City round up: B&M store openings; strong volumes at McBride; record trading at Northcoders
Group revenues at B&M increased 2.4%, driven by volume and a “disciplined” store opening programme across the three businesses in the UK and France, the company said in a trading statement this morning.
The Liverpool headquartered discount retailer made strong, profitable progress with 19 gross stores opened in Q1, on track for 45 gross new store openings in the year. All stores opened since last year are performing ahead of expectations, it said.
In France the company added 2 new stores in Q1 and remain on track for 11 new stores this year
Alex Russo, Chief Executive, said: “The growth fundamentals of our business are strong, with a highly disciplined approach on pricing, product and high operational standards. We continue to offer our customers exceptional value at a time when household incomes are under pressure. Ahead of Q2, we have launched our Everyday Value range with more than 500 new lines in core categories across home, electrical and pet in the UK and France. As we transition towards Autumn/Winter in the months ahead, our relentless focus on Everyday Low Price and Everyday Low Cost will ensure we continue to serve our customers well.”
Analysts at Panmure Liberum issued a strong buy notice on the shares, following the trading update, which they described as “marginally better than what we think most had feared”.
They said the current valuation is very low at ten times earnings, describing the shares as “ridiculously cheap for a stock where forecast is so low”.
Dan Coatsworth, analyst at AJ Bell was more critical however, describing the UK operations as “lacklustre” and said the trading down catalyst had “played out”.
“Some people are now trading back up, while others remain under financial pressure, all of which makes it harder for B&M to sustain strong levels of sales. Headline revenue might be going up, but that’s partly to do with opening new stores,” he said.
“Competition is fierce and unless B&M can produce a radical new idea to accelerate sales growth, the company might be wading through mud for some time.”
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McBride PLC
McBride plc, the Manchester-based manufacturer and supplier of private label cleaning products said in a trading update this morning that revenues were 6.2% higher in the twelve months to the end of 30 June 2024.
It expects profits to be in line with the recently upgraded current market expectations.
Group revenue was 6.2% higher for the full year on a constant currency basis, and 5.2% higher at reported rates, primarily driven by strong volumes, with overall sales volumes up 5.7% and private label volumes up 7.2%.
The company said the improvement in demand for was driven by a combination of business wins and strong demand increases on existing private label contracts.
Contract manufacturing volumes grew 13.4% in the second half, driven by fourth quarter volumes from the commencement of a significant new long-term contract.
The Group’s improved profitability and continued focus on net debt reduction resulted in net debt closing at £131.5m, a £14.2m reduction versus the half year end (31 December 2023: £145.7m) and a £35.0m reduction versus the prior year end (30 June 2023: £166.5m). The Group’s closing liquidity of £98.3m (31 December 2023: £85.0m) continues to improve and is significantly higher than the minimum liquidity requirement of £15.0m applicable under the Group’s financing arrangements.
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Northcoders, a coding training specialist with bases in Leeds, Manchester, Birmingham and Newcastle, has enjoyed record demand in H1 2024, delivering a 26% increase in revenues during the period of £4.4m (H1 2023: £3.5m).
It says this has been driven by further brand expansion across the UK as well as continued robust underlying demand for the company’s technology training services.
The group notes it continues to have a strong balance sheet position with a £1.3m cash balance at 30 June 2024.
Chris Hill, CEO, said: “We are really pleased with our performance in the first half of 2024 and achieving this is testament to our strategic initiatives and the hard work of our ambitious team.
“The entrepreneurial culture runs top to bottom at Northcoders and the proactivity within our teams is driving future success.
“The successful rebranding of our Corporate Solutions division to COUNTER is an important step forward for our challenger brand, and we are confident the growing reputation of Northcoders’ quality technology training across the UK will support future growth for the division.
“As we mature as a business, I am excited for the future and confident in our ability to create life-changing opportunities for individuals from all walks of life.”
Northcoders adds that the second half of FY 2024 has started well, with its largest ever £10m Department for Education contract helping to continue to drive profitability.
Looking ahead, the business says it is confident in delivering further growth in H2 2024.
For the first time at this stage in the year, the group has 100% access to revenue and contracted visibility of the market expectations for FY 2024 revenue (30 June 2023: 70% visibility).
