B&M European Value Retail (LSE:BME) on Thursday reported a return to UK like-for-like sales growth in its interim results for the 26 weeks to 26 September, with group revenue up 3.6% to £2,848m against £2,749m a year earlier.
The London-listed value retailer, which operates the B&M general merchandise chain, Heron Foods and a growing French business, said adjusted profit before tax rose 16.6% to £121m from £103m in the same period last year, while statutory profit before tax climbed 53.7% to £115m from £75m.
B&M UK total sales grew 2.4%, with like-for-like sales up 0.4% overall and 3.2% in the second quarter, a swing the company attributed to its "Back to B&M Basics" programme of sharper pricing, improved on-shelf availability, stronger promotions and SKU reduction.
B&M France delivered 13.7% total sales growth and like-for-like growth of 5.9% across the half, accelerating further to 6.5% in the second quarter, while Heron Foods grew total sales 3.0% with like-for-like sales up 2.9%.
Group gross margin rose 67 basis points to 37.2%, driven by a recovery in UK trading gross margin within General Merchandise.
Group adjusted EBITDA on a pre-IFRS 16 basis rose 6.0% to £203m from £191m, with the margin edging up to 7.1% from 7.0%.
Net debt fell to £613m from £859m a year earlier, with leverage on a pre-IFRS 16 adjusted EBITDA basis down to 1.3x from 1.6x, within the company's target range of 1.0x to 1.5x.
Post-tax free cash flow jumped to £132m from £51m, which the company linked to higher cash profit, accelerated working capital benefits and the phasing of capital spending into the second half.
The board declared an interim dividend of 3.6p per share, up from 3.5p a year earlier, payable on 18 December to shareholders on the register on 20 November.
"Back to B&M Basics is starting to deliver," said chief executive Tjeerd Jegen, pointing to the second-quarter UK like-for-like performance of 3.2% as evidence "the first phase of our strategy is working."
The company introduced FY27 financial guidance, following its move flagged at the FY26 results to shift to adjusted profit before tax as its primary guidance metric: it expects group adjusted EBITDA (pre-IFRS 16) of £450m to £500m, against £459m in FY26, and group adjusted profit before tax of £280m to £330m, against £284m in FY26.
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Jegen said early trading in the "Golden Quarter" has been positive across all three operating businesses, with continued like-for-like growth at B&M UK in both FMCG and General Merchandise.
The company opened four net new stores across the group in the first half (11 gross), with nine net openings in France offset by two net closures in B&M UK and three in Heron Foods; it now expects 15 to 20 gross UK store openings in FY27, down from previous guidance of 25 to 35, as it redirects capital toward re-laying and refitting existing stores under a new "B&M 2.0" format trialled in Wigan from 28 August.
In France, the company raised its FY27 new store guidance to 15 to 20 openings from the 15 guided at the FY26 results, citing a market that "remains several years behind the UK in market consolidation."
Michael Fletcher started as managing director of Heron Foods on 2 November, succeeding Tony Dobbs, who is stepping down after 35 years with the business; incoming chief financial officer Atheeq Akbar, whose appointment the board announced in June, will start on 25 January 2027, succeeding interim CFO Peter Waterhouse.
