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5 June 2024
FY24 Preliminary Results
Announcement
Volume driving profitable
growth
B&M European Value Retail S.A.
("the Group"), the UK's leading variety goods value retailer, today
announces its Preliminary Results for the 53 weeks financial
reporting period to 30 March 2024 ("FY24"). The comparative
reporting period is for the 52 weeks ended 25 March 2023
("FY23").
Highlights
Fascia
Performance1
|
Revenue growth
%
|
Adjusted EBITDA2
(pre-IFRS 16) margin %
|
Adjusted operating
profit2 margin %
|
FY24
|
FY23
|
FY24
|
FY23
|
FY24
|
FY23
|
B&M
UK
|
8.5%
|
4.0%
|
12.6%
|
12.4%
|
12.4%
|
12.3%
|
B&M
France
|
19.2%
|
22.1%
|
9.1%
|
9.6%
|
9.5%
|
8.8%
|
Heron
Foods
|
15.3%
|
18.1%
|
6.4%
|
6.1%
|
4.9%
|
3.8%
|
·
|
Group revenues increased by 10.1%
to £5.5bn (+10.1% constant currency3), or 7.8% excluding
the 53rd week
|
·
|
All fascias delivering volume
growth through both positive like-for-like4 ("LFL")
customer transaction numbers and new space growth
|
·
|
Group adjusted EBITDA2
(pre-IFRS 16) of £629m and margin of 11.5% (FY23: 11.5%) is a 9.7%
increase year-on-year and is at the top end of the Group's guidance
range of £620m-£630m
|
·
|
Group adjusted operating
profit2 increased 10.9% to £614m (FY23: £554m), with
volume driven profit growth and strong cost control across the
three businesses
|
·
|
Strong post-tax free cash
flow5 of £382m (FY23: £464m) with a disciplined approach
to inventory management - Group inventory of £776m (FY23:
£764m)
|
·
|
Statutory operating profit of
£607m (FY23: £536m) and statutory profit before tax of £498m (FY23:
£436m)
|
·
|
Opened 78 gross new stores across
the Group (47 in B&M UK, 20 in Heron Foods and 11 in B&M
France)
|
·
|
Net debt6 to adjusted
EBITDA2 (pre-IFRS 16) leverage ratio of 1.2x (FY23:
1.3x). Net debt including leases7 to adjusted EBITDA
(post-IFRS 16) 2.4x (FY24: 2.5x)
|
·
|
Recommended final
dividend8 of 9.6p per ordinary share, bringing the full
year dividend to 14.7p per share in addition to the 20.0p special
dividend8 paid in January 2024 (FY23: 20.0p)
|
Alex Russo, Chief Executive, said,
"FY24 has been another good year
for B&M. The three key components of our business - buying,
logistics and retail, are working in balance and we continue to
deliver excellent products at everyday low prices to our consumers.
We are well set for the years ahead.
During Q4, we accelerated our
opening programme, and the step up in openings is continuing. In
FY25, we will open not less than 45 gross new B&M stores in the
UK, plus a meaningful number in France and for Heron. We have also
raised our long-term store target to not less than 1,200 B&M UK
stores, which provides a clear runway of profitable growth ahead
for us, from our current base of 741 B&M UK stores.
We have demonstrated strong
volume-led momentum in our business throughout our trading history
and that has continued, driving our profits ahead of both pandemic
and pre-pandemic benchmarks. Despite the more challenging
comparatives, with continued new store openings, and a laser focus
on low prices and best in class retail standards, we remain
confident in our outlook for cash generation and profit
growth."
Financial results
|
FY24
|
FY23
|
Change
|
Total Group revenue
|
£5,484m
|
£4,983m
|
10.1%
|
Group adjusted EBITDA2 (pre-IFRS
16)
|
£629m
|
£573m
|
9.7%
|
Group adjusted EBITDA2 (pre-IFRS 16) margin
%
|
11.5%
|
11.5%
|
(3) bps
|
Group adjusted operating profit2
|
£614m
|
£554m
|
10.9%
|
Group statutory operating
profit
|
£608m
|
£536m
|
13.6%
|
Group statutory operating profit margin %
|
11.1%
|
10.7%
|
34 bps
|
Group cash generated from
operations
|
£862m
|
£866m
|
(0.4)%
|
Group post-tax free cash
flow5
|
£382m
|
£464m
|
(17.8)%
|
Group statutory profit before
tax
|
£498m
|
£436m
|
14.1%
|
Adjusted (pre-IFRS 16) diluted
EPS2
|
36.8p
|
36.5p
|
0.9%
|
Statutory diluted EPS
|
36.5p
|
34.7p
|
5.2%
|
Net debt6
|
737m
|
724m
|
1.8%
|
Net debt including
leases7
|
2,094m
|
2,025m
|
3.2%
|
Ordinary
dividends8
|
14.7p
|
14.6p
|
0.7%
|
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
accounts. See notes 2, 3 and 4 of the financial statements 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 are based on either 53 week vs. 53 week or 14 week vs. 14 week
comparison periods. They 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.
5. Post-tax free cash flow is an
Alternative Performance Measure. 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 £862m (FY23: £866m). This statutory
definition excludes payments for leased assets including the
leasehold property estate.
6. Net debt comprises
interest-bearing loans and borrowings, and cash and cash
equivalents. Net debt was £737m at the period end, reflecting £919m
as the value of gross debt netted against £182m of cash. See
notes 18, 21 and 28 of the financial statements for more
details.
7. Net debt including lease
liabilities is the above plus the current and non-current lease
liabilities recorded on the Consolidated statement of financial
position.
8. Dividends are stated as gross
amounts before deduction of Luxembourg withholding tax which is
currently 15%.
Results Presentation
An in-person presentation for
analysts in relation to these FY24 Preliminary Results will be held
today at 09:30 am (UK) at Bank of America Merrill Lynch, 2 King
Edward St, London EC1A 1HQ. 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)
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 741 stores in the UK operating under the
"B&M" brand, 335 stores under the "Heron Foods" and "B&M
Express" brands, and 124 stores in France also operating under the
"B&M" brand as at 30 March 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
This has been a good year for the
Group and is an inflection point for our store opening programme.
We have delivered a record Group adjusted EBITDA1
(pre-IFRS 16) of £629m at a margin of 11.5%. This has been driven
by a record year of revenues of £5.5bn, up 10.1%. Critically we
have also maintained our discipline on ensuring growth translates
into cash, with a further £348m declared as ordinary and special
dividends, bringing the cumulative total of cash returns paid over
the four years FY21-FY24 to £1.8bn2. With a significant
acceleration in openings in our final quarter, and not less than 90
B&M UK store openings in the next two financial years, the
future is exciting.
Core to our strategy and financial
performance has been our relentless focus on price integrity (EDLP)
and high retail standards. Additional revenues were driven by
our like-for-like3 ("LFL") growth of 3.7% in our core UK
business and by our new store openings that saw 47 gross new
B&M stores open in the UK, 11 in France and 20 in Heron.
Importantly, almost half of the B&M openings in the UK were in
the fourth quarter, meaning the majority of the benefits to sales,
cash and profits will be felt in the current financial year. The
quality of our LFL3 growth remains high, being driven by
higher volumes and positive customer transactions. This is a result
of our price position, our merchandising optimisation and our
operational standards. The progress in our LFL3 sales
comes alongside the strong performance of our new store openings
that are generating accretive sales densities.
Whilst FY24 was a good year, we are
excited by the future. We will deliver our stated plans for new
store growth, driving sub 12 month cash paybacks. We will maintain
our operational execution discipline in existing stores. We will
remain everyday low price and that means a focus on everyday low
costs ("EDLC") as we continue to mitigate inflation and protect our
customers wallets.
Store opening programme supports future
growth
During the financial year we
announced a new, long-term store target of not less than 1,200
B&M UK stores, a significant increase from the 950 we had
guided to previously. With just 741 stores currently, we have many
more years of profitable, cash generating growth ahead.
Alongside this update to our
long-term target, we also announced an acceleration in our
short-term opening programme, to at least 45 stores per annum over
a three-year period. During FY24, the first year of this programme,
we have opened 47 stores. Net of a small number of
closures/replacements, we finished the year with 741 stores, an
increase in store numbers of c.5% versus the start of the
year.
The acceleration in our openings is
under-pinned by the acquisition of up to 51 stores from Wilko. We
moved rapidly as we carefully selected the stores we wanted,
renegotiated leases and are now opening these stores at speed. Many
of these stores are in new areas for B&M or are in catchments
where we are under-represented. Of the 25 B&M UK stores we
opened in the fourth quarter of FY24, 21 were former Wilko stores,
and I am pleased to report that these stores, in common with other
new stores, are delivering strong sales densities. We intend to
maintain our momentum and in the first quarter of FY25, also expect
to open between 15 to 20 B&M UK stores, many of which will be
former Wilko stores.
The positive impact of the opening
programme should be noted. A new store's sales represent 100%
volume growth, so over the next three years, this opening programme
will generate substantial additional volume. LFL3 volume
growth will continue to increase total volume growth
further.
LFL3 sales growth will augment new store sales
growth
Although our B&M UK fascia
growth is pivoting to a higher proportion of total volume growth
being driven by new stores, this is not at the expense of our
LFL3 growth performance. LFL3 sales, from
share gain and market growth are expected to contribute to total
volume growth going forward, as they always have. We will maintain
and improve availability and operational disciplines and we will
reward our local store managers for retail excellence and hard work
through our management incentive programmes. Our store managers and
team are responding exceptionally well.
We will remain highly disciplined
in making sure our existing and new stores are as good as they can
be, with industry leading standards and pricing. Total volume
growth will help ensure we continue to drive substantial profit
growth and increased cash generation, and that volume growth will
be driven by new and existing stores. The combined benefit of these
two channels of volume growth is considerable.
Industry leading volume growth with disciplined cost
control
Our sustained volume growth is
improving our relationships with FMCG branded suppliers by
reinforcing our position as the fastest growing major customer for
many. It is also improving further our relationships with suppliers
in the Far East (where there is excess capacity) and this is
helping drive increased productivity as we increase our volume
through a broadly unchanged infrastructure.
Value creation in retail requires
not only growing volume but also control of the underlying cost
base. Despite industry-wide cost headwinds, we work to deliver on
this fundamental aspect every day. We have faced challenges from
increases in the minimum wage and energy costs. But through our
volume gains, delivered by strong LFL3 growth and
through new store openings, we have been able to weather these
pressures and deliver a step change in our adjusted
EBITDA1 (pre-IFRS 16) margin compared to pre-pandemic
levels. Once again, I reiterate our long-term margin guidance,
which is to deliver adjusted EBITDA1 (pre-IFRS 16)
margin for B&M UK between 12-13%, for B&M France to grow
over time above 10% and for Heron to stay above 6%.
Strategic actions underpin gross margin gains, while pricing
remains market leading
The step change in the adjusted
EBITDA1 margin has been achieved by substantial sales
growth (over 40% higher sales compared to 2020), through strict
cost control (head office size and distribution capacity are
largely unchanged) and through a managed increase in our gross
margin as the business has grown and evolved. Importantly, this
improvement in the gross and adjusted EBITDA1 margin has
been delivered against a strong and improved price
position.
Our gross margin has improved due
to better buying prices and mix benefit. Key driving factors
include better store execution that captures incremental
margin-accretive product sales without increasing store costs. Our
range evolution and exiting categories such as big-ticket furniture
and frozen food, improves both sales densities and gross profit.
We also leverage our market-leading volume growth in branded
FMCG products and Far East sourced General Merchandise. These
changes underpin the long-term EBITDA position.
France offers very significant potential
Our French business has operational
momentum and we will continue to grow it in a disciplined way,
driving increased sales densities. Once again France delivered
strong LFL3 growth, the number of openings increased and
delivered an adjusted EBITDA1 (pre-IFRS 16) margin of
9.1%.
Moving forward, we will continue to
deliver incremental volume growth from the twin channels of new and
existing stores. We will increase the rate of openings in a
disciplined way and will increase the FMCG range which will drive
footfall and LFL3 sales growth further. Over the medium
term, we expect the adjusted EBITDA1 (pre-IFRS 16)
margin to reach at least 10% and we will grow revenues with
discipline.
The potential for store openings in
France remains very high. France has a similar sized population to
the UK, where we have targeted at least 1,200 stores. The long-term
number of stores in France remains a multiple of the 124 stores we
operate today.
Heron Foods contributes well to the Group
Heron is our discount convenience
format business and although it is a small business, with just
£560m turnover, its adjusted EBITDA1 (pre-IFRS 16)
margin is sector leading. Heron's success is built upon
differentiated sourcing, strict cost control, targeted store
footprints and excellent retailing and logistics skills. There is
cross fertilisation between Heron and our other businesses, which
helps us optimise our sales densities across the Group.
We will continue to open around 20
Heron stores per year to deliver growth from this programme as well
as our existing estate.
Competitive position
The retail industry remains
challenged by regulatory and macro pressures. In the last 12 months
a number of retailers have failed and a significant number of
others have issued one or more profit warnings. In this context, we
delivered increased profits and cash generation, and have this year
exceeded our "lockdown" peak of £626m adjusted EBITDA1
(pre-IFRS 16). There are very few companies which were "lockdown
winners" and who have sustained their competitive progress
post-pandemic. In FY20, our adjusted EBITDA1 (pre-IFRS
16) was £342m compared to £629m in FY24. In the last five years, we
have delivered 83.9% Group adjusted EBITDA1 earnings
growth - equivalent to an annual compound earnings growth of over
12%. On top of this between FY21 to FY24 we have returned
£1.8bn of cash to our shareholders. If shareholders had reinvested
those dividends in our shares at the time the dividends were
returned, they would have seen the equivalent of an annual compound
earnings growth of over 17%.
The success of our new stores, our
continued volume growth and improved sales densities show that we
are as competitive as ever and we have plenty of runway ahead. The
growth of discounting is a global trend and we remain a roll-out
opportunity into structural change. We will continue to take sales
and market share, but we will only ever do so in a disciplined and
profitable manner.
Over the medium and longer term,
future volume gains will help insulate us against cost pressures in
a way that most of our competition do not possess. We remain a
compounding, profitable, cash generating business with a platform
for future growth.
A
thank you to our Chairman, the management team and to all
colleagues
Later this year we will see our
Chairman, Peter Bamford, retire after six years. He has chaired the
Group through some of the most uncertain times in recent history
and has overseen the transition from a founding CEO to me. He has
done this with an unerring view of what is right for all our
stakeholders. I wish to thank him for his unwavering support and
guidance on both a personal and professional basis. I wish Peter
all the very best for the future, I have thoroughly enjoyed working
with him.
I would also like to extend my
thanks to the broader management team and to all of our colleagues.
We have again delivered high quality results in a tough retail
market. We have been able to deliver these results thanks to the
hard work of the team - everyone from the shop floor
upwards.
Alex Russo
Chief Executive Officer
4 June 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 accounts. See notes 2, 3 and 4 of the financial
statements for further details.
2. Based on ordinary
and special dividends paid in the years FY21 to FY24.
3. One-year
like-for-like revenues relate to the B&M UK estate only
(excluding wholesale revenues) and are based on either 53 week vs.
53 week or 14 week vs. 14 week comparison periods. They 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.
Financial review
New and existing stores driving volume
growth
Group financial performance
£'m
|
FY24
|
FY23
|
YoY Change
|
Revenue
|
5,484
|
4,983
|
10.1%
|
Adjusted EBITDA1 (pre-IFRS 16)
|
629
|
573
|
9.7%
|
%
|
11.5%
|
11.5%
|
(3)
bps
|
Depreciation and amortisation
(pre-IFRS 16)
|
(82)
|
(76)
|
6.9%
|
Operating profit impact of IFRS
16*
|
67
|
57
|
17.0%
|
Adjusted operating profit1
|
614
|
554
|
10.9%
|
Adjusting
items1
|
(7)
|
(19)
|
(63.3)%
|
Statutory profit before interest and tax
|
607
|
535
|
13.5%
|
Finance costs relating to
right-of-use assets
|
(69)
|
(61)
|
13.8%
|
Other net finance costs
|
(40)
|
(38)
|
3.3%
|
Statutory profit before tax
|
498
|
436
|
14.1%
|
*includes depreciation on
right-of-use assets of £176m - FY24 total depreciation &
amortisation was £258m (FY23: £242m)
The current accounting period
represents the 53 weeks trading to 30 March 2024 ("FY24") and the
comparative period represents the 52 weeks to 25 March 2023
("FY23").
Group revenues in FY24 increased by
10.1% year-on-year ("YoY"), (+10.1% on a constant currency
basis2), driven by volume growth and positive
like-for-like3 ("LFL") performance across the three
businesses.
The extra week in the FY24 trading
period relative to FY23 added 2.3% to Group revenue growth YoY
whilst also benefitting from higher trading due to the early Easter
timing. This seasonal Easter trading benefit will not occur in FY25
as a result.
Group adjusted EBITDA1
(pre-IFRS 16) increased by 9.7% to £629m (FY23: £573m),
representing a margin of 11.5% (FY23: 11.5%). This reflects
volume led revenue growth, with the cost leverage and productivity
gains of higher transaction numbers helping reduce cost-to-sell
percentages. Group adjusted operating costs on an underlying
basis1,6 decreased as a % of revenues from 25.5% to
25.4%.
Group adjusted operating
profit1 increased by 10.9% moving in line with the
above. We have continued to invest in our store estate and have 60
net more stores across the Group, as such total depreciation and
amortisation increased by 6.4%.
The extra week added £13m to Group
adjusted EBITDA1 (pre-IFRS 16) and £12m to Group
adjusted operating profit1.
Fascia overview
B&M UK
In the B&M UK
fascia4 business, total revenues
increased by 8.5% to £4,410m (FY23: £4,067m), with LFL3
revenues up 3.7%. This was underpinned by volume growth driven from
our new store opening programme and positive LFL customer
transactions.
LFL3 revenues grew in
every quarter YoY. The first half of the year saw LFL revenues up
6.2%, split between 9.2% in Q1 and 3.1% in Q2. Against relatively
more challenging comparatives, LFL revenues maintained their
positive trend across the second half seeing 0.6% growth in Q3 and
2.9% in Q4. We are pleased to see an increase in LFL3
customer transaction numbers and our sales participation between
FMCG and General Merchandise remains balanced and in line with our
expectations.
B&M UK LFL3 revenue
reconciliation
£m
|
2024
|
2023
|
1-year
Change
|
Like-for-like3 revenue
(53 weeks basis)
|
4,843
|
4,672
|
3.7%
|
LFL3 sales recorded in
week 1 of FY24
|
-
|
(85)
|
|
Online trial
|
-
|
6
|
|
New stores after Mar 25
2023
|
140
|
-
|
|
New stores prior Mar 25
2023
|
133
|
53
|
|
Closed stores
|
1
|
59
|
|
Gross Segment Revenue
|
5,117
|
4,705
|
|
VAT/Commission income
|
(737)
|
(675)
|
|
Wholesale revenues
|
30
|
37
|
|
B&M UK Revenue
|
4,410
|
4,067
|
8.5%
|
There were 47 gross new store
openings in the year. More than half of our store openings came in
the fourth quarter, with 21 of these being former Wilko stores.
We are pleased with the early performance of these stores
along with all other new store openings in the year.
B&M UK revenues also included
£30m of wholesale revenues (FY23: £37m). The majority of
wholesale sales are to our associate Centz Retail Holdings Limited,
a chain of 53 variety goods stores in the Republic of Ireland, which
increased its proportion of FMCG sourcing from within the EU
market.
Our trading gross
margin5 rose 46 bps year-on-year to 36.3% from 35.8%.
This reflected a reduction in freight rates and strong
sell-through across both FMCG and General Merchandise, resulting in
largely only planned markdown activity this year. Statutory gross
margin increased 120 bps to 36.9% from 35.7%, benefitting from
favourable foreign exchange hedge accounting in the current year
and non-recurring storage costs recorded in the
comparative.
Adjusted operating costs on an
underlying basis1,6 were well controlled representing
24.0% of revenues compared to 24.4% in the prior year. Given the
9.7% increase in the national living wage hourly rate that was
absorbed in the period, this reduction in our cost to sell
percentage reflects cost leverage and productivity gains from sales
volume growth, together with a continued focus on cost
discipline.
We are an everyday low-cost
retailer that operates with a low fixed cost base and double digit
adjusted operating profit margins. This operating model allows us
to benefit materially from volume growth from either new store
openings or like-for-like3 trading. It is total
volume growth that leverages our central cost base, offsetting
inflationary impacts, and results in an increase in operating
profits at the sustainable 12-13% adjusted EBITDA1 and
adjusted operating profit1 margins that we consistently
guide to.
Adjusted EBITDA1
(pre-IFRS 16) increased by 10.5% to £556m (FY23: £503m), with
margin increasing by 23 bps to 12.6% (FY23: 12.4%) and
demonstrating the benefit of volume-driven revenue growth. Adjusted
operating profit1 was £548m (FY23: £498m) with a margin
of 12.4% (FY23: 12.3%).
Statutory profit before interest
and tax for the year was £548m (FY23: £498m).
B&M France
Total revenues increased by 19.2%
to £514m (FY23: £431m). The business continues to improve sales
densities - with the majority of the LFL revenue growth performance
being driven by positive customer transaction numbers.
It has been another disciplined and
controlled year of store openings with 11 gross new store openings
and one relocation. All new stores are performing in line
with or above our assumptions and continue to demonstrate the
potential for the B&M brand to trade effectively in a wide
range of geographies and formats.
Adjusted operating expenses on an
underlying basis1,6 as a % of revenues reduced from
35.9% to 35.3% reflective of cost leverage from increased sales
volumes.
Adjusted EBITDA1
(pre-IFRS 16) increased to £47m (FY23: £41m) representing an
adjusted EBITDA1 margin of 9.1% (FY23: 9.6%). This is a
64 bps increase compared to an underlying margin of 8.5% in FY23,
which excludes c.£5m of one-off government support received at the
start of the prior period, as previously reported. Adjusted
operating profit1 was £49m (FY23: £38m) with a margin of
9.5% (FY23: 8.8%).
Statutory profit before interest
and tax for the year was £49m (FY23: £38m).
Heron Foods
Total revenues grew by 15.3% to
£560m (FY23: £485m) representing another excellent year. We remain
committed to offering our customers convenient, great value and
quality products at a competitive price point. We continue to see
an increase in both LFL3 customer transactions and
basket value year-on-year.
There were 20 gross new store
openings in the year with one relocation and three closures.
Adjusted operating
expenses1 as a % of revenues reduced from 26.1% to
25.4%.
Adjusted EBITDA1
(pre-IFRS 16) increased by 21.3% to £36m (FY23: £30m), a result
that is testament to the execution and cost control demonstrated by
the Heron team. Our margin of 6.4% (FY23: 6.1%) is sector leading.
Adjusted operating profit1 was £27m (FY23: £19m) with a
margin of 4.9% (FY23: 3.8%).
Statutory profit before interest
and tax for the year was £27m (FY23: £19m).
Adjusting items and central charges
£m
|
2024
|
2023
|
Profit before interest & tax
|
607
|
535
|
Costs in relation to the
acquisition of Wilko stores
|
9
|
-
|
Online trial
|
-
|
2
|
Fair value of ineffective
derivatives
|
(2)
|
17
|
Foreign exchange on intercompany
balances
|
0
|
0
|
Adjusted operating profit1
|
614
|
554
|
Adjusting items are excluded from
our adjusted EBITDA1 (pre-IFRS 16) and adjusted
operating profit performance by virtue of their size and nature to
provide a helpful perspective of the year-on-year performance of
the Group.
Further detail on adjusting items
can be found in note 3, starting on page 120 of the financial
statements.
The growth in profit before
interest and tax has moved in line with segmental trading offset
partially by central charges within the corporate segment,
including the management retention bonus accrual for the Group
Trading Director, the Wilko acquisition costs and listing costs for
our Luxembourg corporate entity.
Net finance costs
Adjusted net finance charges1 for
the year,
excluding IFRS
16, were
£44m (FY23: £38m) due to increased rates on our
new debt facilities. This
included bank and high yield bond interest of £47m
(FY22: £38m) and amortised fees of £2m (FY23: £2m).
The interest charge relating to lease liabilities under IFRS 16 was £69m (FY23:
£61m).
Group tax
The tax charge in FY24 was £131m
(FY23: £88m), primarily reflecting an
increase in the UK corporation tax rate from 19% to 25%, effective
from 1 April 2023, as well as due to an increase in profits
year-on-year.
As a Group, we are committed to
paying the right tax in the territories in which we operate. The
B&M UK business paid taxes totalling £653m in FY24, including £234m
relating to those taxes borne directly by the
company such as corporation tax, customs duties, business rates,
employer's national insurance contributions and stamp duty and land
taxes. The balance of £419m
are taxes we collect from customers and employees
on behalf of the UK Exchequer, which includes Value Added Tax, Pay
As You Earn and employee national insurance
contributions.
Profit after
tax
and
earnings per
share
Statutory profit after tax was £367m
(FY23: £348m) and the statutory diluted earnings per share was
36.5p (FY23: 34.7p).
Adjusted profit after
tax1 (pre-IFRS 16), which is also reported to allow
investors to aid their understanding on the operating performance
of the business (see note 3 of the financial statements),
was £370m (FY23:
£366m), and the adjusted fully diluted earnings per share1 was
36.8p (FY23: 36.5p).
Capital expenditure
Group net capital expenditure7
totalled £124m
this year
(FY23: £87m).
Investment included
£59m spent on 78 gross new
stores across the Group's fascias (FY23: £33m on 42 stores) and
£27m on infrastructure projects to support the continued growth of
the business (FY23: £16m). There was also
investment of £34m on maintenance works to ensure that our existing store estate and distribution centres are appropriately
invested (FY23: £40m). There was also a net expenditure of £4m
relating to one freehold acquisition (FY23: net expenditure of
£(1)m).
Post-tax free cash flow8 and
net debt9,10
Post-tax free cash flow8
of £382m (FY23: £464m), represents a reduction YoY caused by higher
tax payments and increased capital expenditure due to the store
opening programme.
The Group continues to be highly cash generative with our inventory levels flat year-on-year despite
higher revenues. The strong performance and cash generation have
enabled the Group to pay dividends totalling £348m in FY24. This
includes a £201m special dividend paid11 in February
2024.
There has been a step change in the
revenues and profit performance of the Group since the pandemic.
During the four financial periods FY21 to FY24, we grew Group
adjusted EBITDA1 from £342m (FY20) to £629m (FY24),
generated cumulative operating cashflow of £3.3bn and distributed
£1.8bn in cash to shareholders demonstrating our consistent
disciplined approach to capital returns and shareholder value
creation.
The Board adopted a long-term
capital allocation policy in 2016 to provide a framework to help
investors understand how the Group will evaluate opportunities to
invest and
support the
growth of
the business
relative to incremental
return of capital to shareholders.
Net debt9 (excluding
IFRS 16 lease liabilities), increased to £737m (FY23: £724m). The
net debt9 to adjusted EBITDA1 (excluding IFRS
16 lease liabilities) leverage ratio was 1.2x (FY23: 1.3x). Net
debt10 (including IFRS 16 lease liabilities) was £2,094m
(FY23: £2,025m) meaning our net debt to adjusted EBITDA1
ratio was 2.4x, a decrease on the previous year (FY23:
2.5x).
Dividends
During the year, the Company
declared and paid an interim ordinary dividend of 5.1p11
per share in addition to a special dividend of 20.0p11
per share. Subject to approval by shareholders at the AGM on 23
July 2024, a final ordinary dividend of 9.6p11 per share
will be paid on 2 August 2024 to shareholders on the register of
the Company at the close of business on 28 June 2024. The
ex-dividend date will be 27 June 2024.
The Group has a dividend policy which targets an ordinary dividend pay-out ratio of between 30% to 40%
of net income on a normalised tax basis. The Group generally aims to pay the interim and final dividends for each financial year in proportions of
approximately one-third and two-thirds of the total annual ordinary
dividend respectively.
Mike Schmidt
Chief Financial Officer
4 June 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 accounts. See notes 2, 3 and 4 of the financial
statements 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 are based on either 53 week vs.
53 week or 14 week vs. 14 week comparison periods. They 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.
4. 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.
5. Trading gross
margin is considered to be a meaningful measure of profitability as
it refers to the measure of gross margin used by management to
commercially run the business. It differs to the statutory
definition for B&M, which increased 120 bps from 35.7% to
36.9%, due to technical accounting adjustments in relation to the
allocation of gains and losses from derivative accounting, storage
costs and commercial income, with the derivative adjustments the
main factor.
6. 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 losses in relation to derivative adjustments of
£12m (FY23: £40m gain) and one off income received in France at the
start of the prior year which amounted to £5m. Group adjusted
operating costs, excluding depreciation and amortisation, as a % of
revenues increased to 25.6% from 24.6%.
7. Net capital
expenditure includes the purchase of property, plant and equipment,
intangible assets and proceeds from the sale of any of those items.
These exclude IFRS 16 lease liabilities.
8. Post-tax free cash
flow is an Alternative Performance Measure. 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 £862m (FY23: £866m). This statutory definition excludes payments for leased assets
including the leasehold property estate.
9. Net debt comprises
interest-bearing loans and borrowings, and cash and cash
equivalents. Net debt was £737m at the period end, reflecting £919m
as the value of gross debt netted against £182m of cash. See
Notes 18, 21 and 28 of the financial statements for more
details.
10. Net debt including lease
liabilities is the above plus the current and non-current lease
liabilities recorded on the Consolidated statement of financial
position
11. Dividends are stated as
gross amounts before deduction of Luxembourg withholding tax which
is currently 15%.
Consolidated Statement of
Comprehensive Income
Period ended
|
|
53 weeks
ended
30 March
2024
|
52 weeks
ended
25 March
2023
|
|
Note
|
£'m
|
£'m
|
|
|
|
|
Revenue
|
2
|
5,484
|
4,983
|
|
|
|
|
Cost of sales
|
|
(3,449)
|
(3,182)
|
|
|
|
|
Gross profit
|
|
2,035
|
1,801
|
|
|
|
|
Administrative expenses
|
|
(1,427)
|
(1,265)
|
|
|
|
|
Operating profit
|
5
|
608
|
536
|
|
|
|
|
Share of losses in
associates
|
12
|
(1)
|
(1)
|
|
|
|
|
Profit on ordinary activities before net finance costs and
tax
|
|
607
|
535
|
|
|
|
|
Finance costs on lease
liabilities
|
6
|
(69)
|
(61)
|
Other finance costs
|
6
|
(50)
|
(40)
|
Finance income
|
6
|
10
|
2
|
|
|
|
|
Profit on ordinary activities before tax
|
|
498
|
436
|
|
|
|
|
Income tax expense
|
10
|
(131)
|
(88)
|
|
|
|
|
Profit for the period
|
2
|
367
|
348
|
|
|
|
|
Other comprehensive income for the period
|
|
|
|
Items which may be reclassified to
profit and loss:
|
|
|
|
Exchange differences on
retranslation of subsidiary and associate investments
|
|
(3)
|
5
|
Fair value movement as recorded in
the hedging reserve
|
|
(22)
|
28
|
Tax effect of other comprehensive
income
|
10
|
1
|
5
|
Total other comprehensive
income
|
|
(24)
|
38
|
|
|
|
|
Total comprehensive income for the period
|
|
343
|
386
|
|
|
|
|
Earnings per share
|
|
|
|
Basic earnings per share
attributable to ordinary equity holders (pence)
|
11
|
36.6
|
34.8
|
Diluted earnings per share
attributable to ordinary equity holders (pence)
|
11
|
36.5
|
34.7
|
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 consolidated financial
statements.
Consolidated Statement of Financial
Position
As at
|
|
Note
|
30 March
2024
|
Restated*
25 March
2023
|
Assets
|
|
|
£'m
|
£'m
|
Non-current
|
|
|
|
|
Goodwill
|
|
13
|
921
|
921
|
Intangible assets
|
|
13
|
121
|
120
|
Property, plant and
equipment
|
|
14
|
421
|
380
|
Right-of-use assets
|
|
15
|
1,101
|
1,056
|
Investments in associates
|
|
12
|
5
|
8
|
Other receivables
|
|
17
|
5
|
6
|
Other financial assets
|
|
20
|
1
|
-
|
Deferred tax asset
|
|
10
|
4
|
4
|
|
|
|
2,579
|
2,495
|
Current assets
|
|
|
|
|
Cash at bank and in hand
|
|
18
|
182
|
237
|
Inventories
|
|
16
|
776
|
764
|
Trade and other
receivables
|
|
17
|
76
|
52
|
Income tax receivable
|
|
|
8
|
12
|
Other financial assets
|
|
20
|
4
|
1
|
|
|
|
1,046
|
1,066
|
|
|
|
|
|
Total assets
|
|
|
3,625
|
3,561
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
|
23
|
(100)
|
(100)
|
Share premium
|
|
|
(2,481)
|
(2,478)
|
Retained earnings
|
|
|
(125)
|
(104)
|
Hedging reserve
|
|
|
10
|
3
|
Legal reserve
|
|
|
(10)
|
(10)
|
Merger reserve
|
|
|
1,979
|
1,979
|
Foreign exchange reserve
|
|
|
(7)
|
(10)
|
|
|
|
(734)
|
(720)
|
Non-current liabilities
|
|
|
|
|
Interest-bearing loans and
borrowings
|
|
21
|
(881)
|
(873)
|
Lease liabilities
|
|
15
|
(1,187)
|
(1,124)
|
Deferred tax liabilities
|
|
10
|
(25)
|
(17)
|
Other financial
liabilities
|
|
20
|
(0)
|
-
|
Provisions
|
|
22
|
(4)
|
(3)
|
|
|
|
(2,097)
|
(2,017)
|
Current liabilities
|
|
|
|
|
Interest-bearing loans and
borrowings
|
|
21
|
(29)
|
(81)
|
Trade and other payables
|
|
19
|
(572)
|
(541)
|
Lease liabilities
|
|
15
|
(170)
|
(177)
|
Other financial
liabilities
|
|
20
|
(10)
|
(13)
|
Income tax payable
|
|
|
(7)
|
(6)
|
Provisions
|
|
22
|
(6)
|
(6)
|
|
|
|
(794)
|
(824)
|
|
|
|
|
|
Total liabilities
|
|
|
(2,891)
|
(2,841)
|
|
|
|
|
|
Total equity and liabilities
|
|
|
(3,625)
|
(3,561)
|
* The statement of financial
position has been restated in 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 these consolidated financial statements.
This Consolidated statement of financial position was approved by
the Board of Directors and authorised for issue on 4 June 2024 and
signed on their behalf by:
Alejandro Russo, Chief Executive
Officer.
Consolidated Statement of Changes in
Shareholders' Equity
|
Share
capital
|
Share
premium
|
Retained
earnings
|
Hedging
reserve
|
Legal
reserve
|
Merger
reserve
|
Foreign
exchange
reserve
|
Total
equity
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
|
|
|
Balance at 26 March 2022
|
100
|
2,476
|
121
|
13
|
10
|
(1,979)
|
5
|
746
|
Allocation to legal
reserve
|
-
|
-
|
(0)
|
-
|
0
|
-
|
-
|
-
|
Ordinary dividends
declared
|
-
|
-
|
(165)
|
-
|
-
|
-
|
-
|
(165)
|
Special dividends
declared
|
-
|
-
|
(201)
|
-
|
-
|
-
|
-
|
(201)
|
Effect of share options
|
0
|
2
|
1
|
-
|
-
|
-
|
-
|
3
|
Total transactions with
owners
|
0
|
2
|
(365)
|
-
|
-
|
-
|
-
|
(363)
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
348
|
-
|
-
|
-
|
-
|
348
|
Other comprehensive
income
|
-
|
-
|
-
|
33
|
-
|
-
|
5
|
38
|
Total comprehensive income for the
period
|
-
|
-
|
348
|
33
|
-
|
-
|
5
|
386
|
|
|
|
|
|
|
|
|
|
Hedging gains & losses
reclassified as inventory
|
-
|
-
|
-
|
(49)
|
-
|
-
|
-
|
(49)
|
Balance at 25 March 2023
|
100
|
2,478
|
104
|
(3)
|
10
|
(1,979)
|
10
|
720
|
|
|
|
|
|
|
|
|
|
Ordinary dividends declared
|
-
|
-
|
(147)
|
-
|
-
|
-
|
-
|
(147)
|
Special dividends declared
|
-
|
-
|
(201)
|
-
|
-
|
-
|
-
|
(201)
|
Effect of share options
|
0
|
3
|
1
|
-
|
-
|
-
|
-
|
4
|
Total transactions with owners
|
0
|
3
|
(347)
|
-
|
-
|
-
|
-
|
(344)
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
367
|
-
|
-
|
-
|
-
|
367
|
Other comprehensive income
|
-
|
-
|
1
|
(22)
|
-
|
-
|
(3)
|
(24)
|
Total comprehensive income for the period
|
-
|
-
|
368
|
(22)
|
-
|
-
|
(3)
|
343
|
|
|
|
|
|
|
|
|
|
Hedging gains & losses reclassified as
inventory
|
-
|
-
|
-
|
15
|
-
|
-
|
-
|
15
|
Hedging gains and losses reclassified as finance
costs
|
-
|
-
|
-
|
0
|
-
|
-
|
-
|
0
|
|
|
|
|
|
|
|
|
|
Balance at 30 March 2024
|
100
|
2,481
|
125
|
(10)
|
10
|
(1,979)
|
7
|
734
|
The accompanying accounting policies
and notes form an integral part of these consolidated financial
statements.
Consolidated Statement of
Cash Flows
Period
ended
|
|
53 weeks ended 30
March
2024
|
52 weeks
ended 25 March
2023
|
|
Note
|
£'m
|
£'m
|
Cash flows from operating
activities
|
|
|
|
Cash generated from
operations
|
24
|
862
|
866
|
Income tax
paid
|
|
(116)
|
(84)
|
Net cash flows from operating
activities
|
|
746
|
782
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
Purchase of
property, plant and equipment
|
14
|
(123)
|
(93)
|
Purchase of
intangible assets
|
13
|
(3)
|
(5)
|
Proceeds from sale
of property, plant and equipment
|
|
2
|
9
|
Finance income
received
|
6
|
5
|
2
|
Dividend income
from associates
|
12
|
1
|
-
|
Net cash flows from investing
activities
|
|
(118)
|
(87)
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
Receipt of Group
revolving credit facilities
|
21
|
25
|
-
|
Repayment of old
bank loan facilities
|
21
|
(300)
|
-
|
Receipt of new bank
loan facilities
|
21
|
225
|
-
|
Repayment of
corporate bonds
|
21
|
(239)
|
-
|
Receipt due to
newly issued corporate bonds
|
21
|
250
|
-
|
Repayment of Heron
facilities
|
21
|
-
|
(3)
|
Net receipt of
French facilities
|
21
|
3
|
-
|
Repayment of the
principal in relation to lease liabilities
|
15
|
(171)
|
(168)
|
Payment of interest
in relation to right-of-use assets
|
15
|
(69)
|
(61)
|
Fees on
refinancing
|
21
|
(15)
|
-
|
Other finance costs
paid
|
6
|
(41)
|
(36)
|
Dividends paid to
owners of the parent
|
30
|
(348)
|
(366)
|
Net cash flows from financing
activities
|
|
(680)
|
(634)
|
|
|
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
|
(3)
|
3
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(55)
|
64
|
Cash and cash
equivalents at the beginning of the period
|
|
237
|
173
|
Cash and cash equivalents at
the end of the period
|
|
182
|
237
|
|
|
|
|
Cash and cash
equivalents comprise:
|
|
|
|
Cash at bank and in
hand
|
18
|
182
|
237
|
|
|
182
|
237
|
The accompanying
accounting policies and notes form an integral part of these
consolidated financial statements.
Notes to the
Consolidated Financial Statements
1
General information and basis of preparation
The consolidated financial
statements have been prepared in accordance with EU
IFRS.
The Group's trade is general
retail, with continuing trading taking place in the UK and France.
The Group has been listed on the London Stock Exchange since June
2014.
The financial statements set out
below does not constitute the Group's statutory accounts for the 53
weeks ended 30 March 2024 or 52 weeks ended 25 March 2023 but is
derived from those accounts. Statutory accounts for the 52 weeks
ended 25 March 2023 have been delivered to the Luxembourg Business
Register, and those for the 53 weeks to 30 March 2024 will be
delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified and (ii) did not
include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their reports.
Copies of full accounts will be
sent to shareholders in due course. Additional copies will be
available from our registered office at 3, rue Gabriel Lippmann,
L-5365 Luxembourg Grand-Duchy of Luxembourg
or online at www.bandmretail.com.
The consolidated financial
statements have been prepared under the historical cost convention
as modified by the revaluation of financial assets and financial
liabilities at fair value through profit or loss. The measurement
basis and principal accounting policies of the Group are set out
below and have been applied consistently throughout the
consolidated financial statements.
The consolidated financial
statements are presented in pounds sterling and all values are
rounded to the nearest million (£'m), except when otherwise
indicated.
The consolidated financial
statements cover the 53-week period from 26 March 2023 to 30 March
2024 which is a different period to the parent company standalone
accounts (from 1 April 2023 to 31 March 2024). This exception is
permitted under article 1712-12 of the Luxembourg company law of 10
August 1915, as amended, because the Directors believe
that;
· the consolidated financial statements are more informative
when they cover the same period as used by the main operating
entity, B&M Retail Ltd; and
· it would be unduly onerous to rephase the year end in that
subsidiary to match that of the parent company.
The year end for B&M Retail
Ltd, in any year, will not be more than six days prior to the
parent company year end. The next accounting period for the Group
will be a 52-week period, from 31 March 2024 to 29 March
2025.
B&M European Value Retail S.A.
(the "Company") is at the head of the Group and there is no
consolidation that takes place above the level of this
company.
The principal accounting policies
of the Group are set out below.
Restatement of the Consolidated statement of financial
position
Following the amendments made to
IAS 12 'Income Taxes' by
the IASB in the paper 'Deferred
Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12', the Group has restated
it's deferred tax balances which arise from the differences between
our statutory reporting and local tax treatment of
leases.
Under the amendments the Group is
required to separately record deferred tax assets and deferred tax
liabilities on each component of the overall balance sheet
difference, where previously the Group had reported a net position.
So, for any one lease there will be a separate deferred tax asset
relating to the difference arising from the lease liability, and a
separate deferred tax liability relating to the difference arising
from the right-of-use asset.
This has resulted in a change in
the presentation of the balances that comprise our deferred tax
asset and liability in note 10, Tax, where we break out the prior year
balance previously described as Temporary differences relating to the tax
accounting for leases at an asset value of £24m, into two
separate balances as follows;
|
|
As restated
|
|
|
£'m
|
|
|
|
Temporary differences relating to the tax
accounting for leases (asset)
|
|
93
|
Temporary differences relating to the tax
accounting for leases (liability)
|
|
(69)
|
In carrying out this review it was
also noted that under IAS 12 the Group should net deferred tax
assets and liabilities where we have a legally enforceable right to
do so and where they relate to income taxes levied by the same tax
authority. This has resulted in a restatement to our Consolidated
statement of financial position as follows;
|
As previously reported
|
As restated
|
|
£'m
|
£'m
|
|
|
|
Deferred tax asset
|
30
|
4
|
Deferred tax liability
|
(43)
|
(17)
|
As the restatement is a net-off of
the deferred tax asset and deferred tax liability position, the net
position remains unchanged. As such, there is no impact on the
Consolidated statement of comprehensive income, Consolidated
statement of changes in shareholders' equity or the Consolidated
statement of cash flows.
Basis of consolidation
The Group financial statements
consolidate the financial statements of the Company and its
subsidiary undertakings, together with the Group's share of the net
assets and results of associated undertakings, for the period from
26 March 2023 to 30 March 2024. Acquisitions of subsidiaries are
dealt with by the acquisition method of accounting. The
results of companies acquired are included in the Consolidated
statement of comprehensive income from the acquisition
date.
Control is achieved when the Group
is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee.
Specifically, the Group controls an
investee if and only if the Group has:
· power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the
investee);
· exposure, or rights, to variable returns from its involvement
with the investee; and
· the ability to use its power over the investee to affect its
returns.
When the Group has less than a
majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether
it has power over an investee, including:
· the contractual arrangements with the other vote holders of
the investee;
· rights arising from other contractual arrangements;
and
· the Group's voting rights and potential voting
rights.
The Group re-assesses whether or
not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of
control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are
included in the statement of comprehensive income from the date the
Group gains control until the date the Group ceases to control the
subsidiary, excluding the situations as outlined in the basis of
preparation.
Going concern
As a value retailer, the Group is
well placed to withstand volatility within the economic
environment. The Group's forecasts and projections, taking into
account reasonably possible changes in trading performance, show
that the Group will trade within its current banking
facilities.
In adopting the going concern basis
for preparing the financial statements, the Directors have
considered the business activities including the Group's principal
risks and uncertainties. The Board also considered the Group's
current cash position, the repayment profile of its obligations,
its financial covenants and the resilience of its 12-month cash
flow forecasts to a series of severe but plausible downside
scenarios. Having considered these factors the Board is satisfied
the Group has adequate resources to continue its successful growth
(see also the going concern and viability statements in the
'Principal risks and uncertainties' section of this annual
report).
There have been no significant post
balance sheet changes to liquidity.
Consequently, the Directors are
confident that the Group and Company will have sufficient funds to
continue to meet its liabilities as they fall due for at least 12
months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern
basis.
Revenue
Under IFRS 15 Revenue is recognised
when all the following criteria are met:
· the
parties to the contract have approved the contract;
· the
Group can identify each parties rights regarding the goods to be
transferred;
· the
Group can identify the payment terms;
· the
contract has commercial substance; and
· it is
probable that the Group will collect the consideration we are
entitled to in respect to the goods to be transferred.
In the vast majority of cases the
Group's sales are made through stores and the control of goods is
immediately transferred at the same time as the consideration is
received via our tills. Therefore, revenue is recognised at this
point.
The Group sells a small quantity of
gift vouchers for use in the future and, as such, a small amount of
deferred revenue is recognised. At the period end, the value held
on the balance sheet was <£1m (2023: <£1m).
The Group operates a small
wholesale function which recognises revenue when goods are
delivered and an invoice is raised. The revenue is considered
collectable as the Group's wholesale customers are usually related
parties to the Group (such as our associates) or are subject to
credit checks before trade takes place. See note 2 for the split of
wholesale sales to store sales.
Revenue is the total amount
receivable by the Group for goods supplied, in the ordinary course
of business, excluding VAT and trade discounts, and after deducting
returns and relevant vouchers and offers.
Administrative expenses
Administrative expenses include all
running costs of the business, except those relating to inventory
(which are expensed through cost of sales), tax, interest and other
comprehensive income. Transport and warehouse costs are included in
this caption.
Elements which are unusual and
significant, such as material restructuring costs, may be separated
as a line item.
Goodwill
Goodwill is initially measured at
cost, being the excess of the fair value of consideration
transferred over the fair value of the net identifiable assets
acquired and liabilities assumed at the date of
acquisition.
After initial recognition, goodwill
is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to the
relevant cash-generating units (CGUs) that are expected to benefit
from the combination.
The CGUs are individual stores and
the groups of CGUs are the store portfolios in each operational
segment.
Goodwill is tested for impairment
at least once per year and specifically at any time where there is
any indication that it may be impaired. Internally generated
goodwill is not recognised as an asset.
Segment reporting
Operating segments are reported in
a manner consistent with internal reporting provided to the chief
operating decision maker. The chief operating decision maker has
been identified as the Executive Directors of the Group. The
Executive Directors are responsible for assessing the performance
of the business for the purpose of making decisions about resources
to be allocated.
Alternative performance measures
The Group reports a selection of
alternative performance measures (APMs) as detailed below and in
note 3, as the Directors believe that these measures provide
additional information that is useful to the users of our
accounts.
The APMs we report in these
accounts are:
·
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
·
Adjusted EBITDA
·
Adjusted operating profit
·
Adjusted profit
·
Adjusted earnings per share (EPS)
·
Post-tax free cash flow
To aide comparability with the
figures presented in previous periods, pre-IFRS 16 versions of
these APMs have also been calculated, where appropriate.
Interest, tax, depreciation and
amortisation are as defined statutorily whilst the items we adjust
for are those we consider not to be reflective of the underlying
performance of the business as detailed in note 3. These
adjustments include the fair value and foreign exchange impact of
derivatives yet to mature, that have not been designated as part of
a hedge accounting relationship, foreign exchange on intercompany
balances, which do not relate to underlying trading, and costs
incurred in relation to significant projects, which are
non-recurring and do not relate to underlying trading.
Underlying performance has been
determined so as to align with how the Group financial performance
is monitored on an ongoing basis by management. In particular, this
reflects certain adjustments being made to consider an adjusted
operating profit measure of performance.
Adjusted finance costs reflect the
ongoing charges associated with our debt structure and exclude
one-off effects of refinancing.
The Directors believe that our
adjusted APMs provide users of the account with measures of
performance which are appropriate to the retail industry and
presented by peers and competitors. 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 an additional metric to compare periods
of account.
The APMs used are not measures of
performance or liquidity under IFRS and should not be considered in
isolation or as a substitute for measures of profit, or as an
indicator of the Group's operating performance or cash flows from
operating activities as determined in accordance with
IFRS.
Brands
Brands acquired by the business are
amortised if the corresponding agreement is specifically time
limited, or if the fair valuation exercise (carried out for brands
acquired via business combinations) identifies a fair lifespan for
the brand. This amortisation is charged to administrative
expenses.
Otherwise, brands are considered to
have an indefinite life on the basis that they form part of the
CGUs within the Group which will continue in operation
indefinitely, with no foreseeable limit to the period over which
they are expected to generate net cash inflows.
Where brands are considered to have
an indefinite life they are reviewed at least annually for
impairment or whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable.
Where the carrying value of an
asset exceeds its recoverable amount (i.e. the higher of value in
use and fair value less costs to sell), the asset is impaired
accordingly with the impairment charged to administration
expenses.
Intangible assets
Intangible assets acquired
separately, including computer software, are measured on initial
recognition at cost comprising the purchase price and any directly
attributable costs of preparing the asset for use.
Following initial recognition,
assets are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation begins when an asset is
available for use and is calculated on a straight-line basis to
allocate the cost of the asset over its estimated useful life as
follows:
Computer software acquired
-
3 or 4 years
Amortisation method, useful lives
and residual values are reviewed at each reporting date and
adjusted if appropriate.
Property, plant and equipment
Property, plant and equipment is
carried at cost less accumulated depreciation and accumulated
impairment losses.
Cost comprises purchase price and
directly attributable costs. Unless significant or incurred as part
of a refit programme, subsequent expenditure will usually be
treated as repairs or maintenance and expensed to the statement of
comprehensive income.
Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of the replaced
part is derecognised.
Depreciation
Freehold land is not depreciated.
For all other property, plant and equipment, depreciation is
calculated on a straight-line basis to allocate cost, less residual
value of the assets, over their estimated useful lives as
follows:
Leasehold buildings
-
Life of lease (max 50 years)
Freehold buildings
-
2% - 4% straight line
Plant, fixtures and equipment -
10% - 33% straight line
Motor vehicles
-
12.5% - 33% straight line
Residual values and useful lives
are reviewed annually and adjusted prospectively, if
appropriate.
An item of property, plant and
equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the
asset) is included in the statement of comprehensive income when
the asset is derecognised.
Leases
The Group applies the leasing
standard, IFRS 16, to all contracts identified as leases at their
inception, unless they are considered a short-term lease (with a
term less than a year) or where the asset is of a low underlying
value (<£5k). Assets which may fall into these categorisations
include printers, vending machines and security cameras, and the
lease expense is within administrative expenses.
The Group has lease contracts in
relation to property, equipment, fixtures & fittings and
vehicles. A contract is classified as a lease if it conveys the
right to control the use of an identified asset for a period of
time in exchange for consideration.
When a lease contract is
recognised, the business assesses the term for which we are
reasonably certain to hold that lease, and the minimum lease
payments over that term are discounted to give the initial lease
liability. The initial right-of-use asset is then recognised at the
same value, adjusted for incentives or payments made on the day
that the lease was acquired. Any variable lease costs are expensed
to administrative costs when incurred.
The date that the lease is brought
into the accounts is the date from which the lease has been
effectively agreed by both parties as evidenced by the Group's
ability to use that property.
The right-of-use asset is
subsequently depreciated on a straight-line basis over the term of
that lease, or useful life (whichever is shorter) with the charge
being made to administrative costs. The lease liability attracts
interest which is charged to finance costs, and is measured at
amortised cost using the effective interest method.
Right-of-use assets may be impaired
if, for instance, a lease becomes onerous. Impairment costs are
charged to administrative costs.
Lease modifications are recorded
where there is a change in the expected cashflows associated with a
lease, such as through a rent review. When a lease modification
occurs the lease liability is recalculated and an equivalent
adjustment is made to the right-of-use asset, unless that asset
would be reduced below zero, in which case the excess is expensed
in administrative costs. The recalculation is carried out with an
unchanged discount unless the change has affected management's
assessment of the term of the lease.
If there is a significant event,
such as the lease reaching its expiry date, the likely exercise of
a previously unrecognised break clause, or the signing of an
extension lease, the lease term is re-assessed by management as to
how long we can reasonably stay in that property, and a new lease
agreement or modification (if the change is made before the expiry
date) is recognised for the re-assessed term, with a recalculated
discount rate.
Lease modifications are also
recorded where there is a change in the expected cashflows
associated with the lease, such as through a rent review. Unless
the change affects the term, the discount rate is not recalculated.
A lease modification results in a recalculation of the lease
liability with a corresponding adjustment made to the right-of-use
asset.
The discount rate used is
individual to each lease. Where a lease contract includes an
implicit interest rate, that rate is used. In the majority of
leases this is not the case and the discount rate is taken to be
the incremental borrowing rate as related to that specific asset.
This is a calculation based upon the external market rate of
borrowing for the Group, as well as several factors specific to the
asset to be discounted.
The Group separates lease payments
between lease and non-lease components (such as service charges on
property) at the point at which the lease is recognised. Non-lease
components are charged through administrative expenses.
Sale and leaseback transactions
The Group recognises a sale and
leaseback transaction when the Group sells an asset that has been
previously recognised in property, plant and equipment, and
subsequently leases it back as part of the same or a linked
transaction.
Management use the provisions of
IFRS 15 to assess if a sale has taken place, and the provisions of
IFRS 16 to recognise the resulting lease, with the liability and
discount rate calculated in line with our lease policy and the
asset subject to an adjustment based upon the net book value of the
disposed asset, the opening lease liability, the consideration
received and the fair value of the asset on the date it was
sold.
Resulting gains or losses are
recognised in administrative expenses.
Onerous leases
A lease is considered onerous when
the economic benefits of occupying the leased properties are less
than the obligations payable under the lease.
When a lease is classified as
onerous, the right-of-use asset associated with the lease is
impaired to £nil value and non-rental costs that are likely to
accrue before the end of the contract are provided
against.
Investments in associates
Associates are those entities over
which the Group has significant influence, but which are neither
subsidiaries nor interests in joint ventures. Investments in
associates are recognised initially at cost and subsequently
accounted for using the equity method. However, any goodwill or
fair value adjustment attributable to the Group's share of
associates is included in the amount recognised as investment in
associates.
All subsequent changes to the share
of interest in the equity of the associate are recognised in the
Group's carrying amount of the investment, including a reduction in
the carrying amount equal to any dividend received. Changes
resulting from the profit or loss generated by the associate are
reported in "share of profits/(losses) of associates" in the
Consolidated statement of comprehensive income and therefore affect
net results of the Group. These changes include subsequent
depreciation, amortisation and impairment of the fair value
adjustments of assets and liabilities.
Items that have been recognised
directly in the associate's other comprehensive income are
recognised in the consolidated other comprehensive income of the
Group. However, when the Group's share of losses in an associate
equals or exceeds its interest in the associate, the Group does not
recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate. If the associate
subsequently reports profits, the investor resumes recognising its
share of those profits only after its share of the profits equals
the share of losses not recognised.
Unrealised gains on transactions
between the Group and its associates are eliminated to the extent
of the Group's interest in the associates. Unrealised losses are
also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the
consolidated financial statements of associates have been adjusted
where necessary to ensure consistency with the accounting policies
adopted by the Group.
Impairment of non-financial assets
The Group assesses at each
reporting date whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment
testing for an asset is required (for goodwill or indefinite life
assets), the Group estimates the asset's recoverable
amount.
The Group bases its impairment
calculation on detailed budgets and forecasts which are prepared
separately for each of the Group's cash-generating units (CGUs) to
which the individual assets are allocated. These budgets and
forecast calculations are prepared in December and usually cover a
period of five years. For longer periods, a long-term growth rate
is calculated and applied to the projected future cash flows after
the fifth year. The Group's three-year plan is usually approved in
March. If due to the passage of time there are significant
differences in the key assumptions between the forecast and plan,
or if management consider that the forecast has a more sensitive
level of headroom, then the impairment test will be additionally
sensitised to the plan assumptions.
Indications of impairment might
include (for goodwill and the brand assets, for instance) a
significant decrease in the like-for-like sales of established
stores, sustained negative publicity or a drop off in visits to our
website and social media accounts.
An asset's recoverable amount is
the higher of an assets or CGUs fair value less costs to sell and
its value in use. It is determined for an individual asset, unless
the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where
the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the
estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset or CGU.
Impairment losses of continuing
operations are recognised in the statement of comprehensive income
in those expense categories consistent with the function of the
impaired asset.
For assets excluding goodwill and
acquired brands with indefinite lives, an assessment is made at
each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the
assets or CGUs recoverable amount.
A previously recognised impairment
loss is reversed only if there has been a change in the assumptions
used to determine the asset's recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is
recognised in the statement of comprehensive income, except for
impairment of goodwill which is not reversed.
Inventories
Inventories are stated at the lower
of cost and net realisable value, after making due allowance for
obsolete and slow moving items, using the weighted average
method.
Stock purchased in foreign currency
is booked in at the hedge rate applicable to that stock (if
effectively hedged) or the underlying foreign currency rate on the
date that the item is brought into stock.
Net realisable value is the
estimated selling price in the ordinary course of business, less
estimated costs to sell. Transport, warehouse and distribution
costs are not included in inventory.
The Group receives supplier rebates
which are included in the cost of inventory balance (and which
therefore ultimately flow through to cost of sales). These rebates
are recognised on an accruals basis according to actual sales
levels achieved at the end of each period.
Share options
The Group operates several
equity-settled share option schemes.
The schemes have been accounted for
under the provisions of IFRS 2 and, accordingly, have been fair
valued on their inception date using appropriate methodology (the
Black Scholes and Monte Carlo models).
A cost is recorded through the
statement of comprehensive income in respect of the number of
options outstanding and the fair value of those options. A
corresponding credit is made to the retained earnings reserve and
the effect of this can be seen in the statement of changes in
equity. See note 9 for more details.
Taxation
Current income tax
Current income tax assets and
liabilities for the current period are measured at the amount
expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the reporting date,
in the countries where the Group operates and generates taxable
income. Tax is recognised in the statement of comprehensive income,
except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in
equity.
Deferred tax
Deferred tax is provided using the
liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax
liabilities are recognised for all taxable temporary differences,
except:
• when
the deferred tax liability arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or
loss.
• in
respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised
for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is highly
probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilised,
except:
• when
the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss.
• in
respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred tax
assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the
year when the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Financial instruments
The Group uses derivative financial
instruments such as forward currency contracts to reduce its
foreign currency risk, commodity price risk and interest rate risk.
Derivative financial instruments are recognised at fair
value. The fair value is derived using an internal model and
supported by valuations by third party financial
institutions.
Where a derivative financial
instrument is designated as a hedge of the variability in cash
flows of a recognised asset or liability, or a highly probable
forecast transaction, the effective part of any gain or loss on the
derivative financial instrument is recognised directly in other
comprehensive income and accumulated in the hedging reserve. Any
ineffective portion of the hedge is recognised immediately in the
statement of comprehensive income. Effectiveness of the
derivatives subject to hedge accounting is assessed prospectively
at inception of the derivative, and at each reporting period end
date prior to maturity.
Where a hedge of a forecast
transaction subsequently results in the recognition of a
non-financial asset, such as an item of inventory, the associated
gains and losses are recognised in the initial cost of that
asset.
When a hedging instrument expires
or is sold, terminated or exercised, or the entity revokes
designation of the hedge relationship but the hedged forecast
transaction is still expected to occur, the cumulative gain or loss
at that point remains in equity and is recognised in accordance
with the above policy when the transaction occurs. If the hedged
transaction is no longer expected to take place, the cumulative
unrealised gain or loss recognised in equity is reclassified in the
statement of other comprehensive income immediately.
Financial assets
Under IFRS 9, on initial
recognition, a financial asset is classified as measured at
amortised cost, fair value through profit or loss, or fair value
though other comprehensive income.
A financial asset is measured at
amortised cost using the effective interest rate if it meets both
of the following conditions: it is held within a business model
whose objective is to hold assets to collect contractual cash
flows; and its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and interest on
the principal amount outstanding. Under IFRS 9 trade receivables,
without a significant financing component, are classified and held
at amortised cost, being initially measured at the transaction
price and subsequently measured at amortised cost less any
impairment loss.
IFRS 9 includes an 'expected loss'
model ('ECL') for recognising impairment of financial assets held
at amortised cost. The Group has elected to measure loss allowances
for trade receivables at an amount equal to lifetime ECLs. Credit
losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in
accordance with the contract and the cash flows that the Group
expects to receive).
When determining whether the credit
risk of a financial asset has increased significantly since initial
recognition and when estimating expected credit losses, the Group
considers reasonable and supportable information that is relevant
and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis based on the
Group's historical experience and informed credit assessment and
including forward-looking information. The Group performs the
calculation of expected credit losses separately for each customer
group. The balances involved are immaterial for further
disclosure.
Financial assets at fair value through other comprehensive
income
Financial assets at fair value
through other comprehensive income comprise derivative financial
instruments entered into by the Group that are designated as
hedging instruments in hedge relationships as defined by IFRS 9.
Financial assets at fair value through other comprehensive income
are carried in the statement of financial position at fair value
with changes in fair value recognised in other comprehensive
income.
Financial assets at fair value through profit or
loss
Financial assets at fair value
through profit or loss include derivative financial instruments
entered into by the Group that are not designated as hedging
instruments in hedge relationships as defined by IFRS 9. Financial
assets at fair value through profit or loss are carried in the
statement of financial position at fair value with changes in fair
value recognised in profit and loss.
Derecognition
A financial asset (or, where
applicable, a part of a financial asset or part of a group of
similar financial assets) is derecognised when the rights to
receive cash flows from the asset have expired and the entity has
transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full and
either (a) the entity has transferred substantially all the risks
and rewards of the asset, or (b) the entity has neither transferred
nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
Impairment of financial assets
The Group assesses at each
reporting date, on a forward-looking basis the ECLs associated with
our financial assets carried at amortised cost.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the
scope of IFRS 9 are classified as financial liabilities at fair
value through profit or loss or other financial liabilities. The
entity determines the classification of its financial liabilities
at initial recognition. All financial liabilities are recognised
initially at fair value.
Financial liabilities at fair value through profit or
loss
Financial liabilities at fair value
through profit or loss include financial derivatives held for
trading. Financial liabilities are classified as held-for-trading
if they are acquired for the purpose of selling in the near term.
This category includes derivative financial instruments entered
into by the Group. Gains or losses on liabilities held-for-trading
are recognised in profit and loss.
Other financial liabilities
After initial recognition,
interest-bearing loans and borrowings, trade and other payables and
other liabilities are subsequently measured at amortised cost using
the effective interest rate method. Gains and losses are recognised
in the statement of comprehensive income when the liabilities are
derecognised as well as through the effective interest rate method
(EIR) amortisation process.
Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation
is included in finance costs.
Derecognition
A financial liability is
derecognised when the obligation under the liability is discharged
or cancelled or expires.
Fair value of financial instruments
The fair value of financial
instruments that are traded in active markets at each reporting
date is determined by reference to mark-to-market valuations
obtained from the relevant bank (bid price for long positions and
ask price for short positions), without any deduction for
transaction costs.
Refinancing
Where bank borrowings are
refinanced, the Group assesses whether the transaction results in
new facilities or a modification of the previous
facilities.
Where the transaction results in a
modification of the facilities, the Group assesses whether that
modification is substantial by reference both to whether the
present value of the cash flows of the new facilities is more than
10% different to the present value of the cash flows of the
previous facilities and by reference to any qualitative differences
between the old and new agreements.
Where a modification is
substantial, the Group derecognises the original liability and
recognises a new liability for the modified facilities with any
transaction costs expensed to the income statement. Where the
modification is non-substantial, the Group amends the carrying
amount of the liability to reflect the updated cash flows and
amends the EIR from the modification date.
Cash and cash equivalents
Cash and cash equivalents comprise
of cash at bank and in hand, less bank overdrafts to the extent the
Group have the right to offset and settle these balances
net.
The Group's cash and cash
equivalents balance includes £54m (2023: £31m) of credit card
receivables due to be received within three working days of the
year-end date.
Equity
Equity comprises the
following:
§ "Share capital" represents the nominal value of equity
shares;
§ "Share premium" represents the excess of the consideration
made for the shares, over and above the nominal valuation of those
shares;
§ "Retained earnings reserve" represents retained
profits;
§ "Hedging reserve" representing the fair value of the
derivatives held by the Group at the period end that are accounted
for under hedge accounting and that represent effective
hedges;
§ "Legal reserve" representing the statutory reserve required by
Luxembourg law as an apportionment of profit within each Luxembourg
company (up to 10% of the standalone share capital);
§ "Merger reserve" representing the reserve created during the
reorganisation of the Group in 2014; and
§ "Foreign exchange reserve" represents the cumulative
differences arising in retranslation of the subsidiaries and
associate's results.
Foreign currency translation
These consolidated financial
statements are presented in pounds sterling.
The following Group companies have
a functional currency of pounds sterling:
· B&M European Value Retail S.A.
· B&M European Value Retail 1 S.à r.l. (Lux
Holdco)
· B&M European Value Retail Holdco 1 Ltd (UK Holdco
1)
· B&M European Value Retail Holdco 2 Ltd (UK Holdco
2)
· B&M European Value Retail Holdco 3 Ltd (UK Holdco
3)
· B&M European Value Retail Holdco 4 Ltd (UK Holdco
4)
· EV Retail Ltd
· B&M Retail Ltd
· Opus Homewares Ltd
· Heron Food Group Ltd
· Heron Foods Ltd
· Cooltrader Ltd
· Heron Properties (Hull) Ltd
· Centz N.I. Limited
The following Group companies have
a functional currency of the Euro:
· B&M European Value Retail 2 S.à r.l. (SBR
Europe)
· B&M France SAS
· B&M European Value Retail Germany GmbH (Germany
Holdco)
The Group companies whose
functional currency is the Euro have been consolidated into the
Group via retranslation of their results in line with IAS 21
'Effects of Changes in Foreign Exchange Rates'. The assets and liabilities are translated into pounds sterling
at the period end exchange rate. The revenues and expenses are
translated into pounds sterling at the average monthly exchange
rate during the period. Any resulting foreign exchange difference
is cumulatively recorded in the foreign exchange reserve with the
annual effect being charged/credited to other comprehensive
income.
Transactions entered into by the
company in a currency other than the currency of the primary
economic environment in which it operates (the "functional
currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the balance sheet date. Exchange
differences arising on the retranslation of unsettled monetary
assets and liabilities are recognised immediately in profit or
loss.
Pension costs
The Group operates a defined
contribution scheme and contributions are charged to profit or loss
in the period in which they are incurred.
Provisions
Provisions are recognised when a
present obligation (legal or constructive) exists as a result of a
past event and where it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and the amount can be reliably estimated. Provisions are
discounted where the time value of money is considered to be
material.
The property provision also
contains expected dilapidation costs, which covers expected
dilapidation costs for any lease considered onerous, any related to
stores recently closed, any stores which are planned or at risk of
closure and those stores occupied but not under contract. At the
period end, 109 stores were provided against (2023:
105).
We do not provide against stores
which are under contract and not considered at risk of closure
(comprising the majority of the estate) as management consider that
such a provision would be minimal as a result of regular store
maintenance and limited fixed fit out costs.
We also provide against the
terminal dilapidation expense on our major distribution centres,
which is built up over the term of the leases held over those
distribution centres.
Climate change considerations
In preparing the financial
statements, the Group has considered the impact of climate change,
particularly in the context of the TCFD disclosures and the Group's
ESG strategy included in the Annual Report.
The Group's existing fixed asset
replacement programme is phased over several years and therefore
any changes in the requirements associated with climate change
would not have a material impact in any given year. The costs
expected to be incurred in connection with the Group's commitments
are included within the Group's budget used to support the going
concern and viability assessments and the impairment reviews of
non-current assets.
Given the identified risks are
expected to be present in the medium to long-term, the impact of
climate change on the going concern and viability of the Group over
the next three years is not expected to be material and is
therefore not currently classified as a key source of estimation of
uncertainty.
Critical judgements and key sources of estimation
uncertainty
The key assumptions concerning the
future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its
assumptions and estimates on parameters available when the
financial information was prepared. However, existing circumstances
and assumptions about future developments may change due to market
changes or circumstances arising beyond the control of the Group.
Such changes are reflected in the assumptions when they
occur.
Critical judgements
Investments in associates
Multi-lines International Company
Ltd (Multi-lines), which is 50% owned by the Group, has been judged
by management to be an associate rather than a subsidiary or a
joint venture.
Under IFRS 10 control is determined
by:
· Power
over the investee.
·
Exposure, or rights, to variable returns from its involvement
with the investee.
· The
ability to use its power over the investee to affect the amount of
the investor's returns.
Although 50% owned, B&M Group
does not have voting rights or substantive rights. Therefore, the
level of power over the business is considered to be more in
keeping with that of an associate than a joint-venture and,
therefore, it has been treated as such within these consolidated
financial statements.
Hedge accounting
The Group hedge accounts for stock
purchases made in US Dollars.
There is significant management
judgement involved in forecasting the level of dollar purchases to
be made within the period that the forward hedge has been bought
for.
Management takes a cautious view
that no more than 80% of the operational hedging in place can be
subject to hedge accounting, due to forecast uncertainties, and
assesses every forward hedge taken out, on inception, if that
figure should be reduced further by considering general purchasing
trends, and discussion of specific purchasing decisions.
Estimation uncertainty
There are no areas of estimation
uncertainty where management consider that there is a significant
risk of a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year.
Standards and interpretations not yet applied by the
Group
The following amendments to
accounting standards and interpretations, issued by the
International Accounting Standards Board (IASB), have not yet been
applied by the Group in the period. None of these are expected to
have a significant impact on the Group's consolidated results or
financial position:
IASB effective for annual periods
beginning on or after 1 January 2024
Standard
|
Summary of changes
|
EU endorsement status
|
Amendments to IAS 1
Presentation of Financial
Statements
|
The amendment requires an entity to
have the right to defer settlement of the liability for at least 12
months after the reporting date in order to classify a liability as
non-current. This right may be subject to a company complying with
conditions (covenants) specified in a loan arrangement.
|
Endorsed on 19 December
2023
Effective from 1 January
2024.
|
Amendments to IFRS 16
Lease Liability in a Sale and
Leaseback
|
The amendment requires a
seller-lessee to subsequently measure such leaseback liabilities in
a way that does not recognise any amount of gain or loss that
relates to the right-of-use it retains. The new requirements do not
prevent a seller-lessee from recognising in profit or loss any gain
or loss relating to the partial or full termination of a lease. The
amendments do not depend on an index or rate.
|
Endorsed on 20 November
2023.
Effective from 1 January
2024.
|
IASB effective for annual periods
beginning on or after 1 January 2025
Standard
|
Summary of changes
|
EU endorsement status
|
Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates
|
The amendments clarify how an
entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is
lacking. It also requires the disclosure of information that
enables users of financial statements to understand the impact of a
currency not being exchangeable.
|
Not yet endorsed.
|
Amendments to IAS 7 and IFRS
7
Supplier Finance
Arrangements
|
The amendments introduce two new
disclosure objectives for a company to provide information about
its supplier finance arrangements that would enable users
(investors) to assess the effects of these arrangements on the
company's liabilities and cash flows, and the company's exposure to
liquidity risk.
|
Not yet endorsed.
|
IASB effective for annual periods
beginning on or after 1 January 2027
Standard
|
Summary of changes
|
EU endorsement status
|
IFRS 18 Presentation and Disclosure
in Financial Statements
|
The standard requires the
presentation of two new defined subtotals in the income statement -
operating profit and profit before financing and income taxes and
defined categories (operating, investing and financing). The
disclosure of APMs that are not subtotalled in the financial
statements must be specified.
|
Not yet endorsed.
|
2
Segmental
information
IFRS 8 Operating Segments requires the Group's
segments to be identified on the basis of internal reports about
the components of the Group that are regularly reviewed by the
chief operating decision maker to assess performance and allocate
resources across each reporting segment.
The chief operating decision maker has been
identified as the Executive Directors who monitor the operating
results of the retail segments for the purpose of making decisions
about resource allocation and performance assessment.
For management purposes, the Group is
organised into three operating segments, UK B&M, UK
Heron
and France B&M segments comprising the
three separately operated business units within the
Group.
Items that fall into the corporate category,
which is not a separate segment but is presented to reconcile the
balances to those presented in the main statements, include those
related to the Luxembourg or associate entities, Group financing,
corporate transactions, any tax adjustments and items we consider
to be adjusting (see note 3).
The average Euro rate for translation purposes
was €1.1587/£ during the year, with the period-end rate being
€1.1694/£ (2023: €1.1581/£ and €1.1360/£ respectively).
53
week period to 30 March 2024
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Revenue
|
4,410
|
560
|
514
|
-
|
5,484
|
|
|
|
|
|
|
EBITDA (note 3)
|
743
|
50
|
89
|
(17)
|
865
|
Depreciation and amortisation
|
(195)
|
(23)
|
(40)
|
-
|
(258)
|
Profit/(loss) before interest and tax
|
548
|
27
|
49
|
(17)
|
607
|
Net
finance expense
|
(48)
|
(1)
|
(14)
|
(46)
|
(109)
|
Income tax (charge)/credit
|
(127)
|
(6)
|
(9)
|
11
|
(131)
|
Segment profit/(loss)
|
373
|
20
|
26
|
(52)
|
367
|
|
|
|
|
|
|
Total assets
|
2,905
|
284
|
413
|
23
|
3,625
|
Total liabilities
|
(1,491)
|
(119)
|
(307)
|
(974)
|
(2,891)
|
Capital expenditure*
|
(97)
|
(15)
|
(14)
|
-
|
(126)
|
52 week period to 25 March 2023
(restated†)
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Revenue
|
4,067
|
485
|
431
|
-
|
4,983
|
|
|
|
|
|
|
EBITDA (note 3)
|
680
|
41
|
76
|
(20)
|
777
|
Depreciation and
amortisation
|
(182)
|
(22)
|
(38)
|
-
|
(242)
|
Profit/(loss) before interest and
tax
|
498
|
19
|
38
|
(20)
|
535
|
Net finance expense
|
(45)
|
(3)
|
(11)
|
(40)
|
(99)
|
Income tax (charge)/credit
|
(87)
|
(3)
|
(6)
|
8
|
(88)
|
Segment profit/(loss)
|
366
|
13
|
21
|
(52)
|
348
|
|
|
|
|
|
|
Total assets
|
2,856
|
295
|
385
|
25
|
3,561
|
Total liabilities
|
(1,443)
|
(119)
|
(277)
|
(1,002)
|
(2,841)
|
Capital expenditure*
|
(77)
|
(11)
|
(10)
|
-
|
(98)
|
* Capital
expenditure includes both tangible and intangible
capital.
† Restated due to a change in the
presentation of deferred tax. See note 1 for more
details.
Adjusted operating profit by segment is equal
to the profit before interest and tax figures given
above.
Revenue is disaggregated geographically as
follows:
Period to
|
53 weeks ended 30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Revenue due from UK operations
|
4,970
|
4,552
|
Revenue due from French operations
|
514
|
431
|
Overall
revenue
|
5,484
|
4,983
|
Non-current assets (excluding deferred tax and
financial instruments) are disaggregated geographically as
follows:
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
UK operations
|
2,315
|
2,240
|
French operations
|
254
|
243
|
Luxembourg operations
|
5
|
8
|
Overall
|
2,574
|
2,491
|
The Group operates a small wholesale
operation, with the relevant disaggregation of revenue as
follows:
Period to
|
53 weeks ended 30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Revenue due to sales made in stores
|
5,454
|
4,940
|
Revenue due to wholesale activities
|
30
|
37
|
Revenue due to online activities
|
-
|
6
|
Overall
revenue
|
5,484
|
4,983
|
3 Reconciliation of non-IFRS
measures from the statement of comprehensive
income
The Group reports a selection of alternative
performance measures as detailed below. The Directors believe that
these measures provide additional information that is useful to the
users of the accounts.
EBITDA, adjusted EBITDA, adjusted operating
profit and adjusted profit are all non-IFRS measures and therefore
a reconciliation from the statement of comprehensive income is set
out below.
Period to
|
53 weeks ended 30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Profit on
ordinary activities before interest and tax
|
607
|
535
|
Add back depreciation and
amortisation
|
258
|
242
|
EBITDA
|
865
|
777
|
Costs in relation to the acquisition of Wilko
stores
|
9
|
-
|
Online project costs
|
-
|
2
|
Reverse the fair value and foreign exchange
impact of derivatives yet to mature
|
(2)
|
17
|
Foreign exchange on intercompany
balances
|
0
|
0
|
Adjusted
EBITDA
|
872
|
796
|
Depreciation and amortisation
|
(258)
|
(242)
|
Adjusted
operating profit
|
614
|
554
|
Interest costs related to lease liabilities
(see note 6)
|
(69)
|
(61)
|
Net other finance costs (see note 6)
|
(44)
|
(38)
|
Adjusted
profit before tax
|
501
|
455
|
Adjusted tax
|
(132)
|
(91)
|
Adjusted
profit for the period
|
369
|
364
|
Adjusted EBITDA (pre-IFRS 16), adjusted
operating profit (pre-IFRS 16) and adjusted profit (pre-IFRS 16)
are also non-IFRS measures and are reconciled as
follows:
Period to
|
53 weeks ended 30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
EBITDA (above)
|
865
|
777
|
Remove effects of IFRS 16 on EBITDA
|
(243)
|
(223)
|
EBITDA
(pre-IFRS 16)
|
622
|
554
|
Adjusting items (above)
|
7
|
19
|
Adjusted
EBITDA (pre-IFRS 16)
|
629
|
573
|
Pre-IFRS 16 depreciation and
amortisation
|
(82)
|
(76)
|
Adjusted
operating profit (pre-IFRS 16)
|
547
|
497
|
Net other finance costs
|
(44)
|
(38)
|
Adjusted
profit before tax (pre-IFRS 16)
|
503
|
459
|
Adjusted tax
|
(133)
|
(93)
|
Adjusted
profit (pre-IFRS 16) for the period
|
370
|
366
|
The effects of IFRS 16 on EBITDA caption
reflects the difference between IAS 17 and IFRS 16 accounting and
largely consists of the additional rent expense the Group would
have incurred under the IAS 17 standard.
Adjusting items are the fair value and foreign
exchange impact of derivatives yet to mature, the foreign exchange
impact of the retranslation of intercompany balances and
significant project gains or losses which may be included if
incurred, as they have been in the current year in relation to the
acquisition of several Wilko store leases, and in the prior year in
relation to our online trial (which had ceased by the prior
year-end date).
Adjusted tax represents the tax charge per the
statement of comprehensive income as adjusted only for the effects
of the adjusting items detailed above.
The following table reconciles the statutory
figures to the adjusted and adjusted
(pre-IFRS 16)
figures in the statutory profit and loss format on a
line-by-line basis.
53-week period to 30 March 2024
|
Statutory
figures
|
Adjusting
items
|
Adjusted
figures
|
Impact
of
IFRS
16
|
Adjusted
(pre-IFRS
16)
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Revenue
|
5,484
|
-
|
5,484
|
-
|
5,484
|
Cost of sales
|
(3,449)
|
-
|
(3,449)
|
-
|
(3,449)
|
Gross profit
|
2,035
|
-
|
2,035
|
-
|
2,035
|
Depreciation and
amortisation
|
(258)
|
-
|
(258)
|
176
|
(82)
|
Other administrative
expenses
|
(1,169)
|
7
|
(1,162)
|
(243)
|
(1,405)
|
Operating profit
|
608
|
7
|
615
|
(67)
|
548
|
Share of losses in
associates
|
(1)
|
-
|
(1)
|
-
|
(1)
|
Profit before interest and tax
|
607
|
7
|
614
|
(67)
|
547
|
Finance costs relating to
right-of-use assets
|
(69)
|
-
|
(69)
|
69
|
-
|
Other finance costs
|
(50)
|
1
|
(49)
|
-
|
(49)
|
Finance income
|
10
|
(5)
|
5
|
-
|
5
|
Profit before tax
|
498
|
3
|
501
|
2
|
503
|
Income tax expense
|
(131)
|
(1)
|
(132)
|
(1)
|
(133)
|
Profit for the period
|
367
|
2
|
369
|
1
|
370
|
52-week period to 25 March
2023
|
Statutory
figures
|
Adjusting
items
|
Adjusted
figures
|
Impact
of
IFRS
16
|
Adjusted
(pre-IFRS
16)
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Revenue
|
4,983
|
-
|
4,983
|
-
|
4,983
|
Cost of sales
|
(3,182)
|
-
|
(3,182)
|
-
|
(3,182)
|
Gross profit
|
1,801
|
-
|
1,801
|
-
|
1,801
|
Depreciation and
amortisation
|
(242)
|
-
|
(242)
|
166
|
(76)
|
Other administrative
expenses
|
(1,023)
|
19
|
(1,004)
|
(223)
|
(1,227)
|
Operating profit
|
536
|
19
|
555
|
(57)
|
498
|
Share of profits in
associates
|
(1)
|
-
|
(1)
|
-
|
(1)
|
Profit before interest and
tax
|
535
|
19
|
554
|
(57)
|
497
|
Finance costs relating to
right-of-use assets
|
(61)
|
-
|
(61)
|
61
|
-
|
Other finance costs
|
(40)
|
-
|
(40)
|
-
|
(40)
|
Finance income
|
2
|
-
|
2
|
-
|
2
|
Profit before tax
|
436
|
19
|
455
|
4
|
459
|
Income tax expense
|
(88)
|
(3)
|
(91)
|
(2)
|
(93)
|
Profit for the period
|
348
|
16
|
364
|
2
|
366
|
The tables below give the
reconciliation between the operating profit and adjusted EBITDA
(pre-IFRS 16) by segment:
53-week period to 30 March 2024
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Profit/(loss) before interest and tax
|
548
|
27
|
49
|
(17)
|
607
|
Adjusting items (above)
|
-
|
-
|
-
|
7
|
7
|
Adjusted operating profit/(loss)
|
548
|
27
|
49
|
(10)
|
614
|
Depreciation and amortisation
(pre-IFRS 16)
|
59
|
13
|
10
|
-
|
82
|
Impact of IFRS 16
|
(51)
|
(4)
|
(12)
|
-
|
(67)
|
Adjusted EBITDA
|
556
|
36
|
47
|
(10)
|
629
|
|
|
|
|
|
|
52-week period to 25 March
2023
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Profit/(loss) before interest and
tax
|
498
|
19
|
38
|
(20)
|
535
|
Adjusting items (above)
|
-
|
-
|
-
|
19
|
19
|
Adjusted operating
profit/(loss)
|
498
|
19
|
38
|
(1)
|
554
|
Depreciation and amortisation
(pre-IFRS 16)
|
52
|
12
|
12
|
-
|
76
|
Impact of IFRS 16
|
(48)
|
(1)
|
(8)
|
-
|
(57)
|
Adjusted EBITDA
|
502
|
30
|
42
|
(1)
|
573
|
|
|
|
|
|
| |
The segmental split in EBITDA and adjusted
EBITDA reconciles as follows:
53-week period to 30 March 2024
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Profit/(loss) before interest and
tax
|
548
|
27
|
49
|
(17)
|
607
|
Add back depreciation and
amortisation
|
195
|
23
|
40
|
-
|
258
|
EBITDA
|
743
|
50
|
89
|
(17)
|
865
|
Adjusting items (above)
|
-
|
-
|
-
|
7
|
7
|
Adjusted EBITDA
|
743
|
50
|
89
|
(10)
|
872
|
52-week period to 25 March
2023
|
UK
B&M
|
UK
Heron
|
France
B&M
|
Corporate
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
|
Profit/(loss) before interest and
tax
|
498
|
19
|
38
|
(20)
|
535
|
Add back depreciation and
amortisation
|
182
|
22
|
38
|
-
|
242
|
EBITDA
|
680
|
41
|
76
|
(20)
|
777
|
Adjusting items (above)
|
-
|
-
|
-
|
19
|
19
|
Adjusted EBITDA
|
680
|
41
|
76
|
(1)
|
796
|
Adjusted EPS and diluted EPS measures are
reconciled in note 11.
Post-tax free cash flow is reconciled to the
Consolidated statement of cash flows as follows:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Cash flows from operating activities
|
862
|
866
|
Income tax paid
|
(116)
|
(84)
|
Purchase of property, plant and
equipment
|
(123)
|
(93)
|
Purchase of intangible assets
|
(3)
|
(5)
|
Proceeds from sale of property, plant and
equipment
|
2
|
9
|
Repayment of the principal in relation to lease
liabilities
|
(171)
|
(168)
|
Payment of interest in relation to right-of-use
assets
|
(69)
|
(61)
|
Post-tax free
cash flow
|
382
|
464
|
Adjusted EBITDA and related measures are not
measures of performance or liquidity under IFRS and should not be
considered in isolation or as a substitute for measures of profit,
or as an indicator of the Group's operating performance or cash
flows from operating activities as determined in accordance with
IFRS.
4
Reconciliation of the 52-week
results from the 53-week adjusted results
Group management consider that
presenting an adjusted 52-week result is helpful to the users of
this annual report in order to directly compare like-for-like
periods.
Therefore, we present a
reconciliation to an adjusted 52-week statement of comprehensive
income derived from the adjusted 53-week statement of comprehensive
income by removing the final week of the financial year. The
adjusting items are those detailed in note 3.
Adjusted
|
53 weeks ended
30 March 2024
£'m
|
Week 53
£'m
|
52 weeks ended
23 March 2024
£'m
|
52 weeks ended
25 March 2023
£'m
|
|
|
|
|
|
Revenue
|
5,484
|
112
|
5,372
|
4,983
|
Cost of sales
|
(3,449)
|
(70)
|
(3,379)
|
(3,182)
|
Gross
profit
|
2,035
|
42
|
1,993
|
1,801
|
Operating costs
|
(1,406)
|
(29)
|
(1,377)
|
(1,228)
|
Adjusted
EBITDA (pre-IFRS 16)
|
629
|
13
|
616
|
573
|
Depreciation and amortisation (pre-IFRS
16)
|
(82)
|
(2)
|
(80)
|
(76)
|
Operating impact of IFRS 16
|
67
|
1
|
66
|
57
|
Adjusted
operating profit
|
614
|
12
|
602
|
554
|
Adjusting items
|
(7)
|
(0)
|
(7)
|
(19)
|
Profit before
interest and tax
|
607
|
12
|
595
|
535
|
Finance costs relating to right-of-use
assets
|
(69)
|
(1)
|
(68)
|
(61)
|
Other net finance costs
|
(40)
|
(1)
|
(39)
|
(38)
|
Profit before
tax
|
498
|
10
|
488
|
436
|
5
Operating
profit
The following items have been charged
in arriving at operating profit:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Auditor's remuneration
|
1
|
1
|
Payments to auditors in respect of non-audit
services:
|
|
|
Other assurance services
|
0
|
0
|
Cost of inventories recognised as an expense
(included in cost of sales)
|
3,449
|
3,182
|
Depreciation of owned property, plant and
equipment
|
79
|
71
|
Amortisation (included within administration
costs)
|
2
|
4
|
Depreciation of right-of-use assets
|
177
|
167
|
Impairment of right-of-use assets
|
5
|
2
|
Operating lease rentals
|
1
|
5
|
Loss/(profit) on sale of property, plant and
equipment
|
1
|
(1)
|
Gain on sale and leasebacks
|
-
|
(1)
|
Loss/(gain) on foreign exchange
|
7
|
(10)
|
6
Finance costs and finance
income
Finance costs include all
interest-related income and expenses. The following amounts
have been included in the continuing profit line for each reporting
period presented:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Interest on debt and borrowings
|
(47)
|
(38)
|
Ongoing amortisation of finance fees
|
(2)
|
(2)
|
Interest swap derivative
|
(0)
|
-
|
Total adjusted
finance expense
|
(49)
|
(40)
|
|
|
|
Release of remaining unamortised fees on
previous facilities
|
(1)
|
-
|
Total other
finance expense
|
(50)
|
(40)
|
|
|
|
Finance costs on lease liabilities
|
(69)
|
(61)
|
Total finance
expense
|
(119)
|
(101)
|
The finance expense reconciles to the statement
of cash flows as follows:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
Cash
|
|
|
Finance costs paid in relation to debt and
borrowings
|
41
|
36
|
Finance costs paid in relation to lease
liabilities
|
69
|
61
|
Fees paid in relation to refinancing
|
15
|
-
|
Finance costs paid
|
125
|
97
|
Non-cash
|
|
|
Movement of accruals in relation to debt and
borrowings
|
6
|
2
|
Capitalisation of paid fees in relation to new
facilities
|
(15)
|
-
|
Release of remaining unamortised fees on
previous facilities
|
1
|
-
|
Ongoing amortisation of finance fees
|
2
|
2
|
Interest swap derivative
|
(0)
|
-
|
Total finance
expense
|
119
|
101
|
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Interest income on overpaid corporation
tax
|
1
|
-
|
Interest income on loans and bank
accounts
|
4
|
2
|
Total adjusted
finance income
|
5
|
2
|
|
|
|
Gain on tender of corporate bonds
|
5
|
-
|
Total finance
income
|
10
|
2
|
Total net adjusted finance costs are
therefore:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Total adjusted finance expense
|
(49)
|
(40)
|
Total adjusted finance income
|
5
|
2
|
Total net
adjusted finance costs
|
(44)
|
(38)
|
7
Employee
remuneration
Expense recognised for employee
benefits is analysed below:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Wages and salaries
|
657
|
583
|
Social security costs
|
47
|
39
|
Share-based payment expense
|
3
|
3
|
Pensions - defined contribution
plans
|
10
|
9
|
Total
remuneration
|
717
|
634
|
There are £1m of defined contribution pension
liabilities owed by the Group at the period end (2023:
£1m).
B&M France operates a scheme where they must
provide a certain amount per employee to pay upon their retirement
date. The accrual on this scheme at the period end was £1m (2023:
£1m).
The average monthly number of persons employed
by the Group during the period was:
Period ended
|
53 weeks ended
30 March
2024
|
Restated*
52 weeks ended
25 March
2023
|
|
|
|
Sales staff
|
39,928
|
39,735
|
Administration
|
1,187
|
1,155
|
Total
staff
|
41,115
|
40,890
|
* The staff figures presented in
the prior year annual report have been restated following
recalculation. Previously sales staff numbers were presented as
42,299 with 1,206 administration staff, giving 43,505 in
total.
8
Key management
remuneration
Key management personnel and
Directors' remuneration includes the following:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
Directors'
remuneration:
|
|
|
Short-term employee benefits
|
4
|
4
|
Benefits accrued under the share option
scheme
|
1
|
1
|
Pension
|
0
|
0
|
Total
|
5
|
5
|
|
|
|
Key management
expense (includes Directors' remuneration):
|
|
|
Short-term employee benefits
|
14
|
9
|
Benefits accrued under the share option
scheme
|
1
|
2
|
Pension
|
0
|
0
|
Total
|
15
|
11
|
|
|
|
Amounts in
respect of the highest paid director emoluments:
|
|
|
Short-term employee benefits
|
3
|
2
|
Benefits accrued under the share option
scheme
|
0
|
1
|
Pension
|
0
|
0
|
Total
|
3
|
3
|
The emoluments disclosed above are of the
Directors and key management personnel who have served as a
Director within any of the continuing Group companies.
9
Share
options
The Group operates three
equity-settled share option schemes which split down to various
tranches. Details of these schemes follow.
1) Long-Term
Incentive Plan (LTIP) awards
The LTIP was adopted by the Board on 29 May
2014. No grant under this scheme can be made more than 10 years
after this date.
Eligibility
Employees and Executive Directors of the Group
are eligible for the LTIP and the awards are made at the discretion
of the remuneration committee.
Limits &
pricing
A fixed number of options are offered to each
participant, with the pricing set at £nil. The options offered to
each individual cannot exceed a total value of 250% of the
participants base salary where the value is measured as the market
value of the shares on grant multiplied by the number of options
awarded, with the whole scheme limited to 10% of the share capital
in issue.
Dividend
credits
All participants in any LTIP awards granted
after 1 April 2018 are entitled to a dividend credit, where the
notional dividend they would have received on the maximum number of
shares available under their award is converted into new share
options and added to the award based upon the share price on the
date of the dividend. These additional awards have been reflected
in the tables below.
Vesting &
exercise
The share options are subject to a set of
conditions measured over a three-year performance period as
follows:
LTIP Executive ("A") awards
· 50% of
the awards are subject to a TSR performance condition, where the
Group's TSR over the performance period is compared with a
comparator group. The awards vest on a sliding scale where the full
50% is awarded if the Group falls in the upper quartile, 12.5%
vests if the Group falls exactly at the median, and 0% below
that.
· 50% of
the awards are subject to a diluted EPS performance target. The
awards vest on a sliding scale based upon the EPS as
follows:
Award
|
EPS as at
|
50% paid
at
|
12.5% paid
at
|
LTIP 2017A
|
March-20
|
24.0p
|
19.0p
|
LTIP 2018A
|
March-21
|
28.0p
|
23.0p
|
LTIP 2019A
|
March-22
|
33.0p
|
27.0p
|
LTIP 2020A
|
March-23
|
30.0p
|
25.0p
|
LTIP 2021A
|
March-24
|
45.0p
|
37.0p
|
LTIP 2022A
|
March-25
|
50.0p
|
42.0p
|
LTIP 2023A
|
March-26
|
43.9p
|
37.9p
|
Below the 12.5% boundary, no options vest.
diluted EPS is defined as adjusted (pre-IFRS 16) diluted EPS, see
note 11.
· The
performance period is the three years ending the period end
specified in the EPS table above.
· Once
the performance period concludes, the calculated number of share
options remaining are then subject to a two-year holding
period.
· The
share options vest at the conclusion of the holding
period.
LTIP Restricted ("B") awards
· Group
EBITDA must be positive in each year of the LTIP.
· The
awards also have an employee performance condition
attached.
Vested awards can be exercised up to the tenth
anniversary of grant.
Tranches
There have been several awards of the LTIP, with
the details as follows.
Note that the LTIP Executive awards have been
split into the element subject to the TSR (50%) and the element
subject to the EPS (50%) since these were valued
separately.
The TSR awards market condition has been
included in the fair value calculation for those awards while all
non-market conditions have not been included. Expected volatility
has been calculated based upon the historic share price volatility
of the Group and those of comparable companies.
The key information used in the valuation of
these tranches is as follows:
Scheme
|
Date of
grant
|
Original options
granted
|
Fair value of each
option
|
Risk free
rate
|
Expected life
(years)
|
Volatility
|
2017A-TSR
|
7 Aug
17
|
40,610
|
272p
|
0.52%
|
5
|
32%
|
2017A-EPS
|
7 Aug
17
|
40,610
|
351p
|
0.52%
|
5
|
32%
|
2018A-TSR
|
22 Aug
18
|
226,672.5
|
240p
|
0.97%
|
5
|
29%
|
2018A-EPS
|
22 Aug
18
|
226,672.5
|
409p
|
0.97%
|
5
|
29%
|
2019A-TSR
|
22 Aug
19
|
275,640.5
|
251p
|
0.37%
|
5
|
31%
|
2019A-EPS
|
22 Aug
19
|
275,640.5
|
361p
|
0.37%
|
5
|
31%
|
2020A-TSR
|
30 Jul
20
|
141,718
|
409p
|
-0.11%
|
5
|
48%
|
2020A-EPS
|
30 Jul
20
|
141,718
|
464p
|
-0.11%
|
5
|
48%
|
2021A-TSR
|
3 Aug
21
|
218,861
|
354p
|
0.23%
|
5
|
37%
|
2021A-EPS
|
3 Aug
21
|
218,861
|
560p
|
0.23%
|
5
|
37%
|
2022A-TSR
|
17 Nov
22
|
309,342
|
124p
|
3.16%
|
5
|
31%
|
2022A-EPS
|
17 Nov
22
|
309,342
|
386p
|
3.16%
|
5
|
31%
|
2023A-TSR
|
1 Aug
23
|
224,422
|
409p
|
4.75%
|
5
|
32%
|
2023A-EPS
|
1 Aug
23
|
224,422
|
548p
|
4.75%
|
5
|
32%
|
2018/B1
|
23 Jan
18
|
19,264
|
400p
|
0.25%
|
3
|
32%
|
2018/B2
|
20 Aug
18
|
236,697
|
406p
|
0.25%
|
3
|
30%
|
2019/B1
|
20 Aug
19
|
369,061
|
348p
|
0.47%
|
3
|
30%
|
2019/B2
|
18 Sep
19
|
2,678
|
373p
|
0.47%
|
3
|
30%
|
2020/B1
|
30 Jul
20
|
303,092
|
463p
|
-0.12%
|
3
|
39%
|
2021/B1
|
3 Aug
21
|
281,950
|
560p
|
0.12%
|
3
|
42%
|
2022/B1
|
3 Aug
22
|
396,877
|
437p
|
1.75%
|
3
|
32%
|
2022/B2
|
15 Dec
22
|
3,641
|
412p
|
1.75%
|
3
|
32%
|
2023/B1
|
1 Aug
23
|
414,833
|
548p
|
4.77%
|
3
|
31%
|
Scheme
|
Options at 25 Mar
23
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options at 30 Mar
24
|
2018A-TSR
|
230,321*
|
-
|
3,978
|
-
|
(234,299)
|
-
|
2018A-EPS
|
297,452*
|
-
|
5,138
|
-
|
(302,590)
|
-
|
2019A-TSR
|
293,188*
|
-
|
19,395
|
-
|
-
|
312,583*
|
2019A-EPS
|
293,188*
|
-
|
19,395
|
-
|
-
|
312,583*
|
2020A-TSR
|
185,124
|
-
|
12,245
|
-
|
-
|
197,369*
|
2020A-EPS
|
185,124
|
-
|
12,245
|
-
|
-
|
197,369*
|
2021A-TSR
|
251,037
|
-
|
11,899
|
(71,146)
|
-
|
191,790
|
2021A-EPS
|
251,037
|
-
|
11,899
|
(71,146)
|
-
|
191,790
|
2022A-TSR
|
327,851
|
-
|
21,686
|
-
|
-
|
349,537
|
2022A-EPS
|
327,851
|
-
|
21,686
|
-
|
-
|
349,537
|
2023A-TSR
2023A-EPS
|
-
-
|
224,422
224,422
|
10,782
10,782
|
-
-
|
-
-
|
235,204
235,204
|
2020/B1
|
302,339
|
-
|
4,789
|
(2,817)
|
(304,311)
|
-
|
2021/B1
|
257,138
|
-
|
15,921
|
(21,925)
|
-
|
251,134
|
2022/B1
|
408,264
|
-
|
24,705
|
(52,107)
|
-
|
380,862
|
2022/B2
|
3,809
|
-
|
252
|
-
|
-
|
4,061
|
2023/B1
|
-
|
414,833
|
18,058
|
(45,413)
|
-
|
387,478
|
Scheme
|
Options
at 26 Mar 22
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options
at 25 Mar 23
|
2017A-TSR
|
27,557*
|
-
|
-
|
-
|
(27,557)
|
-
|
2017A-EPS
|
18,071*
|
-
|
-
|
-
|
(18,071)
|
-
|
2018A-TSR
|
202,465*
|
-
|
19,613
|
8,243†
|
-
|
230,321*
|
2018A-EPS
|
280,368*
|
-
|
25,327
|
(8,243)†
|
-
|
297,452*
|
2019A-TSR
|
279,393.5
|
-
|
24,963
|
(11,168.5)
|
-
|
293,188*
|
2019A-EPS
|
279,393.5
|
-
|
24,963
|
(11,168.5)
|
-
|
293,188*
|
2020A-TSR
|
169,361
|
-
|
15,763
|
-
|
-
|
185,124
|
2020A-EPS
|
169,361
|
-
|
15,763
|
-
|
-
|
185,124
|
2021A-TSR
|
229,660.5
|
-
|
21,376.5
|
-
|
-
|
251,037
|
2021A-EPS
|
229,660.5
|
-
|
21,376.5
|
-
|
-
|
251,037
|
2022A-TSR
|
-
|
309,342
|
18,509
|
-
|
-
|
327,851
|
2022A-EPS
|
-
|
309,342
|
18,509
|
-
|
-
|
327,851
|
2017/B1
|
53,576
|
-
|
-
|
-
|
(53,576)
|
-
|
2017/B2
|
13,379
|
-
|
-
|
-
|
(13,379)
|
-
|
2018/B2
|
38,289
|
-
|
-
|
-
|
(38,289)
|
-
|
2019/B1
|
391,522
|
-
|
10,023
|
(1,937)
|
(399,608)
|
-
|
2019/B2
|
3,403
|
-
|
107
|
-
|
(3,510)
|
-
|
2020/B1
|
297,103
|
-
|
24,247
|
(19,011)
|
-
|
302,339
|
2021/B1
|
271,020
|
-
|
22,204
|
(36,086)
|
-
|
257,138
|
2022/B1
|
-
|
396,877
|
23,532
|
(12,145)
|
-
|
408,264
|
2022/B2
|
-
|
3,641
|
168
|
-
|
-
|
3,809
|
*These share options have vested and
are in a two-year holding period.
† There was a rebalancing between the
EPS and TSR awards after the final analysis of the performance
conditions of this scheme. The overall shares options vesting on
the scheme does not change, only the split between TSR and
EPS.
2) Deferred
Bonus Share Plan (DBSP) awards
The DBSP was adopted by the Board on 30 July
2018. No grant under this scheme can be made more than 10 years
after this date.
The DBSP differs from the LTIP awards in that
there are no vesting conditions.
The scheme has been set up in order to allocate
a specified proportion of the Executive Director's annual bonus
into £nil price share options which are then placed in holding for
three years.
As there are no vesting conditions, these awards
have been valued at the amount of the bonus to be converted into
share options under the scheme.
There are annual awards of the scheme. The 2024
award will be made after this set of statutory accounts have been
published and will therefore be reported in the next annual
report.
Scheme
|
Options at 25 Mar
23
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options at 30 Mar
24
|
2020
Bonus allocation
|
59,673
|
-
|
1,031
|
-
|
(60,704)
|
-
|
2021
Bonus allocation
|
97,885
|
-
|
6,474
|
-
|
-
|
104,359
|
2022
Bonus allocation
|
304,382
|
-
|
20,135
|
-
|
-
|
324,517
|
2023
Bonus allocation
|
-
|
155,365
|
10,275
|
-
|
-
|
165,640
|
Scheme
|
Options
at 26 Mar 22
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options
at 25 Mar 23
|
2019 Bonus allocation
|
72,909
|
-
|
-
|
-
|
(72,909)
|
-
|
2020 Bonus allocation
|
54,591
|
-
|
5,082
|
-
|
-
|
59,673
|
2021 Bonus allocation
|
89,550
|
-
|
8,335
|
-
|
-
|
97,885
|
2022 Bonus allocation
|
-
|
278,466
|
25,916
|
-
|
-
|
304,382
|
The fair values of the presented schemes on
inception were £0.8m (2023), £1.1m (2022), £0.5m (2021), £0.2m
(2020) and £0.2m (2019).
3) Specific
LTIP awards
The remuneration committee are able to award
specific share schemes under the LTIP framework, where considered
appropriate. There are two such schemes at the year end, both
relating to the buy-out of executive share option schemes held
prior to appointment with the business. Both schemes have no
vesting conditions but are time limited with details given
below.
Scheme
|
Options at 25 Mar
23
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options at 30 Mar
24
|
Buy-out Nov-23
|
34,330
|
-
|
927
|
-
|
(35,257)
|
-
|
Buy-out Nov-24
|
34,330
|
-
|
2,271
|
-
|
-
|
36,601
|
Scheme
|
Options
at 26 Mar 22
|
Granted
|
Dividend
credit
|
Forfeited
|
Exercised
|
Options
at 25 Mar 23
|
Buy-out Nov-23
|
-
|
32,392
|
1,938
|
-
|
-
|
34,330
|
Buy-out Nov-24
|
-
|
32,392
|
1,938
|
-
|
-
|
34,330
|
The fair values of the presented schemes on
inception were both £0.1m.
The summary period-end position is as
follows:
Period ended
|
30 March
2024
|
25 March
2023
|
|
|
|
Share options outstanding at the start of the
year
|
4,144,323
|
3,170,633
|
Share options granted during the year
(including via dividend credit)
|
1,285,010
|
1,692,106
|
Share options forfeited or lapsed during the
year
|
(264,554)
|
(91,517)
|
Share options exercised in the year
|
(937,161)
|
(626,899)
|
Share options
outstanding at the end of the year
|
4,227,618
|
4,144,323
|
Of which;
|
|
|
Share options that are not vested
|
2,576,597
|
2,499,574
|
Share options that are in holding
|
1,651,021
|
1,644,749
|
Share options that are vested and eligible for
exercise
|
-
|
-
|
All exercised options are satisfied by the issue
of new share capital. The weighted average share price on exercise
was £5.52 (2023: £3.59). All outstanding options have a £nil (2023:
£nil) exercise price and the weighted average remaining contractual
life is 1.7 years (2023: 2.1 years).
In the year, £3m has been charged to the
Consolidated statement of comprehensive income in respect to the
share option schemes (2023: £3m). At the end of the year the
outstanding share options had a carrying value of £7m (2023:
£6m).
10
Taxation
The relationship between the expected tax
expense based on the standard rate of corporation tax in the UK of
25% (2023: 19%) and the tax expense actually recognised in the
Consolidated statement of comprehensive income can be
reconciled as follows:
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Current tax expense
|
122
|
84
|
Deferred tax charge
|
9
|
4
|
Total tax
expense recorded in profit and loss
|
131
|
88
|
|
|
|
Current tax credit in other comprehensive
income
|
(1)
|
-
|
Deferred tax credit in other comprehensive
income
|
(0)
|
(5)
|
Total tax
credit recorded in other comprehensive income
|
(1)
|
(5)
|
|
|
|
Result for the year before tax
|
498
|
436
|
|
|
|
Expected tax charge at the standard tax
rate
|
124
|
83
|
|
|
|
Effect of:
|
|
|
Expenses not deductible for tax
purposes
|
6
|
3
|
Income not taxable
|
(1)
|
(2)
|
Lease accounting
|
(0)
|
(1)
|
Foreign operations taxed at local
rates
|
1
|
2
|
Changes in the rate of corporation
tax
|
0
|
1
|
Adjustment in respect of prior years
|
0
|
2
|
Hold over gains on fixed assets
|
(0)
|
0
|
Other
|
1
|
0
|
Actual tax
expense
|
131
|
88
|
Deferred
taxation
Statement of financial position
|
30 March
2024
|
Restated*
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Accelerated tax depreciation
|
(17)
|
(11)
|
Relating to intangible brand assets
|
(27)
|
(27)
|
Fair valuing of assets and liabilities
(asset)
|
2
|
3
|
Fair valuing of assets and liabilities
(liability)
|
(2)
|
(1)
|
Temporary differences relating to the tax
accounting for leases (asset)
|
90
|
93
|
Temporary differences relating to the tax
accounting for leases (liability)
|
(68)
|
(69)
|
Movement in provision
|
1
|
0
|
Relating to share options
|
4
|
3
|
Held over gains on fixed assets
|
(4)
|
(4)
|
Losses carried forward
|
-
|
-
|
Other temporary differences
|
0
|
0
|
Net deferred tax liability
|
(21)
|
(13)
|
Analysed as;
|
|
|
Deferred tax asset
|
4
|
4
|
Deferred tax liability
|
(25)
|
(17)
|
*Restated to reflect a change in
the presentation of deferred tax, see note 1 for further
details.
Statement of comprehensive income
|
53 weeks ended
30 March
2024
|
52 weeks ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Accelerated tax depreciation
|
(7)
|
(5)
|
Relating to intangible brand assets
|
(0)
|
1
|
Fair valuing of assets and
liabilities
|
(2)
|
8
|
Temporary differences relating to the tax
accounting for leases
|
(1)
|
(0)
|
Movement in provision
|
0
|
(0)
|
Relating to share options
|
1
|
(0)
|
Held over gains on fixed assets
|
-
|
(0)
|
Brought forward losses
|
-
|
(3)
|
Other temporary differences
|
(0)
|
(0)
|
Net deferred tax charge
|
(9)
|
1
|
Analysed as;
|
|
|
Total deferred tax charge in profit or
loss
|
(9)
|
(4)
|
Total deferred tax credit in other
comprehensive income
|
0
|
5
|
At the period end, there are £2m of
unrecognised deferred tax assets within the Group, in relation to a
corporate interest restriction (2023: none).
The Group offsets tax assets and liabilities
if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax
assets and deferred tax liabilities relate to income taxes levied
by the same tax authority.
The Group has performed an assessment
of the potential exposure to Pillar Two income taxes under
Luxembourg legislation. This assessment is based upon our recent
and ongoing county-by-country reporting and the most recent
financial statements for the constituents of the Group. Based on
the assessment the Pillar Two effective tax rates in all of the
jurisdictions in which the Group operates are above 15%. We will
therefore apply the transitional safe harbour rules which will
exempt the Group from applying the full Pillar Two
rules.
11
Earnings per
share
Basic earnings per share
(EPS) amounts are calculated by dividing the net profit or loss for
the financial period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding at each period end.
Diluted EPS amounts are calculated
by dividing the net profit attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares
outstanding during each year plus the weighted average number of
ordinary shares that would be issued on conversion of any dilutive
potential ordinary shares into ordinary shares.
Adjusted (and adjusted (pre-IFRS
16)) basic and diluted EPS are calculated in the same way as above,
except using adjusted profit attributable to ordinary equity
holders of the parent, as defined in note 3.
There are share option schemes in
place (see note 9) which have a dilutive effect on both periods
presented.
The following reflects the income
and share data used in the EPS computations:
Period ended
|
30 March
2024
|
25 March
2023
|
|
|
£'m
|
£'m
|
|
|
|
|
|
Profit for the period attributable to
owners of the parent
|
367
|
348
|
|
Adjusted profit for the period
attributable to owners of the parent
|
369
|
364
|
|
Adjusted (pre-IFRS 16) profit for the
period attributable to owners of the parent
|
370
|
366
|
|
|
Thousands
|
Thousands
|
Weighted average number of ordinary
shares for basic earnings per share
|
1,002,392
|
1,001,593
|
Dilutive effect of employee share
options
|
2,282
|
1,730
|
Weighted average number of ordinary shares adjusted for the
effect of dilution
|
1,004,674
|
1,003,323
|
|
|
|
|
Pence
|
Pence
|
Basic earnings per share
|
36.6
|
34.8
|
Diluted earnings per share
|
36.5
|
34.7
|
Adjusted basic earnings per
share
|
36.8
|
36.3
|
Adjusted diluted earnings per
share
|
36.7
|
36.2
|
Adjusted (pre-IFRS 16) basic earnings
per share
|
36.9
|
36.5
|
Adjusted (pre-IFRS 16) diluted
earnings per share
|
36.8
|
36.5
|
|
|
|
| |
12
Investments in
associates
Period ended
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Net book
value
|
|
|
Carrying value at the start of the
period
|
8
|
8
|
Dividends received
|
(1)
|
-
|
Share of profits and losses in associates since
the prior year valuation exercise
|
(1)
|
(1)
|
Effect of foreign exchange on
translation
|
(1)
|
1
|
Carrying value
at the end of the period
|
5
|
8
|
The Group has a 22.5% holding in Centz Retail
Holdings Limited (Centz), a company incorporated in Ireland. The
principal activity of the company is retail sales and their
registered address is 5 Old Dublin Road, Stillorgan, Co.
Dublin.
The Group has a 50% interest in Multi-lines
International Company Ltd (Multi-lines), a company incorporated in
Hong Kong. The principal activity of the company is the purchase
and sale of goods and their registered address is 8/F, Hope Sea
Industrial Centre, No. 26 Lam Hing Street, Kowloon Bay, Hong
Kong.
None of the entities have discontinued
operations or other comprehensive income, except that on
consolidation both entities have a foreign exchange translation
difference.
Period ended
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Multi-lines
|
|
|
Non-current assets
|
13
|
14
|
Current assets
|
76
|
69
|
Non-current liabilities
|
-
|
-
|
Current liabilities
|
(86)
|
(75)
|
Net
assets
|
3
|
8
|
|
|
|
Revenue
|
242
|
252
|
Loss
|
(3)
|
(3)
|
Period ended
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Centz
|
|
|
Non-current assets
|
11
|
16
|
Current assets
|
27
|
24
|
Non-current liabilities
|
(11)
|
(10)
|
Current liabilities
|
(9)
|
(13)
|
Net
assets
|
18
|
17
|
|
|
|
Revenue
|
64
|
71
|
Profit
|
2
|
3
|
The figures for both associates show 12 months
to December 2023 (prior year: 12 months to December 2022), being
the period used in the valuation of the associate.
13
Intangible
assets
|
Goodwill
|
Software
|
Brands
|
Other
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
Cost or
valuation
|
|
|
|
|
|
At 26 March 2022
|
920
|
14
|
116
|
1
|
1,051
|
Additions
|
-
|
3
|
2
|
-
|
5
|
Disposals
|
-
|
(7)
|
(4)
|
-
|
(11)
|
Effect of retranslation
|
1
|
0
|
0
|
0
|
1
|
At 25 March
2023
|
921
|
10
|
114
|
1
|
1,046
|
Additions
|
-
|
3
|
-
|
-
|
3
|
Disposals
|
-
|
(0)
|
-
|
-
|
(0)
|
Remeasure
|
-
|
-
|
0
|
-
|
0
|
Effect of
retranslation
|
(0)
|
(0)
|
-
|
(0)
|
(0)
|
At 30 March
2024
|
921
|
13
|
114
|
1
|
1,049
|
|
|
|
|
|
|
Accumulated
amortisation / impairment
|
|
|
|
|
At 26 March 2022
|
-
|
10
|
1
|
-
|
11
|
Charge for the year
|
-
|
1
|
3
|
-
|
4
|
Disposals
|
-
|
(6)
|
(4)
|
-
|
(10)
|
Effect of retranslation
|
-
|
0
|
0
|
-
|
0
|
At 25 March
2023
|
-
|
5
|
0
|
-
|
5
|
Charge for the
year
|
-
|
2
|
0
|
-
|
2
|
Disposals
|
-
|
(0)
|
-
|
-
|
(0)
|
Effect of
retranslation
|
-
|
(0)
|
-
|
-
|
(0)
|
At 30 March
2024
|
-
|
7
|
0
|
-
|
7
|
|
|
|
|
|
|
Net book value
at 30 March 2024
|
921
|
6
|
114
|
1
|
1,042
|
Net book value at 25 March 2023
|
921
|
5
|
114
|
1
|
1,041
|
At the period end, no software was
being developed that is not yet in use (2023: same), and the Group
was not committed to the purchase of any intangible assets (2023:
same).
Impairment
review of intangible assets held with indefinite
life
The Group holds the following assets with
indefinite life:
|
30 March
2024
|
30 March
2024
|
25 March
2023
|
25 March
2023
|
|
Goodwill
|
Brand
|
Goodwill
|
Brand
|
|
£'m
|
£'m
|
£'m
|
£'m
|
|
|
|
|
|
UK B&M
|
807
|
99
|
807
|
99
|
UK Heron
|
88
|
14
|
88
|
14
|
France B&M
|
26
|
-
|
26
|
-
|
Not all items in the brand
classification have an indefinite life as some are time limited.
The brand intangible assets that have been identified as having an
indefinite life are designated as such as management believe that
these assets will hold their value for an indefinite period of
time. Specifically, the B&M and Heron brands represent leading
brands in their sectors with significant histories and growth
prospects.
The B&M France goodwill is held in Euros,
with an underlying balance of €30m (2023: €30m).
In each case the goodwill and brand assets have
been allocated to one group of CGUs, being the store estate within
the specific segment to which those assets relate.
The Group performs impairment tests at each
period end. The impairment test involves assessing
the net present value of the expected cash flows in relation to the
stores within each CGU according to a number of assumptions to
calculate the value-in-use for the group of CGUs.
The key assumptions in assessing
the value-in-use as at 30 March 2024 were;
The Group's discount rate
This was calculated using an
internal CAPM model which includes external estimates of the
risk-free rate, cost of debt, equity beta and market risk premium.
It is adjusted for which country the segment is in and how large
the segment is. Discount rates have decreased during the year,
largely due to a decrease in the equity risk premium.
The inflation rate for expenses
This is based upon the consumer
price index for the relevant country, as well as official reports
from the appropriate central bank.
Like-for-like sales growth
This is an estimate made by
management which encompasses the historical sales trends of the
entity and management's assessment of how each segment will perform
in the context of the current economic environment.
Gross margin
The standing assumption made by
management is that forecast gross margin will be similar to that
experienced in the prior year, and the result is subsequently
sensitised to the gross margin input to demonstrate the robustness
of the projection against this assumption.
Terminal growth rate
An estimate made by management
based upon the expected position of the business at the end of the
five-year forecast period, in the context of the macro growth level
of the economic environment in which that segment
operates.
The assumptions were as
follows:
As at
|
30 March
2024
|
25 March
2023
|
|
|
|
Discount rate (B&M UK)
|
10.2%
|
12.7%
|
Discount rate (Heron)
|
11.2%
|
14.7%
|
Discount rate (B&M France)
|
12.4%
|
14.7%
|
Inflation rate for costs (B&M UK and
Heron)
|
3.0%/2.0%*
|
8.0%/1.0%*
|
Inflation rate for costs (B&M
France)
|
3.0%/2.0%*
|
6.0%/4.0%/2.0%*
|
Like-for-like sales growth (B&M
UK)
|
1.5%/2.0%*
|
2.0%
|
Like-for-like sales growth (Heron)
|
4.0%/2.0%*
|
5.0%/2.0%
|
Like-for-like sales growth (B&M
France)
|
6.5%/2.0%*
|
7.0%/2.0%
|
Gross margin (all)
|
±0bps
|
±0bps
|
Terminal growth rate (B&M UK)
|
1.0%
|
0.5%
|
Terminal growth rate (Heron)
|
1.7%
|
1.0%
|
Terminal growth rate (B&M
France)
|
1.4%
|
1.2%
|
* The first figure reflects the
assumption in year one (and in the prior year, year two for French
inflation), with the following figure representing the long-term
rate.
These assumptions are reflected for
five years in the CGU forecasts and beyond this a perpetuity
calculation is performed using the assumptions made regarding
terminal growth rates.
In each case, the results of the
impairment tests on the continuing operations identified that the
value-in-use was in excess of the carrying value of assets within
each group of CGUs at the period-end dates. The headroom with the
base case assumptions in B&M UK was £4,611m, Heron £256m and
B&M France €637m (2023: £3,380m, £83m and €248m
respectively).
No indicators of impairment were
noted in the segments and the impairment tests were sensitised with
reference to the key assumptions for reasonable possible
scenarios.
These scenarios specifically
included:
· A drop off in sales or gross margin, modelling flat long-term
like-for-like sales and terminal growth rates.
· Sales prices failing to keep pace with inflation such that the
local inflation rates increase 50bps without a corresponding
increase in like-for-like sales.
· A deterioration of the credit environment, leading to a
significantly increased cost of capital of 20%.
To further quantify the
sensitivity, the below tables demonstrate the point at which each
impairment test would first fail for changes in each of the key
assumptions when applied to all years, except any specific year one
or two assumptions noted above, whilst assuming each other key
assumption is held level (e.g. for inflation sensitivity, the
like-for-like was not adjusted):
|
30 March
2024
|
25 March
2023
|
B&M
UK
|
|
|
Discount rate
|
32.5%
|
53.9%
|
Inflation rate for expenses
|
12.7%
|
12.8%
|
Like-for-like sales
|
(7.0)%
|
(5.4)%
|
Gross margin
|
(217)bps
|
(234)bps
|
Terminal growth rate
|
(46.1)%
|
Not
sensitive
|
B&M
France
|
|
|
Discount rate
|
53.8%
|
72.0%
|
Inflation rate for expenses
|
12.6%
|
8.0%
|
Like-for-like sales
|
(6.9)%
|
(3.0)%
|
Gross margin
|
(261)bps
|
(152)bps
|
Terminal growth rate
|
(55.9)%
|
Not
sensitive
|
Heron
|
|
|
Discount rate
|
24.1%
|
22.4%
|
Inflation rate for expenses
|
7.1%
|
3.9%
|
Like-for-like sales
|
(2.6)%
|
(0.5)%
|
Gross margin
|
(100)bps
|
(56)bps
|
Terminal growth rate
|
(17.7)%
|
(17.6)%
|
14
Property, plant and
equipment
|
Land and buildings
|
Motor vehicles
|
Plant,
fixtures and equipment
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
Cost or
valuation
|
|
|
|
|
At 26 March 2022
|
110
|
25
|
506
|
641
|
Additions
|
7
|
6
|
80
|
93
|
Disposals
|
(18)
|
(5)
|
(47)
|
(70)
|
Effect of retranslation
|
-
|
0
|
3
|
3
|
At 25 March
2023
|
99
|
26
|
542
|
667
|
Additions
|
8
|
13
|
102
|
123
|
Disposals
|
(0)
|
(3)
|
(6)
|
(9)
|
Remeasure
|
(0)
|
0
|
0
|
0
|
Effect of
retranslation
|
-
|
(0)
|
(1)
|
(1)
|
At 30 March
2024
|
107
|
36
|
637
|
780
|
|
|
|
|
|
Accumulated depreciation and impairment
charges
|
|
|
|
At 26 March 2022
|
28
|
13
|
237
|
278
|
Charge for the period
|
4
|
5
|
62
|
71
|
Disposals
|
(15)
|
(2)
|
(46)
|
(63)
|
Effect of retranslation
|
-
|
0
|
1
|
1
|
At 25 March
2023
|
17
|
16
|
254
|
287
|
Charge for the
period
|
5
|
4
|
70
|
79
|
Disposals
|
(0)
|
(2)
|
(4)
|
(6)
|
Remeasure
|
-
|
0
|
0
|
0
|
Effect of
retranslation
|
-
|
(0)
|
(1)
|
(1)
|
At 30 March
2024
|
22
|
18
|
319
|
359
|
|
|
|
|
|
Net book value
at 30 March 2024
|
85
|
18
|
318
|
421
|
Net book value at 25 March 2023
|
82
|
10
|
288
|
380
|
|
|
|
|
| |
Under the terms of the loan and notes
facilities in place at 30 March 2024, fixed and floating charges
were held over £85m of the net book value of land and buildings,
£18m of the net book value of motor vehicles and £285m of the net
book value of the plant, fixtures and equipment (2023: £82m, £10m
and £257m respectively).
At the period end, £4m of assets were under
construction (2023: £3m).
Included within land and buildings is land with
a cost of £6m (2023: £6m) which is not depreciated.
Capital commitments
There were £11m of contractual capital
commitments not provided within the Group financial statements as
at 30 March 2024 (2023: £7m).
15
Right-of-use
assets
|
Land and buildings
|
Motor vehicles
|
Plant,
fixtures and equipment
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
Net book value
|
|
|
|
|
As at 26 March 2022
|
1,053
|
8
|
5
|
1,066
|
Additions
|
130
|
2
|
3
|
135
|
Modifications
|
32
|
-
|
-
|
32
|
Disposals
|
(18)
|
(0)
|
(0)
|
(18)
|
Impairment
|
(2)
|
-
|
-
|
(2)
|
Depreciation
|
(160)
|
(4)
|
(3)
|
(167)
|
Foreign exchange
|
9
|
0
|
1
|
10
|
As at 25 March
2023
|
1,044
|
6
|
6
|
1,056
|
Additions
|
231
|
2
|
6
|
239
|
Modifications
|
28
|
-
|
-
|
28
|
Disposals
|
(35)
|
(0)
|
(0)
|
(35)
|
Impairment
|
(5)
|
-
|
-
|
(5)
|
Depreciation
|
(170)
|
(4)
|
(3)
|
(177)
|
Foreign
exchange
|
(5)
|
(0)
|
(0)
|
(5)
|
As at 30 March
2024
|
1,088
|
4
|
9
|
1,101
|
The vast majority of the Group's leases are in
relation to the property comprising the store and warehouse network
for the business. The other leases recognised are trucks, trailers,
company cars, manual handling equipment and various fixtures and
fittings. The leases are separately negotiated and no sub-group is
considered to be individually significant nor to contain
individually significant terms.
The Group recognises a lease term appropriate
to the business expectation of the term of use for the asset which
usually assumes that all extension clauses are taken, and break
clauses are not, unless the business considers there is a good
reason to recognise otherwise.
At the period end, there was one property with
a significant unrecognised extension clause for which the Group has
full autonomy over exercising in 2040. On the date of recognition
of the relevant right-of-use asset, in March 2020, the extension
period liability had a net present value of £30m.
There are no material covenants imposed by our
right-of-use leases.
In the year the Group expensed £4m (2023: £3m)
in relation to low value leases and <£1m (2023: <£1m) in
relation to short-term leases for which the Group applied the
practical expedient under IFRS 16.
The Group expensed <£1m (2023: <£1m) in
relation to variable lease payments. The agreements are ongoing and
future payments are expected to be in line with those expensed
recently.
The Group received £2m (2023: £2m) in relation
to subletting right-of-use assets.
The impairments noted in the table above are
recorded when the carrying value of a right-of-use asset exceeds
the value in use of that asset. These arise when we exit a store
before the related lease has come to an end, or as the outcome of
our annual store impairment review. All impairments are in relation
to store leases. No impairments have been reversed in the presented
periods.
The segmental splits of the impairments were
B&M UK £2m, Heron £2m, B&M France <£1m (2023: B&M UK
<£1m, Heron £1m, B&M France <£1m).
The current and future cashflows for the
right-of-use assets are:
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
This year
|
237
|
229
|
|
|
|
Within 1 year
|
242
|
229
|
Between 1 and 2 years
|
235
|
217
|
Between 2 and 3 years
|
222
|
200
|
Between 3 and 4 years
|
205
|
184
|
Between 4 and 5 years
|
179
|
166
|
Between 5 and 10 years
|
506
|
486
|
More than 10 years
|
125
|
141
|
Total
|
1,714
|
1,623
|
The change in lease liability reconciles to the
figures presented in the Consolidated statement of cashflows as
follows:
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Lease liabilities brought forward
|
1,301
|
1,310
|
|
|
|
Cash
|
|
|
Repayment of the principal in relation to
right-of-use assets
|
(171)
|
(168)
|
Payment of interest in relation to right-of-use
assets
|
(69)
|
(61)
|
|
|
|
Non-cash
|
|
|
Interest charge
|
69
|
61
|
Effects on lease liability relating to lease
additions, modifications and disposals
|
232
|
150
|
Effects of foreign exchange
|
(5)
|
9
|
|
|
|
Total cash
movement in the year
|
(240)
|
(229)
|
Total non-cash
movement in the year
|
296
|
220
|
Movement in
the year
|
56
|
(9)
|
|
|
|
Lease
liabilities carried forward
|
1,357
|
1,301
|
Of which current
|
170
|
177
|
Of which non-current
|
1,187
|
1,124
|
Discount
rates
Where, as in most cases, a discount rate
implicit to the lease is not available, discount rates are
calculated for each lease with reference to the underlying cost of
borrowing available to the business and several other factors
specific to the asset.
We have calculated the weighted average
discount rates and sensitivity to a 50bps change in the discount
rate to the interest charge as follows:
|
30 March
2024
|
25 March
2023
|
Weighted
average discount rate
|
|
|
Property
|
5.2%
|
4.7%
|
Equipment
|
7.3%
|
4.2%
|
All
right-of-use assets
|
5.2%
|
4.7%
|
|
|
|
Effect on
finance costs with a change of 50bps to the discount
rate
|
£'m
|
£'m
|
Property
|
7
|
6
|
Equipment
|
0
|
0
|
All
right-of-use assets
|
7
|
6
|
Sale and
leaseback
During the year, the business has not
undertaken any sale and leasebacks (2023: two).
The details of the prior period transactions
were as follows:
|
25 March
2023
|
|
£'m
|
|
|
Consideration received
|
4
|
Net book value of the assets
disposed
|
(3)
|
Costs of sale when specifically
recognised
|
(0)
|
Profit per pre-IFRS 16 accounting
standards
|
1
|
Opening adjustment to the right-of-use
asset
|
(0)
|
Profit recognised in the statement of
comprehensive income
|
1
|
|
|
Initial right-of-use asset
recognised
|
1
|
Initial lease liability recognised
|
(2)
|
The pre-IFRS 16 profit is higher because the
provisions of IFRS 16 require that a portion of the profit relating
to the sale and leaseback is instead recognised as a reduction in
the opening right-of-use asset, and therefore the benefit is
released over the term of the contract.
16
Inventories
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Goods for resale
|
776
|
764
|
Included in the amount above was a
net release of £3m related to inventory provisions (2023: £3m net
release). In the period to 30 March 2024, £3,449m (2023: £3,182m)
was recognised as an expense for inventories and £31m of supplier
rebates were received (2023: £26m).
17
Trade and other
receivables
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Non-current
|
|
|
Other receivables
|
5
|
6
|
Total
non-current receivables
|
5
|
6
|
|
|
|
Current
|
|
|
Trade receivables
|
9
|
9
|
Deposits on account
|
3
|
2
|
Provision for impairment
|
(2)
|
(2)
|
Net trade
receivables to non-related parties
|
10
|
9
|
Prepayments
|
32
|
26
|
Related party receivables
|
2
|
2
|
Other tax
|
10
|
5
|
Other receivables
|
22
|
10
|
Total current
receivables
|
76
|
52
|
Trade receivables are stated
initially at their fair value and then at amortised cost as reduced
by appropriate allowances for estimated irrecoverable amounts. The
carrying amount is determined by the Directors to be a reasonable
approximation of fair value.
There are no individually non-related
significant balances held at the current period end. See note 27 in
respect of balances held with related parties.
The following table sets out an analysis of provisions for
impairment of trade receivables:
Period ended
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Provision for impairment at the start of the
period
|
(2)
|
(2)
|
Impairment during the period
|
(1)
|
(0)
|
Utilised/released during the period
|
1
|
0
|
Effect of foreign exchange
|
-
|
(0)
|
Balance at the
period end
|
(2)
|
(2)
|
Trade receivables are non-interest-bearing and
are generally on terms of 30 days or less.
The following table sets out a maturity
analysis of trade receivables, including those which are
current:
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Current
|
6
|
6
|
1-30 days past due
|
1
|
1
|
31-90 days past due
|
0
|
0
|
Over 90 days past due
|
2
|
2
|
Balance at the
period end
|
9
|
9
|
18
Cash and cash
equivalents
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Cash at bank and in hand
|
182
|
237
|
Cash and cash
equivalents
|
182
|
237
|
The cash and cash equivalents balance includes
£54m (2023: £31m) in respect of credit card receivables.
As at the period end the Group had available
£220m of undrawn committed borrowing facilities (2023:
£142m).
19
Trade and other
payables
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Current
|
|
|
Trade payables
|
380
|
371
|
Other tax and social security
payments
|
37
|
80
|
Accruals and deferred income
|
101
|
63
|
Related party trade payables
|
33
|
11
|
Other payables
|
21
|
16
|
Total current
payables
|
572
|
541
|
Trade payables are generally on 30-day terms
and are not interest-bearing. The carrying value of trade payables
approximates to their fair value. For further details on the
related party trade payables, see note 27.
The Group had supply chain financing
facilities in place during the year. The facilities are operated by
major banking partners with high credit ratings and are limited to
$50m total exposure at any one time.
The exposure at the period end was $19m (2023:
$nil), the average balance over the year was $18m (2023:
$13m).
The purpose of the arrangement is to enable
our participating suppliers, at their discretion, to draw down
against their receivables from the Group prior to their usual due
date.
From the Group's perspective, the invoices
subject to these schemes are treated in the same way as those not
subject to these schemes. That is that they are approved under our
usual processes (and cannot be drawn down against until they have
been approved) and paid on the usual due date, which is in line
with the payment terms of our other international suppliers. We do
not benefit from the margin charged by the banks for any early draw
down, and the banks do not benefit from additional security when
compared to the security originally enjoyed by the supplier. There
is no impact on potential liquidity risk as the cash flow timings
and amounts are unchanged for those invoices in the schemes against
those not in these schemes.
There would be no impact on the Group if the
facilities became unavailable and there are no fees or charges
payable by the Group in regard to these arrangements.
As these invoices continue to be part of the
normal operating cycle of the Group, the schemes do not change the
recognition of the invoices subject to them, so they continue to be
recognised as trade payables, with the associated cash flows
presented within operating cash flows and without affecting the
calculation of Group net debt.
20
Other financial assets and
liabilities
Other financial assets
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Current
financial assets at fair value through profit and
loss:
|
|
|
Foreign exchange forward contracts
|
2
|
1
|
Current
financial assets at fair value through other comprehensive
income:
|
|
|
Foreign exchange forward contracts
|
2
|
0
|
Total current
other financial assets
|
4
|
1
|
|
|
|
Non-current
financial assets at fair value through profit and
loss:
|
|
|
Foreign exchange forward contracts
|
0
|
-
|
Non-current
financial assets at fair value through other comprehensive
income:
|
|
|
Foreign exchange forward contracts
|
1
|
-
|
Total
non-current other financial assets
|
1
|
-
|
|
|
|
Total other
financial assets
|
5
|
1
|
Financial assets through profit or
loss reflect the fair value of those derivatives that are not
designated as hedge relationships but are nevertheless intended to
reduce the level of risk for expected sales and
purchases.
Other financial
liabilities
As at
|
30 March
2024
|
25 March
2023
|
|
£'m
|
£'m
|
Current
financial liabilities at fair value through profit and
loss:
|
|
|
Foreign exchange forward
contracts
|
4
|
8
|
Current
financial liabilities at fair value through other comprehensive
income:
|
|
|
Foreign exchange forward contracts
|
6
|
5
|
Total current
other financial liabilities
|
10
|
13
|
|
|
|
Non-current
financial liabilities at fair value through profit and
loss:
|
|
|
Foreign exchange forward
contracts
|
0
|
-
|
Total
non-current other financial liabilities
|
0
|
-
|
|
|
|
Total other
financial liabilities
|
10
|
13
|
The other financial liabilities
through profit or loss reflect the fair value of those foreign
exchange forward contracts that are not designated as hedge
relationships but are nevertheless intended to reduce the level of
risk for expected sales and purchases.
Fair value hierarchy
The Group uses the following
hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
· Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities.
· Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly.
· Level 3: techniques which use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data.
As at the reporting dates, the
Group held the following financial instruments carried at fair
value on the balance sheet:
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|
£'m
|
£'m
|
£'m
|
£'m
|
30
March 2024
|
|
|
|
|
Foreign exchange contracts
|
(5)
|
-
|
(5)
|
-
|
|
|
|
|
|
25 March 2023
|
|
|
|
|
Foreign exchange
contracts
|
(12)
|
-
|
(12)
|
-
|
The financial instruments have been
valued by the issuing bank, using a mark to market method. The bank
has used various inputs to compute the valuations, which include
inter alia the relevant maturity date and strike rates, the current
exchange rate, fuel prices and relevant interbank floating interest
rate levels.
21
Financial liabilities -
borrowings
As at
|
30 March
2024
£'m
|
25 March
2023
£'m
|
Current
|
|
|
Revolving facility bank loan
|
25
|
-
|
Term facility bank loan
|
-
|
78
|
B&M France loan facilities
|
4
|
3
|
Total
|
29
|
81
|
Non-current
|
|
|
High yield bond notes
|
650
|
646
|
Term facility bank loan
|
221
|
219
|
B&M France loan facilities
|
10
|
8
|
Total
|
881
|
873
|
Bond
refinancing
On 23 November 2023, the Group refinanced part
of its existing £400m high yield bond notes (2020). £244m of bonds
were redeemed at 98%, resulting in a gain of £5m recognised as a
financial gain in the Consolidated statement of comprehensive
income in the period. The remaining £156m of the high yield bond
notes (2020) have a maturity date of July 2025.
On the same date, the Group issued £250m of
high yield bond notes, maturing in November 2030 with an interest
rate of 8.125%.
Transaction fees of £4m were capitalised and
are included in the carrying value of these bonds. An interest rate
swap derivative was taken at the start of the process to hedge
exposure to movements in long-term SONIA rates. This hedge was
considered to be fully effective and as such the fair value
movements of £8m are included in other comprehensive income and the
hedging reserve. The £8m value on the hedging reserve recycles
through to the other finance costs caption on the Consolidated
statement of comprehensive income on a straight line basis over the
term of the bond.
The 2020 bonds which were redeemed carried £1m
in fees incurred on inception, which were yet to be amortised.
These have been released through other finance costs on the
Consolidated statement of comprehensive income.
These transactions included the sale of bonds
by related parties, see note 27 for more details.
Extension of
senior loan facilities
In the prior period, the Group completed an
extension of its term facility bank loan.
The previous £300m term facility was drawn
down in July 2020 with £4m of fees capitalised into the balance at
that time. The agreement included a revolving facility of £155m and
was due to mature in April 2025.
This was extended with new facilities
totalling £450m due to mature in March 2028. These comprise a term
loan of £225m and a revolving facility of £225m and the agreement
also includes the availability of two 1-year extension terms,
subject to mutual consent with the banking syndicate. The cashflows
associated with the net repayment of £75m took place in the current
year.
An assessment was made by management with the
conclusion that the transaction represents an extension and not a
significant modification. As such, the remaining £2m of unamortised
capitalised fees have remained on the balance sheet and will be
amortised over the extended term. There were £3m of fees associated
with the term facility extension which have also been capitalised
into the loan balance.
In the current year, in March 2024, the Group
and the banking syndicate confirmed the activation of the first of
these 1-year extensions. As such, the facilities now have a
maturity date of March 2029.
Other
borrowings
The carrying values given above include fees
incurred on refinancing which are to be amortised over the terms of
those facilities. More details of these are given below.
The Group holds three tranches of high yield
bonds which are each held at amortised cost.
The three tranches of bonds were issued in
July 2020, November 2021 and November 2023, with £4m, £3m and £4m,
respectively, of fees capitalised at inception. The July 2020 bonds
were partly repaid in November 2023, resulting in a £1m release of
the remaining amortised fees on that portion of the
issue.
A number of these bonds have been sold or
purchased by related parties, see note 27.
All other loans are carried at their gross
cash amount. The maturities, which only relate to the position as
at 30 March 2024, and gross cash amounts of these facilities are
included in the table below.
|
Interest rate
%
|
Maturity
|
30 March
2024
£'m
|
25 March
2023
£'m
|
Revolving facility loan
|
1.75% +
SONIA
|
Apr-24
|
25
|
-
|
Term facility bank loan A
|
2.00% +
SONIA
|
Mar-29
|
225
|
300
|
High yield bond notes (2020)
|
3.625%
|
Jul-25
|
156
|
400
|
High yield bond notes (2021)
|
4.000%
|
Nov-28
|
250
|
250
|
High yield bond notes (2023)
|
8.125%
|
Nov-30
|
250
|
-
|
B&M France - BNP Paribas
|
0.75-3.97%
|
Sept-24 to
Nov-28
|
5
|
3
|
B&M France - Caisse d'Épargne
|
0.75-2.60%
|
Aug-24 to
Nov-29
|
1
|
2
|
B&M France - CIC
|
0.71-0.75%
|
Sept-24 to
Jan-27
|
1
|
2
|
B&M France - Crédit Agricole
|
0.39-0.81%
|
Sept-25 to
Jan-28
|
1
|
1
|
B&M France - Crédit Lyonnais
|
0.68-3.65%
|
Nov-24 to
Mar-29
|
5
|
3
|
B&M France - Société Générale
|
N/A
|
N/A
|
-
|
0
|
Total
|
|
|
919
|
961
|
The term facility bank loans and
the high yield bond notes have carrying values which include
transaction fees allocated on inception.
All B&M France facilities have
gross values in Euros, and the values above have been translated at
the period-end rates of €1.1694/£ (2023: €1.1360/£).
The movement in the loan
liabilities during the year breaks down as follows:
As at
|
30 March
2024
£'m
|
25 March
2023
£'m
|
|
|
|
Borrowings brought forward
|
954
|
956
|
|
|
|
Cash
|
|
|
Receipt of Group revolving credit
facilities
|
25
|
-
|
Repayment of old bank loan
facilities
|
(300)
|
-
|
Receipt of new bank loan facilities
|
225
|
-
|
Repayment of corporate bonds
|
(239)
|
-
|
Receipt due to newly issued corporate
bonds
|
250
|
-
|
Net repayment of Heron facilities
|
-
|
(3)
|
Net receipt of French facilities
|
3
|
0
|
Capitalised fees on refinancing
|
(7)
|
-
|
|
|
|
Non-cash
|
|
|
Foreign exchange on loan balances
|
(0)
|
0
|
Gain on tender
|
(5)
|
-
|
Refinancing fees accrued
|
1
|
(1)
|
Release of remaining unamortised fees on
previous facilities
|
1
|
-
|
Ongoing amortisation of finance fees
|
2
|
2
|
Finance fees on the loss on the derivative swap
on refinancing
|
0
|
-
|
|
|
|
Total cash
movement in the year
|
(43)
|
(3)
|
Total non-cash
movement in the year
|
(1)
|
1
|
Movement in
the year
|
(44)
|
(2)
|
|
|
|
Borrowings
carried forward
|
910
|
954
|
Of which current
|
29
|
81
|
Of which non-current
|
881
|
873
|
22
Provisions
|
Property provisions
£'m
|
Other
£'m
|
Total
£'m
|
|
|
|
|
At 26 March 2022
|
11
|
4
|
15
|
Provided in the period
|
1
|
2
|
3
|
Utilised during the period
|
(1)
|
(2)
|
(3)
|
Released during the period
|
(6)
|
(0)
|
(6)
|
At 25 March
2023
|
5
|
4
|
9
|
Provided in
the period
|
2
|
4
|
6
|
Utilised
during the period
|
(1)
|
(3)
|
(4)
|
Released
during the period
|
(0)
|
(1)
|
(1)
|
At 30 March
2024
|
6
|
4
|
10
|
|
|
|
|
Current
liabilities 2024
|
2
|
4
|
6
|
Non-current
liabilities 2024
|
4
|
-
|
4
|
|
|
|
|
Current liabilities 2023
|
2
|
4
|
6
|
Non-current liabilities 2023
|
3
|
-
|
3
|
The property provision relates to the expected
future costs on specific leasehold properties. This is inclusive of
onerous leases and dilapidations on these properties. The timing in
relation to utilisation is dependent upon the individual lease
terms.
The other provisions principally
relate to disputes concerning insured liability claims. A prudent
amount has been set aside for each claim as per legal advice
received by the Group. These claims are individually
non-significant and average £10k per claim (2023: £9k per
claim).
23
Share
capital
Allotted,
called up and fully paid
|
Shares
|
£'m
|
B&M
European Value Retail S.A. ordinary shares of 10p
each
|
|
|
As at 26 March 2022
|
1,001,226,836
|
100
|
Release of shares related to employee share
options
|
626,899
|
0
|
As at 25 March
2023
|
1,001,853,735
|
100
|
Release of
shares related to employee share options
|
937,161
|
0
|
As at 30 March
2024
|
1,002,790,896
|
100
|
Ordinary shares
Each ordinary share ranks pari passu
with each other ordinary share and each share carries one vote. The
Group parent is authorised to issue up to an additional
2,969,431,326 ordinary shares.
24
Cash generated from
operations
Period ended
|
53 weeks ended
30 March
2024
|
52 weeks
ended
25 March
2023
|
|
£'m
|
£'m
|
|
|
|
Profit before tax
|
498
|
436
|
Adjustments for:
|
|
|
Net interest expense
|
109
|
99
|
Depreciation on property, plant and
equipment
|
79
|
71
|
Depreciation on right-of-use assets
|
177
|
167
|
Impairment of right-of-use assets
|
5
|
2
|
Amortisation of intangible assets
|
2
|
4
|
Gain on sale and leaseback
|
-
|
(1)
|
Loss/(gain) on disposal of property, plant and
equipment
|
1
|
(1)
|
Share option expense
|
3
|
3
|
Change in inventories
|
(14)
|
103
|
Change in trade and other
receivables
|
(23)
|
1
|
Change in trade and other payables
|
29
|
(30)
|
Change in provisions
|
1
|
(6)
|
Share of losses from associates
|
1
|
1
|
(Profit)/loss resulting from fair value of
financial derivatives
|
(6)
|
17
|
Cash generated
from operations
|
862
|
866
|
25
Group information and
ultimate parent undertaking
The financial results of the Group
include the following entities.
Company name
|
Country
|
Date of incorporation
|
Percent held within the Group
|
Principal activity
|
B&M European Value Retail
S.A.
|
Luxembourg
|
May 2014
|
Parent
|
Holding company
|
B&M European Value Retail 1 S.à
r.l.
|
Luxembourg
|
November 2012
|
100%
|
Holding company
|
B&M European Value Retail Holdco
1 Ltd
|
UK
|
December 2012
|
100%
|
Holding company
|
B&M European Value Retail Holdco
2 Ltd
|
UK
|
December 2012
|
100%
|
Holding company
|
B&M European Value Retail Holdco
3 Ltd
|
UK
|
November 2012
|
100%
|
Holding company
|
B&M European Value Retail Holdco
4 Ltd
|
UK
|
November 2012
|
100%
|
Holding company
|
B&M European Value Retail 2 S.à
r.l.
|
Luxembourg
|
September 2012
|
100%
|
Holding company
|
EV Retail Limited
|
UK
|
September 1996
|
100%
|
Holding company
|
B&M Retail Limited
|
UK
|
March 1978
|
100%
|
General retail
|
Opus Homewares Limited
|
UK
|
April 2003
|
100%
|
Property management
|
Heron Food Group Ltd
|
UK
|
August 2002
|
100%
|
Holding company
|
Heron Foods Ltd
|
UK
|
October 1978
|
100%
|
Convenience retail
|
Cooltrader Ltd
|
UK
|
September 2012
|
100%
|
Dormant
|
Heron Properties (Hull)
Ltd
|
UK
|
February 2003
|
100%
|
Dormant
|
B&M European Value Retail Germany
GmbH
|
Germany
|
November 2013
|
100%
|
Ex-holding company
|
B&M France SAS
|
France
|
November 1977
|
100%
|
General retail
|
Centz N.I. Limited
|
UK
|
January 2021
|
100%
|
Property management
|
During the prior year, on 17 January 2023,
Retail Industry Apprenticeships Ltd was dissolved and ceased to be
a member of the Group.
Registered
offices
· The
Luxembourg entities are all registered at 3 rue Gabriel Lippmann,
L-5365 Munsbach, Luxembourg.
· Centz
N.I. Limited are registered at Murray House, 4 Murray Street,
Belfast, United Kingdom, BT1 6DN.
· The
other UK entities are all registered at The Vault, Dakota Drive,
Estuary Commerce Park, Speke, Liverpool, L24 8RJ.
· B&M
European Value Retail Germany GmbH are registered at Am Hornberg 6,
29614, Soltau.
· B&M
France are registered at 8 rue du Bois Joli, 63800 Cournon
d'Auvergne.
Associates
The Group has a 50% interest in Multi-lines
International Company Limited, a company incorporated in Hong Kong,
and a 22.5% interest in Centz Retail Holdings Limited, a company
incorporated in the Republic of Ireland. The share of profit or
loss from the associates is included in the statement of
comprehensive income, see note 12.
Ultimate
parent undertaking
The Directors of the Group consider the parent
and the ultimate controlling related party of this Group to be
B&M European Value Retail S.A., registered in
Luxembourg.
26
Financial risk management
The Group uses various financial
instruments, including bank loans, related party loans, finance
company loans, cash, equity investment, derivatives and various
items, such as trade receivables and trade payables that arise
directly from its operations.
The main risks arising from the
Group's financial instruments are market risk, currency risk, cash
flow interest rate risk, credit risk and liquidity risk. The
Directors review and agree policies for managing each of these
risks and they are summarised below.
The existence of these financial
instruments exposes the Group to a number of financial risks, which
are described in more detail below. In order to manage the
Group's exposure to those risks, in particular the Group's exposure
to currency risk, the Group enters into forward foreign currency
contracts. No transactions in derivatives are undertaken of a
speculative nature.
Market risk
Market risk encompasses three types
of risk, being currency risk, fair value interest rate risk and
commodity price risk. Commodity price risk is not considered
material to the business as the Group is able to pass on pricing
changes to its customers.
The Group's policies for managing
fair value interest rate risk are considered along with those for
managing cash flow interest rate risk and are set out in the
subsection entitled 'interest rate risk' below.
Currency risk
The Group is exposed to translation
and transaction foreign exchange risk arising from exchange rate
fluctuations on its purchases from overseas suppliers.
In relation to translation risk,
this is not considered material to the business as amounts owed in
foreign currency are short term of up to 30 days and are of a
relatively modest nature. Transaction exposures, including those
associated with forecast transactions, are hedged when known,
principally using forward currency contracts.
The majority of the Group's sales
are to customers in the UK and France and there is no material
currency exposure in this respect. A proportion of
the Group's purchases are priced in US
Dollars and the Group generally uses forward currency contracts to
minimise the risk associated with that exposure.
Approach to hedge accounting
As part of the Group's response to
currency risk the currency forwards taken out are intended to
prudently cover the majority of our stock purchases forecast for
that period. However, the Group only hedge accounts for that part
of the forward contract that we are reasonably certain will be
spent in the forecast period, allowing for potential volatility.
Therefore, management always consider the likely volatility for a
period and assign a percentage to each tranche of forwards
purchased, usually in the range 50-80%, and never more than
80%.
Effectiveness of the hedged forward
is then assessed against the Group hedge ratio, which has been set
by management at 80% as a reasonable guide to the certainty level
we expect the hedged portions of our forwards to at least achieve.
If they fail, or are expected to fail, to meet this ratio of
effectiveness then they are treated as non-hedged items, and
immediately expensed through administrative expenses in profit and
loss.
Ineffectiveness can be caused by
exceptional volatility in the market, by the timing of product
availability, or the desire to manage short-term company cash
flows, for instance, when a large amount of cash is required at
relatively short notice.
Where a hedged derivative matures
efficiently, the fair value is transferred to inventory and
subsequently to cost of sales when that item is sold. If the Group
did not hedge account, then the difference is that the gain or loss
in other comprehensive income would be presented in profit or loss
and the assets and liabilities presented under the classification
fair value through other comprehensive income would be at fair
value through profit or loss.
In the period, the Group has had
$605m of hedged derivatives mature (2023: $634m). The difference to
profit before tax if none of our forwards had been hedge accounted
during the year would have been a loss of £3m (2023: £7m loss) and
a pre-tax loss in other comprehensive income of £1m (2023: £28m
loss).
The net effective hedging loss
transferred to the cost of inventories in the year was £15m (2023:
net gain of £49m). At the period end, the amount of outstanding US
Dollar contracts covered by hedge accounting was $693m (2023:
$641m), which mature over the next 19 months (2023: 15 months). The
change in fair value of the hedging instruments used as the basis
for recognising hedge ineffectiveness was £nil (2023: £2m),
achieved effectiveness was 100% (2023: 97%).
Foreign currency sensitivity
The following table demonstrates
the sensitivity to a reasonably possible change in US Dollar
period-end exchange rates with all other variables held constant.
The impact on the Group's profit before tax and other comprehensive
income (net of tax) is largely due to changes in the fair value of
our foreign exchange derivatives and revaluation of creditors and
deposits held on account with our US Dollar suppliers.
As at
|
Change in USD
rate
|
30 March
2024
|
25
March
2023
|
|
£'m
|
£'m
|
|
|
|
|
Effect on profit before
tax
|
+2.5%
|
(7)
|
(11)
|
|
-2.5%
|
8
|
12
|
Effect on other comprehensive
income
|
+2.5%
|
(13)
|
(13)
|
|
-2.5%
|
14
|
13
|
Profit before tax and other
comprehensive income are not sensitive to the effects of a
reasonably possible change in the Euro period-end exchange
rates.
These calculations have been
performed by taking the period-end translation rate used in the
accounts and applying the changes noted above. The balance sheet
valuations are then directly calculated. The valuation of the
foreign exchange derivatives were projected based upon the spot
rate changing and all other variables being held equal.
Interest rate risk
Interest rate risk is the risk of
variability of the Group cash flows due to changes in the interest
rate. The Group is
exposed to changes in interest rates as a portion of the Group's
bank borrowings are subject to a floating rate based on
SONIA.
The Group's interest rate risk
arises mainly from long-term borrowings. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk.
The Group's exposure to interest rate fluctuations is not
considered to be material, however the Group has used interest rate
swaps to minimise the impact in the current year, in relation to
the final pricing of our bond issue (see note 21).
If floating interest rates had been
50 basis points higher/lower throughout the year with all other
variables held constant, the effect upon calculated pre-tax profit
for the year would have been:
As at
|
Basis point increase /
decrease
|
30 March
2024
|
25
March
2023
|
|
£'m
|
£'m
|
|
|
|
|
Effect on profit before
tax
|
+50
|
(1)
|
(1)
|
|
-50
|
1
|
1
|
This sensitivity has been
calculated by changing the interest rate for each interest payment
and accrual made by the Group over the period, by the amount
specified in the table above, and then calculating the difference
that would have been required.
Credit risk
Credit risk is the risk that a
counterparty will not meet its obligations under a financial
instrument or customer contract, leading to a financial
loss.
The Group's principal financial
assets are cash, derivatives and trade receivables. The credit
risks associated with cash and derivatives are limited as the main
counterparties are banks with high credit ratings (A long term and
A-1 short term (Standard & Poor) or better, (2023: A, A-1 (or
better) respectively). The principal credit risk arises therefore
from the Group's trade receivables.
Credit risk is further limited by
the fact that the vast majority of sales transactions are made
through the store registers, direct from the customer at the point
of purchase, leading to a low trade receivables balance.
In order to manage credit risk, the Directors set limits for
customers based on a combination of payment history and third-party
credit references. Credit limits are reviewed by the credit
controller on a regular basis in conjunction with debt ageing and
collection history. Provisions against bad debts are made
where appropriate.
Liquidity risk
Any impact on available cash and
therefore the liquidity of the Group could have a material effect
on the business as a result.
The Group's borrowings are subject to semi-annual banking covenants
against which the Group has had significant headroom to date with
no anticipated issues based upon forecasts made. Short-term
flexibility is achieved via the Group's rolling credit facility.
The following table shows the liquidity risk maturity of financial
liabilities grouping based on their remaining period at the balance
sheet date. The amounts disclosed are the contractual undiscounted
cash flows:
|
Within 1
year
|
Between 1 and 2
years
|
Between 2 and 5
years
|
More than 5
years
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
30
March 2024
|
|
|
|
|
|
Interest-bearing loans
|
82
|
207
|
603
|
286
|
1,178
|
Lease liabilities
|
242
|
235
|
606
|
631
|
1,714
|
Trade payables
|
413
|
-
|
-
|
-
|
413
|
|
|
|
|
|
|
25 March 2023
|
|
|
|
|
|
Interest-bearing loans
|
117
|
40
|
480
|
489
|
1,126
|
Lease liabilities
|
229
|
217
|
550
|
627
|
1,623
|
Trade payables
|
382
|
-
|
-
|
-
|
382
|
Fair value
The fair value of our corporate
bonds, which are all financial liabilities held at amortised cost,
has been determined by using the relevant quoted bid price for
those bonds. These differ to the carrying values as shown
below.
|
Fair Value (Level
1)
|
Carrying
Value
|
As at
|
30 March
2024
£'m
|
25
March
2023
£'m
|
30 March
2024
£'m
|
25
March
2023
£'m
|
|
|
|
|
|
High yield bond notes
(2020)
|
152
|
374
|
155
|
398
|
High yield bond notes
(2021)
|
231
|
210
|
248
|
248
|
High yield bond notes
(2023)
|
269
|
N/A
|
247
|
N/A
|
The fair value of the other
financial assets and liabilities of the Group are not materially
different from their carrying value. Refer to the table below.
These all represent financial assets and liabilities measured at
amortised cost except where stated as measured at fair value
through profit and loss or fair value through other comprehensive
income.
As at
Financial assets
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Fair
value through profit and loss
|
|
|
Forward foreign exchange
contracts
|
2
|
1
|
Fair value through other comprehensive
income
|
|
|
Forward foreign exchange
contracts
|
3
|
0
|
Loans and receivables
|
|
|
Cash and cash
equivalents
|
182
|
237
|
Trade receivables
|
12
|
11
|
Other receivables
|
22
|
10
|
As at
Financial liabilities
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Fair value through profit and loss
|
|
|
Forward foreign exchange
contracts
|
4
|
8
|
Fair value through other comprehensive
income
|
|
|
Forward foreign exchange
contracts
|
6
|
5
|
Amortised cost
|
|
|
Lease liabilities
|
1,357
|
1,301
|
Interest-bearing loans and
borrowings (excluding corporate bonds)
|
260
|
308
|
Trade payables
|
413
|
382
|
Other payables
|
21
|
16
|
27
Related party
transactions
The Group has transacted with the
following related parties over the periods:
Multi-lines International Company
Limited, a supplier, and Centz Retail Holdings Limited, a customer,
are associates of the Group.
Ropley Properties Ltd, Triple
Jersey Ltd, TJL UK Ltd, Rani Investments, Fulland Investments
Limited, Golden Honest International Investments Limited, Hammond
Investments Limited, Joint Sino Investments Limited and Ocean Sense
Investments Limited, all landlords of properties occupied by the
Group, and Rani 1 Holdings Limited, Rani 2 Holdings Limited and SSA
Investments S.à.r.l. (SSA Investments), bondholders and beneficial
owners of equipment hired to the Group, are directly or indirectly
owned by the recently retired director Simon Arora, his family, or
his family trusts (together, the 'Arora related
parties').
In the current period, significant
related party transactions occurred, with Simon Arora, SSA
Investments, Rani 1 Investments and Rani 2 Investments each selling
their full holdings of, respectively, £35m, £13m, £50m and £50m in
the 2020 3.625% corporate bonds as part of the tender exercise that
took place in November 2023.
There were significant related
party transactions in the prior period, with SSA Investments
purchasing a total of £43m of our 4.00% corporate bonds and £13m of
our 3.625% corporate bonds in June 2022, and Simon Arora purchasing
£35m of our 3.625% corporate bonds over December 2022 and January
2023.
Purchases have been made in prior
periods and the overall position is summarised in the table
below
with all related party bondholders
being Arora related parties.
|
53 weeks
ended
30 March
2024
£'m
|
52 weeks
ended
25
March
2023
£'m
|
|
|
|
Simon Arora (3.625%, 2025
bonds)
|
-
|
35
|
SSA Investments (3.625%, 2025
bonds)
|
-
|
13
|
SSA Investments (4.000%, 2028
bonds)
|
99
|
99
|
Rani 1 Investments (3.625%, 2025
bonds)
|
-
|
50
|
Rani 2 Investments (3.625%, 2025
bonds)
|
-
|
50
|
Total
|
99
|
247
|
The expense incurred during the
year, and the accrual at the end of the year are shown in the table
below:
|
Expense
to 30 March
2024
£'m
|
Accrual
on 30 March
2024
£'m
|
Expense
to
25 March 2023
£'m
|
Accrual
on 25
March 2023
£'m
|
|
|
|
|
|
Simon Arora
|
0.8
|
-
|
0.3
|
0.3
|
SSA Investments
|
4.3
|
1.5
|
4.0
|
1.6
|
Rani 1 Investments
|
1.2
|
-
|
1.8
|
0.4
|
Rani 2 Investments
|
1.2
|
-
|
1.8
|
0.4
|
Total
|
7.5
|
1.5
|
7.9
|
2.7
|
The following table sets out the
total amount of trading transactions with related parties included
in the statement of comprehensive income:
Period ended
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Sales to associates of the Group
|
|
|
Centz Retail Holdings
Limited
|
27
|
34
|
Total sales to related parties
|
27
|
34
|
Period ended
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Purchases from associates of the Group
|
|
|
Multi-lines International Company
Ltd
|
259.0
|
193.7
|
Purchases from parties related to key management
personnel
|
|
|
Fulland Investments
Limited
|
0.3
|
0.2
|
Golden Honest International
Investments Limited
|
0.2
|
0.2
|
Hammond Investments
Limited
|
0.3
|
0.2
|
Joint Sino Investments
Limited
|
0.2
|
0.2
|
Ocean Sense Investments
Limited
|
0.2
|
0.2
|
SSA Investments
|
0.0
|
0.1
|
Total purchases from related parties
|
260.2
|
194.8
|
The IFRS 16 lease figures in
relation to these related parties, which are all related to key
management personnel, are as follows:
|
Depreciation
charge
|
Interest
charge
|
Total
charge
|
Right-of-use
asset
|
Lease
liability
|
Net
liability
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
Period ended 30 March 2024
|
|
|
|
|
|
|
Rani Investments
|
0
|
0
|
0
|
0
|
(0)
|
(0)
|
Ropley Properties
|
2
|
1
|
3
|
7
|
(10)
|
(3)
|
TJL UK Limited
|
1
|
0
|
1
|
10
|
(12)
|
(2)
|
Triple Jersey Limited
|
9
|
3
|
12
|
53
|
(64)
|
(11)
|
Total
|
12
|
4
|
16
|
70
|
(86)
|
(16)
|
|
Depreciation
charge
|
Interest
charge
|
Total
charge
|
Right-of-use
asset
|
Lease
liability
|
Net
liability
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
Period ended 25 March
2023
|
|
|
|
|
|
|
Rani Investments
|
0
|
0
|
0
|
1
|
(1)
|
(0)
|
Ropley Properties
|
2
|
1
|
3
|
8
|
(11)
|
(3)
|
TJL UK Limited
|
1
|
0
|
1
|
10
|
(12)
|
(2)
|
Triple Jersey Limited
|
8
|
3
|
11
|
46
|
(57)
|
(11)
|
Total
|
11
|
4
|
15
|
65
|
(81)
|
(16)
|
There was one lease entered into by
the Group during the current period with the Arora related parties
(2023: nil). The total expense on this lease in the period was
<£1m (2023: nil). There were no conditionally exchanged leases
with Arora related parties in the current period with a long stop
completion date (2023: <£1m, three leases).
The following tables set out the
total amount of trading balances with related parties outstanding
at the period end.
As at
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Trade receivables from associates of the
Group
|
|
|
Centz Retail Holdings
Ltd
|
2
|
2
|
Total related party trade receivables
|
2
|
2
|
|
|
|
As at
|
30 March
2024
£'m
|
25
March
2023
£'m
|
Trade payables to associates of the Group
|
|
|
Multi-lines International Company
Ltd
|
32
|
7
|
Trade payables to companies owned by key management
personnel
|
|
|
Rani Investments
|
-
|
0
|
Ropley Properties Ltd
|
0
|
1
|
TJL UK Limited
|
1
|
1
|
Triple Jersey Ltd
|
0
|
2
|
Total related party trade payables
|
33
|
11
|
Outstanding trade balances at the
balance sheet dates are unsecured and interest free and settlement
occurs in cash. There have been no guarantees provided or received
for any related party trade receivables or payables.
The balance with Multi-lines
International Company Ltd includes $18m (2023: $nil) held within a
supply chain facility. See note 19 for more details.
The business has not recorded any
impairment of trade receivables relating to amounts owed by related
parties as at 30 March 2024 (2023: no impairment). This assessment
is undertaken each year through examining the financial position of
the related party and the market in which the related party
operates.
The future lease commitments on the
Arora related party properties are:
As at
|
30 March
2024
|
25
March
2023
|
|
£'m
|
£'m
|
|
|
|
Not later than one year
|
16
|
14
|
Later than one year and not later
than two years
|
15
|
13
|
Later than two years and not later
than five years
|
39
|
35
|
Later than five years
|
33
|
35
|
Total
|
103
|
97
|
See note 12 for further information
on the Group's associates.
For further details on the
transactions with key management personnel, see note 8 and the
remuneration report.
28
Capital
management
For the purpose of the
Group's capital management, capital includes issued capital and all
other equity reserves attributable to the equity holders of the
parent. The primary objective of the Group's capital management is
to maximise the shareholder value.
In order to achieve this overall
objective, the Group's capital management, amongst other things,
aims to ensure that it meets financial covenants attached to the
interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would
permit the bank to immediately call loans and borrowings. There
have been no breaches in the financial covenants of any
interest-bearing loans and borrowing in the current or prior
period.
The Group manages its capital
structure and makes adjustments in light of changes in economic
conditions and the requirements of the financial
covenants.
To maintain or adjust the capital
structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issue new
shares.
The Group uses the following
definition of net debt:
External interest-bearing loans and
borrowings less cash and short-term deposits.
The interest-bearing loans figure
used is the gross amount of cash borrowed at that time, as opposed
to the carrying value under the amortised cost method.
As at
|
30 March
2024
£'m
|
25
March
2023
£'m
|
|
|
|
Interest-bearing loans and
borrowings (note 21)
|
919
|
961
|
Less: Cash and short-term deposits
(note 18)
|
(182)
|
(237)
|
Net debt
|
737
|
724
|
29
Post balance sheet
events
On 29 May 2024, shareholders
appointed Nadia Shouraboura as a further Independent Non-Executive
Director to the Board of Directors of the Company, with immediate
effect and until the Annual General Meeting to be held on 23 July
2024. Nadia's CV is included in the annual management report for
the financial year ended March 2024.
On 4 June 2024, the Group's
Nomination Committee and Board of Directors agreed that Tiffany
Hall be proposed as the successor to Peter Bamford in the role as
Chair of the Board of Directors. As such, Peter Bamford does
not intend to stand for re-election at the AGM in July
2024.
30
Dividends
An interim dividend of 5.1 pence
per share (£51.1m) was declared in October 2023
and has been paid.
A special dividend of 20.0 pence
per share (£200.6m), was declared in January 2024 and
has been paid.
A final dividend of 9.6 pence per
share (£96.3m), giving a full year dividend of 14.7 pence per share
(£147.4m), is proposed.
Relating to the prior
year;
An interim dividend of 5.0 pence
per share (£50.1m) was declared in November 2022 and has been
paid.
A special dividend of 20.0 pence
per share (£200.4m), was declared in January 2023 and has been
paid.
A final dividend of 9.6 pence per
share (£96.2m), giving a full year dividend of 14.6 pence per share
(£146.3m), was declared in July 2023 and has been paid.
31
Contingent liabilities and
guarantees
As at 30 March 2024,
B&M European Value Retail S.A., B&M European Value
Retail 1 S.à r.l., B&M European Value
Retail 2 S.à r.l., B&M European Value Retail Holdco 1 Ltd,
B&M European Value Retail Holdco 2 Ltd, B&M European Value
Retail Holdco 3 Ltd, B&M European Value Retail Holdco 4 Ltd, EV
Retail Ltd, B&M Retail Ltd, Heron Food Group Ltd and Heron
Foods Ltd are all guarantors to both the loan and notes agreements
which are formally held within B&M European Value Retail S.A.
The amounts outstanding as at the period end were £250m for the
loans, with the balance held in B&M European Value Retail
Holdco 4 Ltd, and £656m for the notes, with the balance held in
B&M European Value Retail S.A.
As at 25 March 2023, B&M
European Value Retail S.A., B&M European Value Retail 1
S.à r.l., B&M European Value Retail 2 S.à
r.l., B&M European Value Retail Holdco 1 Ltd, B&M European
Value Retail Holdco 2 Ltd, B&M European Value Retail Holdco 3
Ltd, B&M European Value Retail Holdco 4 Ltd, EV Retail Ltd,
B&M Retail Ltd, Heron Food Group Ltd and Heron Foods Ltd are
all guarantors to both the loan and notes agreements which are
formally held within B&M European Value Retail S.A. The amounts
outstanding as at the period end were £300m for the loans, with the
balance held in B&M European Value Retail Holdco 4 Ltd, and
£650m for the notes, with the balance held in B&M European
Value Retail S.A.
32
Directors
The Directors that served
during the period were:
P Bamford (Chairman)
A Russo (CEO)
M Schmidt (CFO)
R McMillan
T Hall
P MacKenzie
O Tant
S Arora (retired 21 April
2023)
H Lasry (appointed 22 September
2023)
C Bradley (retired 25 July
2023)
On 23 January 2024, Peter Bamford
announced he will be resigning as Chairman of the Group before the
end of our next financial year, 29 March 2025.
On 22 March 2024, the Group announced
the appointment of Nadia Shouraboura as a Non-Executive Director,
with effect from 29 May 2024.
On 4 June 2024, the Group's
Nomination Committee and Board of Directors agreed that Tiffany
Hall be proposed as the successor to Peter Bamford in the role as
Chair of the Board of Directors. As such, Peter Bamford does
not intend to stand for re-election at the AGM in July
2024.
All Directors served for the whole
period except were indicated above.