B&M European Value Retail SA (BME) AI Stock Analysis

• Market Cap: £2.74B
• Dividend Yield: 5.44%
• Average Volume (3M): 4.30M
• Price to Earnings (P/E): 8.4
• Beta (1Y): 0.82
• Revenue Growth: 6.82%
• EPS Growth: -8.24%
• Country: UK
• Employees: 40,383
• Sector: Consumer Cyclical
• Sector Strength: 54
• Industry: Discount Stores
• EPS (TTM): 0.33
• Shares Outstanding: 1,000,821,900
• 10 Day Avg. Volume: 4,482,495
• 30 Day Avg. Volume: 4,301,837
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.48
• Price to Cash Flow (P/CF): 5.50
• P/FCF Ratio: 6.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 379.50p
• Price Target Upside: 35.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

B&M European Value Retail SA shows robust financial performance with strong profitability and cash flow. However, the high debt level and current bearish technical indicators present risks. The stock's undervaluation and attractive dividend yield provide potential upside. While the earnings call reflects balanced sentiment, strategic growth plans and share buybacks suggest future opportunities.

Positive Factors

Management Confidence

Management is very comfortable and confident in the company's pricing position.

Value Investment

The shares are trading at a marked price-to-earnings discount, which might appeal to value investors.

Negative Factors

Guidance Downgrade

B&M cut its FY25 EBITDA guidance by approximately 3% due to UK like-for-like sales failing to sustain a pick-up.

Leadership Uncertainty

CEO Alex Russo intends to retire at the end of April, creating uncertainty about the company's future leadership.

Sales Performance

There is an unexplained weakness in like-for-like sales, which raises concerns about the company's performance.

B&M European Value Retail SA Business Overview & Revenue Model

Company Description

B&M European Value Retail SA (BME) is a leading variety retailer primarily operating in the United Kingdom and France. The company specializes in providing a wide range of products at competitive prices, including grocery items, household goods, homeware, DIY products, toys, electrical goods, and seasonal items. B&M aims to offer exceptional value for money by sourcing products efficiently and selling them through its extensive network of large-format stores.

How the Company Makes Money

B&M European Value Retail SA generates revenue primarily through the sale of a diverse range of consumer products in its stores. The company's revenue model is based on high-volume, low-margin sales, leveraging its large buying power to secure favorable terms with suppliers and passing those savings onto customers. B&M's key revenue streams include in-store sales from its core B&M Bargains and Heron Foods brands. The company also benefits from its ability to rapidly adapt its product mix in response to consumer demand and seasonal trends. Additionally, B&M's strategic locations and large store formats contribute to high foot traffic and efficient operations. The business does not heavily rely on online sales, which is a differentiating factor from many other retailers. Its profitability is further supported by cost-effective supply chain management and a focus on operational efficiency.

B&M European Value Retail SA Financial Statement Overview

Summary

B&M European Value Retail SA demonstrates solid revenue growth and profitability with strong gross and net margins. The high debt-to-equity ratio poses a financial leverage risk, but strong cash flow generation and improved equity position mitigate some concerns.

Income Statement

The company shows a strong gross profit margin of 37.1% and a net profit margin of 6.7% for the most recent year, indicating effective cost management and profitability. Revenue growth rate of 10.1% from the previous year highlights positive momentum in sales. However, the EBIT and EBITDA margins, at 11.1% and 15.9% respectively, suggest room for improvement in operational efficiency.

Balance Sheet

The debt-to-equity ratio is high due to significant total debt compared to stockholders' equity, indicating potential financial leverage risks. Return on equity is not calculable due to negative equity in the previous year, but recent positive equity is a positive sign. The equity ratio of 25.6% suggests moderate reliance on equity financing.

Cash Flow

Free cash flow growth rate shows a slight decline of 9.4%, but the company maintains strong operating cash flow and a healthy free cash flow to net income ratio of 1.69, indicating good cash generation and efficiency in converting earnings to cash.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
7.24B	5.48B	4.98B	4.67B	4.80B	4.75B
	Gross Profit
2.71B	2.04B	1.80B	1.75B	1.77B	1.61B
	EBIT
734.55M	608.00M	536.00M	610.00M	613.00M	414.84M
	EBITDA
842.62M	872.00M	777.00M	838.00M	824.00M	469.77M
	Net Income Common Stockholders
420.69M	367.00M	348.00M	422.00M	428.00M	112.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
96.66M	182.00M	237.00M	173.00M	218.00M	533.74M
	Total Assets
2.13B	3.63B	3.56B	3.64B	3.36B	4.45B
	Total Debt
655.11M	2.27B	2.25B	2.27B	2.03B	2.58B
	Net Debt
558.45M	2.08B	2.02B	2.09B	1.81B	2.04B
	Total Liabilities
1.05B	4.36B	4.28B	2.89B	2.63B	3.37B
	Stockholders Equity
1.06B	926.22M	-720.00M	746.00M	733.00M	1.08B
Cash Flow		Free Cash Flow
694.14M	620.00M	684.00M	391.00M	739.00M	531.40M
	Operating Cash Flow
894.08M	746.00M	782.00M	491.00M	827.00M	685.05M
	Investing Cash Flow
-165.84M	-118.00M	-87.00M	-85.00M	-70.00M	37.01M
	Financing Cash Flow
-770.77M	-680.00M	-634.00M	-450.00M	-969.00M	-291.40M

B&M European Value Retail SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 281.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BME, the sentiment is Neutral. The current price of 281.1 is above the 20-day moving average (MA) of 269.50, below the 50-day MA of 288.47, and below the 200-day MA of 357.51, indicating a neutral trend. The MACD of -6.22 indicates Negative momentum. The RSI at 49.79 is Neutral, neither overbought nor oversold. The STOCH value of 51.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:BME.

B&M European Value Retail SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WIL	75 Outperform	£328.22M	8.92	14.26%	3.09%	-8.18%	90.18%
MKS	72 Outperform	£7.21B	14.13	17.19%	0.84%	6.87%	22.36%
TSCO	71 Outperform	£22.10B	19.62	10.18%	3.62%	―	―
BME	69 Neutral	£2.74B	8.42	42.42%	5.44%	6.82%	-8.24%
SBRY	60 Neutral	£5.34B	38.95	2.25%	5.47%	2.66%	80.49%
Sector *	59 Neutral	$12.18B	11.09	-1.08%	3.77%	1.26%	-19.82%

B&M European Value Retail SA Corporate Events

B&M European Value Retail Announces Total Voting Rights Update

B&M European Value Retail S.A. has announced its total voting rights as of March 31, 2025, with an issued share capital consisting of over one billion ordinary shares. The voting rights for a small number of shares are currently suspended due to non-dematerialization by their owners, impacting the total number of voting rights available. This update is crucial for shareholders to determine their notification requirements under the Disclosure and Transparency Rules.

B&M European Value Retail Announces Change in Voting Rights

B&M European Value Retail S.A. has announced a change in its voting rights structure following a recent acquisition or disposal by the Allan & Gill Gray Foundation. The foundation’s voting rights in the company have decreased slightly from 5.0325% to 4.9812%, which may impact the company’s governance and decision-making processes. This adjustment reflects the dynamic nature of shareholder positions and could influence future strategic directions and stakeholder interests.

B&M European Value Retail to Release FY25 Trading Update

B&M European Value Retail S.A. announced it will release its post close trading update for the fiscal year ending 29 March 2025 on 15 April 2025. This announcement is significant as it will provide insights into the company’s financial performance and operational strategies, potentially impacting investor perceptions and market positioning.

B&M Retail Executives Increase Shareholdings, Signaling Confidence

B&M European Value Retail S.A. announced that Tiffany Hall, the Non-Executive Chair of the Board, and Oliver Tant, the Senior Independent Non-Executive Director, have purchased ordinary shares in the company. These transactions, conducted on the London Stock Exchange, signify confidence in the company’s market position and potential growth, reflecting positively on stakeholder sentiment.

B&M European Value Retail Announces CEO Retirement and Updates FY25 Guidance

B&M European Value Retail S.A. announced that its Group Chief Executive, Alex Russo, will retire effective April 30, 2025, and the company is in the process of selecting a new CEO. Additionally, B&M has updated its FY25 profit guidance, expecting Group adjusted EBITDA to be between £605m and £625m, reflecting current trading conditions and economic uncertainties. This transition in leadership and financial guidance is crucial for the company’s strategic direction, impacting stakeholders and potentially influencing market dynamics.

B&M European Value Retail: Change in Voting Rights Structure

B&M European Value Retail SA announced a change in its voting rights structure due to security lending activities. GIC Private Limited, based in Singapore, has increased its voting rights in the company to 5.998025%, enhancing its influence and potential decision-making power within the company. This change in holdings could impact the company’s governance and its strategic decisions moving forward.

B&M Retail’s Voting Rights Update: Capital Group Increases Stake

B&M European Value Retail S.A. announced an update on its major holdings as The Capital Group Companies, Inc., a U.S.-based investment management firm, increased its voting rights to 10.038206% in the company as of January 31, 2025. This acquisition, which was notified on February 3, 2025, signifies a strategic move by The Capital Group to strengthen its influence within B&M’s operations, potentially impacting the company’s future governance and strategic decisions.

B&M European Value Retail Adjusts Voting Rights Amid Security Lending

B&M European Value Retail SA announced a change in its voting rights structure due to security lending activities. GIC Private Limited, based in Singapore, altered its holdings, resulting in a decrease to 6.397% of total voting rights from a previous position of 7.031%. This adjustment reflects a shift in the ownership stake, potentially impacting the company’s shareholder dynamics and future decision-making processes.

Barclays PLC Acquires Major Voting Rights in B&M European Value Retail

B&M European Value Retail S.A. reported a change in its major holdings, with Barclays PLC acquiring a significant percentage of voting rights. This acquisition suggests a strategic move by Barclays, potentially impacting B&M’s governance and future operational decisions, and highlighting the importance of financial institutions in shareholder dynamics.

B&M Retail Appoints New Non-Executive Director

B&M European Value Retail S.A. announced the appointment of Euan Sutherland as a Non-Executive Director, following shareholder approval at their Ordinary General Meeting. This strategic addition to the board is expected to enhance the company’s governance and may impact its operational strategies, reinforcing its position in the competitive retail market.

B&M Retail Adjusts Voting Rights Amid Security Lending Changes

B&M European Value Retail SA has experienced a change in the nature of its holdings due to security lending, as reported by GIC Private Limited, based in Singapore. The notification indicates a new composition of voting rights, with GIC’s shareholding adjusted to reflect 7.03% of total voting rights, down from a previous position of 7.14%. This adjustment could affect the company’s governance dynamics as it involves a notable stakeholder with substantial voting influence.

B&M Retail Reports Strong Q3 Performance and Declares £151m Dividend

B&M European Value Retail S.A. announced a positive trading update for the third quarter of FY25, highlighting a 3.5% year-to-date revenue growth on a constant currency basis. The company declared a special dividend of £151 million, reflecting strong cash generation driven by increased volume momentum. B&M UK and B&M France showed robust performance, with the latter achieving a 12.5% revenue increase. The company plans to open 73 new stores in FY25 and is considering relocating its parent company’s domicile to Jersey or Ireland. The announcement underscores B&M’s strong market positioning and strategic focus on value retailing, aiming to drive volume growth and maintain high return on capital, benefiting both operations and shareholders.