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17 November 2015
B&M European Value Retail (BME) shares are being considered anything but a bargain this morning after interim results failed to inspire despite swinging to a profit in the first half of the year and raising its interim dividend by a whopping 78%. This is despite confirmation that the discount retailers continued to win the supermarket battle, with the latest Kantar data showing Aldi and Lidl for the first time taking a landmark 10% of all UK grocery shopping, double what it was 3 years ago and highlighting how cost-conscious Brits are shunning incumbents in favour of value. What is likely weighing is a subtle reference to ‘operational challenges’ after opening almost 2 stores per week since March (double the prior rate) and 2 new service centres impacting service levels to stores. Investors are thus concerned that expansion has been rushed ahead of the key Christmas period and that the new year update might show an impact. Shares broken below the 200-day MA – which had been supportive since last August – to trade 6-month lows, but still showing mid-teen percentage gains versus its IPO price mid-last year.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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