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The owner of B&M Bargains has hiked its full year profit expectations after sales continued to boom during the second lockdown period this year.
B&M European Value Retail said revenues and margins “have remained strong” in the period since last updating the market on 7 January, despite the uncertainties related to lockdown restrictions in the UK.
Performance in 2021 has been especially strong in its B&M fascia business in the UK.
Accordingly, the group now expects adjusted EBITDA for in 2021 financial year ending 27 March to be in the range of £590m to £620m, stated after the voluntary payment of business rates amounting to approximately £80m.
This guidance has been hiked from a previous range announced on 7 January of £540m to £570m.
However, it notes comparatives will begin to get considerably tough in mid-March due to elevated sales in the period in 2020 driven by consumer stockpiling in the initial stages of the COVID 19 outbreak.
“This, together with the unknown impact of changes to restrictions in 2021, creates significant forecasting challenges which will persist well into the new financial year,” it stated.
“The safety of the Group’s colleagues and customers remains the key priority, whilst working hard to continue to meet customers’ needs. B&M also re-introduced the colleague discount for all NHS workers throughout January 2021.”
B&M shares ave dropped 1.2% to 537.6p despite the raised profits expectations.
Morning update
Marston’s has been forced to ask its bondholders for a number of waivers of its financial convenants to reflect the coronavirus lockdown and the shutting of its pubs until 21 June at the earliest.
It has formally asked holders of its Secured Class A Notes for a “limited number of further technical waivers of its financial covenant” for the second half of 2021 and until January 2022.
It is also seeking an extension of certain other technical waivers and amendments which were agreed to by the holders of its Secured Class A Notes in May last year.
The group has previously received “overwhelming” support from its bondholders for certain waivers and amendments for 2020 within its secured estate, due to the Government’s mandate to temporarily close pubs and restaurants across the UK.
Marston’s said the waivers/amendments being requested are required solely as a consequence of the enforced temporary re-closure of its pubs in England, Scotland and Wales by the UK government and the devolved administrations, as a result of the COVID–19 pandemic measures.
Noteholders have been asked to respond by 24 March and a meeting is scheduled for 26 March 2021.
It insisted that the overall financial and liquidity position of Marston’s and its subsidiaries remains sound – the group had £176m of headroom under its bank facilities as at 2 January 2021.
Marston’s said it remains confident that demand in its pubs will be strong once allowed to fully re-open (albeit with restrictions).
It said its pubs performed well last summer after the first lockdown, outperforming the market in the 13 weeks to 3 October 2020 with like for like sales at the group’s managed and franchised pubs 90% of the previous financial year during the corresponding period.
Agricultural supplies group Wynnstay has completed the purchase of two complementary bolt-on acquisitions that strategically expand the group’s presence in the eastern side of the UK, where it is less established.
The acquisitions comprise the Agricultural division of the Armstrong Richardson Group, the family-owned business that has been serving the rural and agricultural communities in the North East of England since 1925, and the fertiliser manufacturing business and assets of HELM Great Britain, part of HELM Group, the German multi-national chemicals company.
The Agricultural division of AR Group supplies a wide range of agricultural inputs for arable and livestock farmers, in particular seed, fertiliser and feed, together with grain trading services. It also owns the Yorkshire Green grass seed brand, known for its speciality seeds.
The division’s managerial staff, except the family director, will transfer to Wynnstay. Wynnstay said the acquisition opens up a new trading area and farming customers, in line with strategic growth plans.
HGBF is based at the inland Port of Howden near Goole, and produces and wholesales blended fertiliser. Its acquisition increases Wynnstay’s blended fertiliser manufacturing capacity and extends the group’s geographic reach in the South Yorkshire region.
CEO Gareth Davies commented: “These are highly complementary acquisitions, which expand our presence on the eastern side of the country, and add modern blended-fertiliser production facilities.
“They bring new customers to the Group and staff with significant experience and local knowledge. We are delighted to welcome them to Wynnstay, and look forward to working with them to develop the opportunities ahead.”
Elsewhere, Supermarket Income REIT has announced the acquisition of a Tesco supermarket in Prestatyn, North Wales from Ediston Property Investment Company for £26.5 million (excluding acquisition costs) representing a net initial yield of 5.3%.
Developed in 2013, the 6-acre site is prominently located in the town centre and comprises a 46,000 sq ft net sales area supermarket with 455 car parking spaces and an 8-pump petrol filling station.
It is being acquired with an unexpired lease term of 12 years, with 5-yearly, upwards only, RPI-linked rent reviews (subject to a 5.0% cap and a 1.0% floor). The store also forms a key part of Tesco’s online grocery fulfilment network in the region.
Ben Green, Director of Atrato Capital Limited, the Investment Adviser to Supermarket Income REIT, said: “This omnichannel Tesco has attractive lease terms and strong trading fundamentals. The acquisition is our first in Wales, providing further geographic diversification to our existing portfolio.”
Meanwhile, the property investor is proposing to raise a further £100m through the placement of new shares to fund further acquisition opportunities.
The issue price of 106 pence per share represents a discount of 3.2 percent to the closing price of 109.5 pence share on 3 March 2021.
The proceeds will be used to fund “a number of attractive acquisition opportunities across the marketplace”.
These include four assets with an aggregate value of approximately £230m and a further pipeline of nine assets with an aggregate value of approximately £184m.
The company said the £100 million target issue size, together with associated debt financing, should enable it to purchase some of the target assets.
If the target issue size is exceeded, the company will consider the possibility of acquiring additional assets in the pipeline.
On the markets this morning, the FTSE 100 is back down 0.7% to 6,627.1pts.
Risers this morning include Nichols, up 4.6% to 1,150p, Devro, up 3.2% to 192p and Wynnstay, up 2.4% to 494.3p.
Fallers include McColl’s Retail Group, down 6% to 35p, Hotel Chocolat, down 2.2% to 384p and Just Eat Takeaway.com, down 2.1% to 6,626p.
Yesterday in the City
The FTSE 100 closed up 0.9% to 6,675.5pts yesterday as the City welcomed the 2021 Budget despite the future hike in corporation tax for larger firms.
Risers included a number of beneficiaries of the extension of business rates relief, including WH Smith, up 4.7% to 1,925p, Hotel Chocolat, up 3.3% to 392.5p, McColl’s Retail Group, up 2.3% to 37.3p and Marks & Spencer, up 2.2% to 148.5p.
Other risers included Total Produce, up 5.1% to 178.6p, C&C Group, up 4.1% to 277p, DS Smith, up 3.5% to 417p, Glanbia, up 2.4% to €11.47 and Compass Group, up 2.4% to 1,561p.
The day’s fallers included Devro, down 4.1% to 186p, Naked Wines, down 2.3% to 732p, Ocado, down 2.1% to 2,138p, Just Eat Takeaway.com, down 2.1% to 6,770p and Kerry Group, down 1.6% to €105.60.
Nichols fell 2.2% to 1,100 after posting its full year results yesterday.
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