Top story

B&M Bargains owner B&M European Value Retail has raised its full year profits guidance after posting double-digit growth in the quarter leading to Christmas.

For the 13 weeks to 24 December 2022 it said group revenues were up by 12.3% to £1.57bn.

Total B&M UK fascia revenue in was up 10.3% YoY, with one-year like-for-like revenue increasing by 6.4%, reversing the 6.2% like-for-like decline in the same quarter last year.

It said customer transaction numbers remained strong, with good performance across all B&M UK categories, both in grocery and general merchandise.

It saw “excellent” sell-through in key general merchandise ranges, which supported improved gross margin performance, while robust stock discipline allowed stock reduction of circa £100m year-on-year.

It also saw strong sales numbers at its Heron Foods grocery chain, with revenues up 22.5% from last year.

Meanwhile, trading momentum in B&M France has continued through Q3, with revenue up 24.9%.

As a result of the strong quarterly growth, full year adjusted group EBITDA is now expected to be between £560m and £580m, up from current analysts’ consensus estimate of £557m.

CEO Alex Russo commented: “Our strong momentum throughout the Golden Quarter across the businesses demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail execution.

“Despite the challenging macroeconomic environment, we will continue to work hard to help both existing and new customers manage the cost-of-living crisis. The business has exited the quarter well and will remain focused on disciplined execution.”

B&M shares are up 2.1% this morning on the news to 454.6p.

Morning update

Greggs has also posted strong festive trading numbers as it reported its full year sales update this morning.

The food to go chain said sales for its full year were up 23% to £1.51bn with like-for-like sales in company-managed shops were 17.8% higher than sales seen in 2021.

Despite the impact of adverse weather and strikes at the end of 2022, fourth quarter like-for-like sales in company-managed shops grew by 18.2%.

Greggs said this reflected a favourable trading pattern leading into the Christmas period and softer trading conditions in the comparable quarter of 2021 as a result of disruption caused by the omicron variant of coronavirus.

In particular, seasonal lines were in high demand in the fourth quarter, including its festive bake (including its vegan-friendly alternative), shop-baked mince pies and our festive hot drinks including the salted caramel latte.

It said consumer focus on value has seen an increased uptake in use of its app, which rewards customers for their loyalty with free products across our entire range, as well as giving access to features such as click and collect.

Over the year as a whole, it opened 186 new shops (including 70 franchised units) and closed 39, growing the estate to 2,328 shops as at 31 December 2022, 441 of which are franchised shops.

Some 500 shops are now open until 8pm and early-evening is now the group’s fastest growing daypart as its extends availability to both walk-in and delivery customers.

Greggs ended 2022 with a cash position of £191m, supporting plans to invest further in growing both our shop estate and supply chain capacity in the year ahead. The pipeline of new shop opportunities remains “strong” and it expects to open around 150 net new stores again in 2023.

The chain said that, given our strong trading in the year and careful cost control, it anticipates reporting a full year outcome for 2022 in line with previous expectations.

It said it continues to see material cost inflation in the year ahead. However, whilst consumers are clearly seeing pressures, its value offering remains attractive in the food-on-the-go market.

CEO Roisin Currie commented: “I am proud of the progress Greggs made during 2022 in challenging conditions. Our teams did a magnificent job serving customers and managing the growing demand for Greggs products as we expand our shop estate and offer greater availability through digital channels and longer trading hours, whilst continuing to extend our menu to offer more choice.

“We enter 2023 in a strong financial position that will enable us to invest in shops and supply chain capacity to bring Greggs to even more customers across the UK. While market conditions in 2023 will remain challenging, our value-for-money offer of freshly-prepared food and drink is highly relevant as consumers look to manage their budgets without compromising on quality and taste.”

Elsewhere, Naked Wines has announced that non-executive director Justin Apthorp will step down from the board after 35 years at the group, including 21 years of board service, effective immediately.

David Stead, chairman, commented: “I’d like to thank Justin for his dedicated service to the Company, initially as an executive at Majestic Wine, then through his non-executive role as we reshaped the group and delivered significant growth through the pandemic. I wish him all the best for the future.”

On the markets this morning, the FTSE 100 is up another 0.2% to 7,599.3pts.

Early risers include Marks & Spencer, up 5.4% to 138.7p, Associated British Foods, up 3% to 1,722p and Greencore, up 2.6% to 67.9p.

Fallers include FeverTree, down 3.6% to 1,041p, Haleon, down 1.6% to 317.4p and Just Eat, down 1.1% to 1,859.4p. 

Yesterday in the City

Grocery retail names received a share price boost yesterday from Kantar market share data showing strong growth in the run-up to Christmas.

With growth having come under pressure in recent months from the discounters and the cost of living crisis, mainstream and online grocery bounced back in the run-up to Christmas as inflation drove double-digit sales increases.

Ocado was up 9% to 707.2p as it rebounded back to growth, according to the figures, with retail partner M&S up 4% to 131.7p. Strong performances from Sainsbury’s and Tesco saw their shares rise 4.8% to 235.7p and 2.6% to 235p.

Overall, the FTSE 100 rose another 0.4% to 7,585.2pts to add to Tuesday’s strong start to the year.

Other risers included Hotel Chocolat, up 7.1% to 180p, Deliveroo, up 5.4% to 93.6p, B&M European Value Retail, up 5% to 445.2p, DS Smith, up 4.1% to 340.7p, THG, up 3.5% to 48.4p, SSP Group, up 3.1% to 243.6p and Tate & Lyle, up 2.9% to 735.8p.

Fallers included Virgin Wines, down 3.3% to 73.5p, Wynnstay Group, down 1.7% to 589p, Reckitt Benckiser, down 0.8% to 5,760p and Compass Group, down 0.7% to 1,937p.