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B&M Bargain’s owner B&M European Value Retail has posted double-digit first quarter growth driven by strong like-for-like growth in the UK.
Updating the market on its sales performance for the 13 weeks to 24 June, the retailer said group revenues were up 13.5% in its first quarter to £1.3bn and in line with internal expectations.
Growth was driven by “strong, profitable trading momentum” across all three of its fascias.
B&M UK first quarter like for like sales were up 9.2% to just over £1bn, with both grocery and general merchandise categories have performing well and seeing consistently strong and positive like for like transaction numbers.
B&M UK general merchandise sales participation and sell-through has been “excellent”, the company said.
Meanwhile, stock and cost disciplines remain firmly embedded across the group
The 9.2% like for like growth at B&M in the UK reversed the 9.1% drop in sales in the same quarter last year.
Its Heron Foods arm saw growth of 19.4% to £135m, while B&M France was up 29.1% to £117m.
CEO Alex Russo commented: “Our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards.
The business is well positioned as we start to transition to our autumn winter season. We will continue to work hard to help all our customers manage the cost-of-living crisis.”
B&M shares have lost 6.4% to 552.6p this morning despite the strong first quarter growth.
Morning update
Sports nutrition specialist Science in Sport has predicted a return to profitability in 2023 after soaring costs and the opening of a new supply chain facility sent it to a £10.6m loss.
For the year-ended 31 December 2022, group sales were up 2% to £63.8m.
It said sales growth was adversely impacted in the year by £4.3m due to the closure of its Russian business (£1.7m), port congestion issues in the US (£0.9m) and supply chain issues of PhD Smart Bars over the summer from its supplier (£1.7m).
An “unprecedented” increase in input costs, coupled with weakening consumer confidence, hit trading performance after the group started the year well.
The headwinds resulted in an underlying EBITDA loss of £2.7m (compared to £1.5m profit in 2021), with EBITDA at break-even in the second half.
Its total loss before tax doubled to £10.6m from £5.3m, impacted by raw material cost pressures and transition costs to the a new supply chain facility in Blackburn.
The group said these financial results were “substantially below our initial expectations”, but its mitigating actions have delivered improved margins and have led to a solid start to 2023.
It said in 2023 so far it has seen building sales momentum to record monthly revenue levels.
It expects revenue growth for the first half to be approximately 7%, with Q2 growth of approximately 12%, while will lead to positive EBITDA in the first half.
On a brand level, PhD Nutrition revenue grew by 15% to £34.1m, with strong growth in marketplace and retail channels
Science in Sport revenue reduced by 10% to £29.7m predominantly due to reduced digital revenue partially offset by growth in retail channels
CEO Stephen Moon commented: “After a good start to 2022, input price inflation, a challenging consumer environment, and supply chain issues related to global events adversely affected us. We reacted quickly and we spent the summer months restructuring our operations and cost base. In addition, we successfully commissioned our world-class Blackburn supply chain facility.’
“In 2023, we are well set for profitable growth, as evidenced by sales growth over the last four months. Our retail business, domestically and internationally, is delivering profitable growth, and our Amazon business is performing significantly above the same period last year . A new partnership in the USA has step-changed EBITDA performance in this channel.
“Our brands are healthy, and the innovation pipeline is strong. With improved margins in all channels and markets and building revenue momentum, we are confident of executing our 2023 plan.”
Elsewhere, logistics firm DX Group has agreed to acquire over 15 UK sites that were previously operated by Tuffnells Parcels Express, which went into administration earlier this month.
DX has signed an agreement with Interpath Advisory, the administrator of Tuffnells, for an initial licence-to-occupy 13 former Tuffnells sites and agreed terms to purchase for £1m cash the freehold of a further site.
The company has also agreed terms directly with a landlord for a long lease over a fifteenth site.
As a result, DX has hired over 250 former employees of Tuffnells since the administrator was appointed.
It has also taken on over 550 customers on mutually agreeable commercial terms.
The group said that the acquisitions “provide a significant opportunity” for both its divisions, DX Freight and DX Express.
CEO Paul Ibbetson commented: “We are very pleased to have reached agreement over 15 former Tuffnells sites, including the outright purchase of a freehold site. This exciting development gives us significant additional capacity and will enable us to accelerate growth while also driving further operational efficiencies and maintaining our high service levels, which is critically important.
“We have already taken on a significant number of former Tuffnells employees and look forward to providing further employment opportunities.”
On the markets this morning, the FTSE 100 is down 0.2% to 7,485.1pts.
Early fallers include Science in Sport, down 3.3% to 14.5p, Greencore, down 2% to 71.8p and Reckitt Benckiser, down 1% to 5,862p.
Risers so far include Just Eat Takeaway.com, up 1.9% to 1,229p, Hilton Food Group, up 1.8% to 641p and Kerry Group, up 1.2% to €88.34.
Yesterday in the City
The FTSE 100 closed the day up 0.1% to 7,461.5pts.
Ocado shares fell yesterday – down by double digits at one point – on a media report suggesting Amazon was not interested in a takeover of the company. However, the shares rebounded towards the end of the day to end the session 5% down to 529.8p.
Elsewhere, Just Eat Takeaway.com continued its strong momentum this week, rising a further 4.1% to 1,206p, while Sainsbury’s continued to gain, climbing 2.6% to 271.6p.
B&M European Value Retail was up 1.6% to 590.6p ahead of this morning’s trading update.
Elsewhere, online wine retailers Virgin Wines and Naked Wines both fell, down 8.1% to 28.5p and 3.7% to 95p respectively.
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