management retention bonus for the Group Trading Director, both of which were not present in the comparative period.

Statutory operating profit decreased by 14.6%, primarily reflecting the impact of adjusting items mentioned above.

Excluding IFRS 16, net finance costs increased by £7m to £28m primarily due to higher interest charges on the £250m high yield bond issued in November 2023. Finance charges relating to right-of-use assets increased by £6m to £38m due to the additional leases associated with the store opening programme and higher discount rates in recent years.

B&M UK

In B&M UK⁵, total revenues increased by 3.7% to £2,121m (H1 FY24: £2,045m), with LFL³ revenues down 3.6%. Our Q1 LFL³ of (5.1)% was impacted by calendar effects of peak Easter 2024 trading falling into the previous 53-week period and particularly wet weather. However, LFL³ performance improved in the second quarter to (1.9)%. New space added 7.3% growth in the half due to the opening of 52 net new stores in the store estate year-on-year. Our balanced sales mix between FMCG and General Merchandise remains intact and in-line with our expectations.

Our trading gross margin rose 66 bps year-on-year to 36.7% from 36.0%. This reflected favourable freight rates, mix effects, and from strong sell-through in general merchandise which generated minimal markdown activity. Statutory gross margin increased 82 bps to 37.6% from 36.8%, with the difference to trading gross margin reflecting principally foreign exchange derivative accounting.

There were 30 gross (23 net) new stores openings in H1, representing significant progress to the full financial year target of at least 45 new stores. These new stores are trading well across a diverse range of locations.

Return on investment for our store opening programme remains in-line with our expectations of an average payback of 1 year - inclusive of net working capital and all operating expenses. Analysing the most recent openings that have had a full financial year of trading, specifically a cohort of 35 stores that opened between April 2022 and September 2023, we invested £50m in store fit-out, pre-opening operating expenditure and estimated increased working capital.  This cohort generated £50m of profit contribution over the last twelve months (after fully accounting for direct logistics, central costs and store rents). The total average square footage of the B&M UK store estate at the period end was 16.3m, an increase of 5.9% year-on-year.

In addition to revenue generated in-store, B&M UK revenues also included £14m of wholesale revenues (H1 FY24: £15m), the majority of which represented sales made to our associate Centz Retail Holdings Limited, a chain of 56 variety goods stores in the Republic of Ireland.

Adjusted operating costs on an underlying basis⁴ increased by 7.3% to £547m (25.8% of revenue) from £509m (24.9% of revenue). The increase in operating costs year-on-year is primarily due to the 7.3% increase in the store estate.

Adjusted EBITDA¹ (pre-IFRS 16) increased by 2.4% to £240m (H1 FY24: £235m), with adjusted margin decreasing slightly by 15 bps to 11.3% (H1 FY24: 11.5%), due to the revenue growth described above, offset by increased underlying operating cost base and foreign exchange retranslation losses year-on-year. Adjusted operating profit¹ was £228m (H1 FY24: £228m) with a margin of 10.8% (H1 FY24: 11.2%).

Statutory profit before interest and tax for the period was £228m (H1 FY24: £230m).

B&M France

In France, revenues increased by 6.8% to £247m (H1 FY24: £232m). This was a good result especially given the strong comparative period being annualised. The performance reflects volume growth from new stores and a positive LFL driven by the evolution to a more focused FMCG and general merchandise range.

The business is on track to open 11 new stores by the end of the financial year, with 5 opened in H1 FY25.

Adjusted operating costs on an underlying basis⁴ increased by £10m to £93m. This increase reflects volume growth and also one-off warehouse investment costs that arose from the successful implementation of a new warehouse management system.  

Adjusted EBITDA¹ (pre-IFRS 16) decreased to £17m (H1 FY24: £18m) representing an adjusted EBITDA margin of 6.9% compared to 7.8% last year due to the higher operating costs described above. We continue to expect B&M France to grow its EBITDA margins over time reducing the differential with B&M UK. Adjusted operating profit¹ was £18m (H1 FY24: £20m) with a margin of 7.1% (H1 FY24: 8.7%).

Statutory profit before interest and tax for the period was £18m (H1 FY24: £20m).

Heron Foods

Our discount convenience offering, Heron Foods, performed resiliently generating revenues of £276m.  This represents a 1.1% increase from H1 FY24 (£272m) despite continued pressure on its customer base. Heron will continue its strategy of maintaining competitive prices and delivering exceptional value on everyday essentials and clearance specials.

Adjusted operating costs on an underlying basis⁴ remained flat at £69m (25.2% of revenue) and as a % to revenue compared to the prior year (25.3% of revenue), with good operational discipline firmly present in the business. 

Heron opened 4 gross (3 net) new stores in the period and remains on track to open between 18 and 20 in total for the full year.

Adjusted (pre-IFRS 16) EBITDA¹ increased by 2.4% to £18m (H1 FY24: £18m) representing a sector-leading margin of 6.7% (H1 FY24: 6.6%). Adjusted operating profit¹ was £13m (H1 FY24: £15m) with a margin of 4.8% (H1 FY24: 5.5%).

Statutory profit before interest and tax for the period was £13m (H1 FY24: £15m).

Post-tax free cash flow⁶, capital expenditure and leverage

Post-tax free cash flow⁶ of £73m (H1 FY24: £143m), represents a £70m reduction year-on-year caused primarily by an increase in working capital of £86m in the first half. Group inventory levels increased by £234m due to a materially larger number of stores and also due to earlier shipping dates selected to mitigate the impact of the Red Sea disruption.

Group net capital expenditure, excluding IFRS 16 right-of-use asset additions, was £59m (H1 FY24: £48m). This included £28m spent on 39 gross new stores opened in the first half across the Group (H1 FY24: £18m on 28 stores), £20m on maintenance works (<1% of H1 revenues) to ensure that our existing store estate and warehouses are appropriately invested (H1 FY24: £13m), and a total of £11m on infrastructure projects and opportunistic freehold acquisitions or disposals (H1 FY24: £17m).

Net debt⁷ to last-twelve-months adjusted EBITDA¹ (pre-IFRS 16) is at 1.2x at the end of H1 FY24 (H1 FY24: 1.1x), maintaining the ratio within the lower half of our target range, despite additional stock build up. Incorporating IFRS 16, net debt to last twelve-months adjusted EBITDA was 2.5x (H1 FY24: 2.4x).

Dividend

The Group has previously paid ordinary dividends at 30-40% of adjusted (pre-IFRS 16) retained profit per annum, in-line with our capital allocation policy which has remained unchanged since our IPO in 2014.

In recent years, the Group has consistently paid at the top end of this range, reflecting our robust financial position and strong cash generation that is underpinned by our disciplined approach to capital investment and working capital.  These ordinary dividends have been also supplemented by additional special dividends typically announced following the end of Christmas peak trading. 

In total, the Group has returned over £1.9bn in total dividends since March 2020, and in excess of 60% of this amount has come as special dividends. Given the outlook for the Group, the Board consider it appropriate to increase for FY25 the payout range for ordinary dividends to 40-50% of after-tax adjusted earnings (post-IFRS 16), with an aim to consistently payout a progressive ordinary dividend near the mid-point of that 40-50% range over time.

An interim dividend of 5.3p⁸ per Ordinary Share will therefore be paid on 13 December 2024 to shareholders on the register at 22 November 2024. The ex-dividend date will be 21 November 2024. The dividend payment will be subject to a deduction of Luxembourg withholding tax of 15%.

Shareholders and Depository Interest holders can obtain further information on the methods of receiving their dividends on our website or by visiting the website of our Registrar, Capita Asset Services at www.capitashareportal.com.

Financial Guidance

As previously communicated in FY24, we have adopted a revised approach to guidance and current trading disclosures across our financial calendar.  At our preliminary annual results we provide broad guidance for the upcoming financial year. Alongside our interim results in November, we provide a narrow guidance range for Group adjusted EBITDA¹ (pre-IFRS 16) and also Group adjusted operating profit¹.  We feel that Group trading performance is best assessed over meaningful periods of at least 13 weeks, so we will not provide current trading updates in either the preliminary results or interim results. Instead, trading updates are given in scheduled Q1, Q3 (Golden Quarter) and Q4 pre-close statements. This approach is unchanged from that shared in November 2023.

As outlined in the CEO review, the Directors expect Group adjusted EBITDA¹ (pre IFRS-16) of between £620m-£660m across the full financial year (FY24 52/53 weeks: £616m/£629m). This is indicatively equivalent to Group adjusted operating profit¹ of £590m and £630m (FY24 52/53 weeks: £602m/£614m).  This guidance range is based on our expectation that trading momentum will continue to build from the first half. It also reflects our unchanged expectation that B&M UK will operate with an adjusted EBITDA¹ (pre-IFRS 16) margin of between 12-13%.

We have consciously built our Autumn/Winter stock-holding early to remove the risk of supply chain disruption. This will normalise by the end of the financial year, with inventory growth reflecting the Group's additional stores, Easter timing differences and the current two-week longer container shipping times. Partially mitigating this growth, our working capital will benefit from a normalisation of the timing of VAT payments, meaning that we expect growth in working capital for the full financial year to be no more than £50m.

We also have announced plans for B&M UK to open a new imports centre within the next twelve months.  We expect that this will require up to £20m of capital expenditure that will be split across the FY25 and FY26 financial years and will be funded within existing capital expenditure budgets, with operating cost ratios expected to be unchanged given the higher volumes being handled.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group remain those as set out on page 23 to 29 of our Annual Report and Financial Statement 2024: supply chain; competition; economic environment; regulation and compliance; international expansion; political uncertainty; IT systems, cyber security and business continuity; key management reliance and store expansion.  During the period the Group's Directors considered whether the risk exposure had changed in any of the identified areas, and whether the Group was exposed to new risks.  The Directors noted an increase in risks on supply chain given escalating global political tension and continued Red Sea disruption, and also from regulation and compliance however felt that neither of these increases materially changed the Group's risk profile.  

Mike Schmidt

Chief Financial Officer

13 November 2024

Notes:

1.    Adjusted values are considered to be appropriate to exclude unusual, non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of account. See notes 3 and 4 of the financial information for further details.

2.     Constant currency comparison involves restating the prior year Euro revenues using the same exchange rate as that used to translate the current year Euro revenues.

3.     One-year like-for-like revenues relate to the B&M UK estate only (excluding wholesale revenues) and include each store's revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY23. This 14-month approach has been adopted as it excludes the 2-month halo period which new stores experience following opening.

4.    Adjusted operating expenses on an underlying basis excludes foreign exchange, one-off income, depreciation and amortisation. This adjusted measure is considered a more meaningful metric to the users of the accounts as this is the cost base used by management to commercially monitor performance. Group non-underlying items include B&M UK's foreign exchange retranslation losses in relation to derivative adjustments of £11m (H1 FY24: £8m loss). Group adjusted operating costs, excluding depreciation and amortisation, as a % of revenues increased to 27.3% from 26.3%.

5.     References in this announcement to the B&M UK business include the B&M fascia stores in the UK except for the 'B&M Express' fascia stores. References in this announcement to the Heron Foods business include both the Heron Foods fascia and B&M Express fascia convenience stores in the UK.

6.    Please see note 3 of the financial statements for more details and reconciliation to the Consolidated statement of cash flows. Statutory Group cash generated from operations was £303m (H1 FY24: £352m). This statutory definition excludes payments for leased assets including the leasehold property estate.

7.    Net debt comprises interest bearing loans and borrowings, overdrafts and cash and cash equivalents. Net debt was £788m at the half year end (H1 FY24: £700m), reflecting £973m (H1 FY24: £924m) as the carrying value of gross debt netted against £185m of cash (H1 FY24: £224m). See note 7 of the financial information for more details.

8.     Dividends are stated as gross amounts before deduction of Luxembourg withholding tax which is currently 15%.

Condensed Consolidated Statement of Comprehensive Income

All profit and other comprehensive income is attributable to the owners of the parent.

The accompanying accounting policies and notes form an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statement of Financial Position

* The statement of financial position has been restated for September 2023 to reflect a change in the presentation of deferred tax, see note 1 for further details.

The accompanying accounting policies and notes form an integral part of this financial information. The condensed financial statements were approved by the Board of Directors on 13 November 2024 and signed on their behalf by:

A. Russo, Chief Executive Officer.