B&M European Value Retail (LON:BME) reported a difficult fiscal 2026 marked by lower profits, margin pressure and cost inflation, but management said stronger cash generation and reduced leverage give the discount retailer flexibility to invest in growth and its existing store…
tate. Chief Executive Officer Tjeerd Jegen said adjusted EBITDA came in at “the midpoint” of current guidance at GBP 459 million, while leverage returned to the company’s target range at 1.4 times
He said that provided “a good foundation for driving future growth and, over time, shareholder returns.” Interim Chief Financial Officer Peter Waterhouse said group revenue rose 3.6%, driven by store expansion, while like-for-like sales in B&M’s U.K. business were flat. Profit before tax was GBP 284 million, and adjusted EBITDA was down significantly from the prior year because of trading margin pressure and higher operating costs. “It’s been a tough year in relation to profitability with margin cost line pressures,” Waterhouse said. “However, we’ve had robust cash flow, healthy leverage, and that drives investment flexibility for the future.” Margins Hit by Price Investment, Clearance and Cost Inflation Waterhouse said the year’s profit decline reflected two main pressures: weaker trading margins and increased operating costs. In FMCG, B&M deliberately invested in pricing to sharpen its value proposition on key lines, a strategy the company had flagged in its third-quarter trading update.
In general merchandise, margins were affected by bought-in margin pressure and clearance activity, though Waterhouse said both areas should ease in fiscal 2027. Operating costs were also a major drag. Waterhouse said statutory changes, including National Insurance, National Minimum Wage and the new Extended Producer Responsibility tax, represented GBP 66 million of headwinds that were “not sufficiently mitigated” in fiscal 2026.