B&M (BMELN; Ba1/BB+; Stable) 1Q (to June) trading update

Only a trading update so limited info but headline is soft at -3.5% same store sales for UK. Margin comments & cash flow outlook are positive. We will wait for earnings call but B&M28s value view was on RV, broader LT growth/expansion plans and BS discipline (targets net ex. leases of 1-1.5x which is rating eqv. of gross ~3x). The 30s being issued at UKT+408/8.125% will always be a head-scratcher for us - those that went in then have netted over 11% in total returns in 8-months.

• 1Q B&M UK revenue were £1.1b (+1.5%) but Like for Like in UK was -3.5% decline.
• France was £0.13b (+7.5%) and Heron Foods £0.14b (+2.7%). Reminder Heron is a UK discount supermarket chain it acquired in 2017 for £152m.
• It left group at £1.3b (+2.4%).
• It opened 19 stores in UK and still on track for 45 this year. It added 2 in France and on track for 11.
• Trading update so it's not giving margins but says "Q1 gross margin performance has been strong and in-line with expectations".
• 1H results which it says will come with FY guidance, comes 14th November