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B&M European Value Retail (BME), owner of B&M Bargains, has reported flat UK like-for-like sales in its first quarter trading update this morning.

For the 13 weeks to 25 June total group revenue increased by 21.5% to £554.8m, driven by new stores.

During the quarter 12 store opened in the UK and 5 in Germany from the pipeline of 50 new stores planned for the UK and 19 for Germany for this financial year.

The UK business’ sales revenue for the 13 week period increased by 21.3% to £508.1m. UK Like-for-like sales were 0.0%, although on an underlying basis (stripping out stores that are within a three mile radius of a newly opened B&M store) they were up 1.7% for the 13 weeks.

Simon Arora, chief executive, said: “Against a highly competitive backdrop, our robust and compelling retail business model delivered 21% growth over this first quarter. We have a well-defined and clear strategy for further growth and for B&M it remains ‘business as usual’ despite broader general economic uncertainty.

“Our outstanding value for money proposition to customers leaves us well-placed to continue to win market share.”

B&M said it has “satisfactory” currency hedging in place through to the end of the Christmas 2017 period. “Ongoing exchange rate volatility may affect gross margin in FY2018 until we return to more stable general economic conditions,” it stated.

Morning update

After the markets closed last night, McColls Retail Group (MCLS) announced it had agreed to buy 298 of Co-op’s smaller food stores for £117m.

The sale of the stores, which average 1,700 sq ft, was part of its growth strategy focussing on convenience and own-brand, The Co-op said. Proceeds from the sale will be re-invested to further deliver this strategy, which had already made it the most frequently visited food retailer in the UK, the Co-op said.

The deal is now subject to approval from the CMA and McColl’s shareholders.

The sale will leave the Co-op with a net store estate of about 2,600 at the end of the year, while boosting McColl’s estate from its current 933 to 1,231 stores.

See the full story on The Grocer here.

The FTSE 100 is up 0.7% to 6,716pts this morning ahead of today’s meeting by the Bank of England’s Monetary Policy Committee which could agree to cut UK interest rates from 0.5% for the first time in seven years today to ward off worries over a post-Brexit recession.

McColl’s has soard 16.4% to 153p this morning - its highest level since early June - on the news of its Co-op stores deal.

Other risers include Premier Foods (PFD), up 2.2% to 46.3p, Hotel Chocolat (HOTC), up 1.7% to 176.5p, Morrisons (MRW), up 1.6% to 186.5p and Ocado (OCDO), up 1.8% to 258.8p.

Yesterday in the City

The FTSE 100 remained unusually calm for the second consecutive day, edging down 10pts (0.2%) to 6,670.4pts on the day Theresa May became prime minister of the UK.

The day’s big corporate news was Poundland’s acceptance of a 222p per share offer from Steinhoff, valuing the business at £597m.

Unsurprisingly Poundland shares were boosted by the news, rising 12.6% to 220.75p amidst widespread expectation that shareholders will approve the deal.

The day’s other big M&A story was McColl’s buying a 298 portfolio of food stores from the Co-op. Despite being announced after the close of trading, McColl’s was up 2.3% during the day yesterday to 131.5p.

Also on the rise were FeverTree Drinks (FEVR) up 1.5% to 736.5p and Marks & Spencer (MKS), up 1.2% to 736.5p.

Fallers once more included stevia producer PureCircle (PURE), down 2.2% to 178.1p, while McBride was down 1.9% to 152p, AG Barr (BAG), down 1.8% to 520p, Dairy Crest (DCG) down 1.2% to 566p and Britvic (BVIC) down 1.3% to 611p.

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