B&M European Value Retail Sees Revenue Rise, Profitability Dip

B&M European Value Retail S.A. (LON: BME) announced its interim results for the 26 weeks ending September 27, 2025, revealing a mixed financial performance. While revenue experienced growth, profitability metrics declined significantly. The markets are closely watching BME's “Back to B&M Basics” plan aimed at revitalizing performance.

Group revenue increased by 4.0% to £2,749 million, up from £2,644 million in the first half of FY25. However, Group adjusted EBITDA (pre-IFRS 16) decreased by 30.2% to £191 million, compared to £274 million in the same period last year. This translated to a margin contraction of 341 basis points, falling to 7.0% from 10.4%.

Adjusted diluted earnings per share (EPS) also saw a substantial drop, declining by 47.9% to 7.2p from 13.7p. Post-tax free cash flow decreased by 29.5% to £51 million. The interim ordinary dividend was reduced to 3.5p per share from 5.3p.

Net debt increased to £859 million, up 9.1% from £788 million in the first half of FY25. The net debt to last-twelve-months adjusted EBITDA (pre-IFRS 16) leverage ratio rose to 1.6x, compared to 1.2x in the prior year.

The company is addressing excess capital through share buybacks. Completion of a redomicile process is expected in the new calendar year, which will enable share buybacks, subject to shareholder approvals.

Driver Breakdown:

• UK Sales: B&M UK total sales grew by 3.5%, with like-for-like (LFL) sales up 0.1%.
• Store Expansion: The Group opened 31 gross and 15 net new stores across its operations.
• Margin Pressure: The decline in Group adjusted EBITDA margin reflects challenges in profitability.

CEO Tjeerd Jegen stated, “Our Back to B&M Basics plan is progressing and we are taking decisive actions to improve our retail execution and restore our financial performance,” reinforcing the company’s focus on revitalizing its core operations and improving financial performance.