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B&M European Value Retail SA (GB:BME)
:BME
UK Market

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

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GBB&M European Value Retail SA
(LSE:BME)
67Neutral
B&M European Value Retail SA's overall stock score reflects strong financial performance and attractive valuation, countered by technical indicators pointing to a bearish trend. While the company's recent earnings call and corporate events signal confidence and strategic growth, challenges in sales and cost management present risks.
Positive Factors
Financial Performance
A strong gross margin and profit performance in the UK.
Valuation
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 (BME) vs. S&P 500 (SPY)

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

Company DescriptionB&M European Value Retail SA is a U.K.-based company that is principally engaged in operating discount retail stores across the United Kingdom and Germany. The company provides a broad range of merchandise, including food, alcohol, housewares, home textiles, small electrical goods, DIY products, garden-related products, grocery, fast-moving consumer goods, and more. The company operates B&M stores in the United Kingdom and Jawoll stores in Germany. The stores in the United Kingdom account for the majority of the company's total stores.
How the Company Makes MoneyB&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
Income Statement
Balance Sheet
Cash Flow
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
7.24B5.48B4.98B4.67B4.80B4.75B
Gross Profit
2.71B2.04B1.80B1.75B1.77B1.61B
EBIT
734.55M608.00M536.00M610.00M613.00M414.84M
EBITDA
842.62M872.00M777.00M838.00M824.00M469.77M
Net Income Common Stockholders
420.69M367.00M348.00M422.00M428.00M112.22M
Balance SheetCash, Cash Equivalents and Short-Term Investments
182.00M182.00M237.00M173.00M218.00M533.74M
Total Assets
3.63B3.63B3.56B3.64B3.36B4.45B
Total Debt
2.27B2.27B2.25B2.27B2.03B2.58B
Net Debt
2.08B2.08B2.02B2.09B1.81B2.04B
Total Liabilities
4.36B4.36B4.28B2.89B2.63B3.37B
Stockholders Equity
926.22M926.22M-720.00M746.00M733.00M1.08B
Cash FlowFree Cash Flow
694.14M620.00M684.00M391.00M739.00M531.40M
Operating Cash Flow
894.08M746.00M782.00M491.00M827.00M685.05M
Investing Cash Flow
-165.84M-118.00M-87.00M-85.00M-70.00M37.01M
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
Negative
Last Price255.90
Price Trends
50DMA
314.08
Negative
100DMA
334.20
Negative
200DMA
379.16
Negative
Market Momentum
MACD
-13.70
Positive
RSI
16.59
Positive
STOCH
24.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BME, the sentiment is Negative. The current price of 255.9 is below the 20-day moving average (MA) of 297.52, below the 50-day MA of 314.08, and below the 200-day MA of 379.16, indicating a bearish trend. The MACD of -13.70 indicates Positive momentum. The RSI at 16.59 is Positive, neither overbought nor oversold. The STOCH value of 24.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BME.

B&M European Value Retail SA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
£26.03B23.1110.18%3.31%
GBWIL
72
Outperform
£305.79M8.2835.74%3.23%-8.18%90.18%
GBMKS
70
Outperform
£7.60B14.9015.23%0.82%6.87%22.36%
GBBME
67
Neutral
£2.57B7.8739.62%5.57%6.82%-8.24%
64
Neutral
£5.77B42.231.99%5.17%2.66%80.49%
60
Neutral
$13.01B10.450.79%3.53%1.60%-22.47%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BME
B&M European Value Retail SA
255.90
-247.46
-49.16%
GB:MKS
Marks and Spencer
376.00
137.41
57.59%
GB:SBRY
J Sainsbury plc
250.00
12.94
5.46%
GB:TSCO
Tesco plc
388.70
118.93
44.09%
GB:WIL
Wilmington
340.00
-8.86
-2.54%
GB:HOME
Home REIT PLC
11.00
-27.05
-71.09%

B&M European Value Retail SA Earnings Call Summary

Earnings Call Date: Nov 14, 2024 | % Change Since: -28.18% | Next Earnings Date: May 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong EBITDA growth, increased dividends, significant market share gains in general merchandise, expansion in France, and a disciplined approach to new store openings. However, the company faced challenges with negative like-for-like sales, declining EPS, increased operating costs, and FMCG pricing pressures. The sentiment is balanced with significant positives mitigated by notable challenges.
Highlights
Group Adjusted EBITDA Growth
Group adjusted EBITDA reached GBP 274 million, marking a 2% increase over the year, demonstrating business discipline in buying, selling, and cost control.
Interim Dividend Increase
The interim dividend was increased to 5.3p, up 3.9% for the half, indicating stronger dividend payouts.
General Merchandise Market Share
Total sales in Home grew by 10% in Q2, with volumes increasing by 20%, suggesting a significant gain in market share.
Expansion in France
Plans to open more than 11 stores in France next year, with a double-digit growth in transactions and sales volume.
Strong Cash Returns
GBP 1.9 billion returned to shareholders since 2020, with share buybacks underway.
New Store Openings
45 new stores to be opened in the current year, with a disciplined approach to expansion.
Volume-Driven Growth Strategy
Emphasis on driving profit through volume growth, with a stable or growing ordinary dividend policy.
Lowlights
Negative Like-for-Like Sales
Like-for-like sales were negative at -3.6%, reflecting challenges such as weather impacts and consumer environment.
Adjusted Diluted EPS Decline
Adjusted diluted EPS decreased to 14.7p, linked to higher interest charges and a larger asset base from store openings.
Cost Increases
Operating costs increased, driven by new store expansions and national living wage increases, although mitigated by enhanced productivity.
Challenges in FMCG Pricing
FMCG pricing is described as flat to slightly negative, indicating challenges in price management in comparison to competition.
Company Guidance
During the call, B&M provided comprehensive guidance with several key metrics. For the first half of the fiscal year 2025, group adjusted EBITDA increased by 2% to GBP 274 million, reflecting strong discipline in cost control and sales strategies. The interim dividend rose by 3.9% to 5.3p. Total sales in the Home category grew by 10% in Q2, with volume up 20%, indicating a significant market share gain. Over five years, the top line has grown by 40%, with a matching 40% increase in containers from China, highlighting a focus on volume rather than inflation. The company aims for full-year EBITDA between GBP 620 million and GBP 660 million, with an emphasis on opening 45 new stores in the UK and expanding in France. Net debt stands at 1.2x, within the target range, showcasing financial resilience. Share buybacks are planned as part of the capital return strategy.

B&M European Value Retail SA Corporate Events

Other
B&M Retail Executives Increase Shareholdings, Signaling Confidence
Positive
Feb 27, 2025

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.

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
B&M European Value Retail Announces CEO Retirement and Updates FY25 Guidance
Neutral
Feb 24, 2025

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.

Business Operations and StrategyRegulatory Filings and Compliance
B&M European Value Retail: Change in Voting Rights Structure
Neutral
Feb 19, 2025

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.

Business Operations and StrategyRegulatory Filings and Compliance
B&M Retail’s Voting Rights Update: Capital Group Increases Stake
Neutral
Feb 7, 2025

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.

Business Operations and StrategyRegulatory Filings and Compliance
B&M European Value Retail Adjusts Voting Rights Amid Security Lending
Neutral
Jan 30, 2025

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.

Business Operations and StrategyRegulatory Filings and Compliance
Barclays PLC Acquires Major Voting Rights in B&M European Value Retail
Neutral
Jan 24, 2025

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.

Executive/Board ChangesShareholder Meetings
B&M Retail Appoints New Non-Executive Director
Neutral
Jan 20, 2025

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
Jan 13, 2025

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
Jan 9, 2025

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.

B&M European Value Retail S.A. Announces General Meeting to Appoint New Director
Dec 18, 2024

B&M European Value Retail S.A. has announced an Ordinary General Meeting scheduled for January 20, 2025, to consider the appointment of Euan Sutherland as an Independent Non-Executive Director. Sutherland, with over 30 years of experience in consumer goods and retail, is set to bring substantial expertise to the board, pending shareholder approval. His appointment is expected to strengthen the company’s governance and strategic oversight, potentially enhancing its market position and operational efficiency.

B&M European Value Retail Appoints Euan Sutherland as Non-Executive Director
Dec 17, 2024

B&M European Value Retail S.A. has announced the appointment of Euan Sutherland as a Non-Executive Director, subject to shareholder approval. Sutherland, who brings over 30 years of experience in consumer goods and retail, is expected to contribute to the company’s growth and enhance its business model as it aims to expand its presence in Europe.

B&M Retail to Release Q3 Trading Statement in January
Dec 10, 2024

B&M European Value Retail S.A. has announced that it will release its Q3 Trading Statement for fiscal year 2025 on January 9th, 2025. The announcement will be followed by a conference call with CEO Alex Russo, providing insights for analysts and investors. This event offers a valuable opportunity for stakeholders to gauge the company’s performance and strategic direction.

B&M Executive Invests in Company Shares
Dec 9, 2024

B&M European Value Retail’s Senior Independent Non-Executive Director, Oliver Tant, has made a significant investment by purchasing 12,500 ordinary shares at £3.613 each, totaling £45,162.50. This transaction, conducted on the London Stock Exchange, signals confidence in the company’s future performance and could be of interest to investors tracking insider activities.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.