Member Info for Senator1

None of this is correct either. There is no way on gods earth the benefit of Jersey over Lux is £200-450M annually, this is totally ridiculous and just all made up rubbish. Appendix 1 of EGM notice gives the actual benefit and it has 2 main benefits. 1.) no 15% WHT on DVDs and 2.) the rules that permit buybacks are quite accounting technical in Lux and these dont apply in Jersey. In essence the real benefit is they are signalling buybacks rather than special DVDs are coming. There might be some adm savings but they are peanuts i.e putting the directors up in Jersey for board meetings probably cheaper there than Lux and bringing them out but in scheme of things peanuts, nowhere near £250-400M. if that was scale of saving you could be sure they would give it in the circular. That range is pure fantasy.

........"The block listing means B&M has pre-approved a pool of shares...." it doesn't mean this. The block listing means they are listing a block of shares simple as that. They are not pre-approving, they are doing it. The dilution is straight away, the fact that the beneficiary changes over time, just like when you sell shares is irrelevant. However, in this case the dilution is irrelevant as the # of shares is tiny in comparison to existing. You make it sound like its all future tense. Its all efffective the date they gave.

Incorrect. They are issued as a block to some sort of employee trust who will in due course award them to designated employees but they are issued at time of listing request, so share count goes up straight away but in any event this number of shares is irrelevant , given there is over 1 bn issued.

£25M buyback in context of £1.1bn market cap is almost irrelevant but that is all they can afford. Forward PE at arounf 12.7x is just ahead of average for uk retailers excl ocado and the eps growth will probably be just the buyback plus the non recurrings, so maybe 5% that gives it a PEG of 2.5 only behind WH Smith, Currys & Dunelm. Compared to BME with a PE less than 7x and which has a slightly higher operating margin. pets isnt expensive but some of the other retailers are so cheap. The best of them, Next trades at 17 x forward so that puts a cap of £3.4 on Pets. Next has an op margin of 18% so wont get there.

Top 3 shareholders all American, absence of UK or Ireland above 5%. When you dont have support from the origins of the business which has world leading brands, you know you have a problem. The number 1 is just an index tracker through ETFs and like so its up to Capital Group to carry the flag for the fundamentals. How did the UK and ireland let this happen?

In 2024 Diageo net to shareholders was $3.87bn on shareholders equity of $10bn odd, a 38% RoE. Net income in 1H 25 was down 12% on 2024, if we assume the same in 2H 25 as worst case that will give a net of $3.39bn that is still well above 30% and on those numbers thats a PE of 17x (my 2025 eps of 1.13 in GBP which is very conservative). So if we use Dge as a read through that if you do 30% odd RoE, you get rewarded with a 17x PE. If thats the case and i was part of management I would seriously question the value of a public listing, at least in the UK. Anyone considering a listing in the Uk needs to know the bar is so high not because these are the right hurdles but because no one is interested in the UK markets. The companies are only interesting when they are on someones acquistion list or are taken private. DGE as a take private, I bet that has been run by many PE houses. $64bn EV trade, thats interesting but only for the big dogs and that means America!

They are growing. 2021-2025 UK stores up 14%, France up 30%, Heron +12%. Its not tech growth as this is bricks and mortar retailing and before you go mad on stores you need the infrastructure to support it. they have only just opened their new import centre at Ellsemere which will accelerate growth if they find the right places, particularly in the UK where they have 777 stores. It is much better to give cash back to shareholders rather than hold it earning interest. They dont typically buy the buildings but lease them so they are capital light and can use their capital for rennovations and getting the right layout so they dont need lots of retained cash. thats a good thing. they have now the infrastructure in place to support accelerated growth but the UK economy is in a hole so that would be silly right now. Steady growth, be opportunistic, focus on costs and using the strength of sterling and having the best buyers they can afford. Their return on capital employed is like a saas company because they are capital light but they have the valuation of an independent corner shop.

Wise this morning produced a great update. Volume up double digits, value up, but cross boder take down and stock hit 8% plus. No wonder they are leaving LSE for US a primary listing. Uk is irrelevant and cheap by any international comparison. When the US see the equiv of their Treasury secretary crying on the job no wonder they are so cynical of anything in the UK and think of it as takeover fodder only.

Of course, the notice is out but AGM is in Lux so u are probably too late for mail vote unless you turn up in person

If approved on July 22nd they are getting authority to purchase 10% of the outstanding shares or just over £200M. This authority to be in place for 12 months. They dont say this is contingent on the redomicile but its probably irrelevant as am sure will have the redomicile done in next few months.

JD's historic EV/Adj Ebitda is 5.71x. IMO you should never make ev/ebitda comparisons because of the way IFRS 16 works. JD by their own calc has over £3bn of leases, BME £1.4bn. JD paid £641M in their last 12 months on leases, BME £253m so clearly JD paying more as their locations more expensive.

Not all stocks at 15% plus earnings yield are undervalued but BME is. Yes they are experiencing margin issues in Q1 but they will make it up by selling more. Its too early to say whether Q1 margin problems persist. Once they redomicile they will do buybacks rather than specials and they have the financial resources to do £100-£150M or about 5% of shares and thats on a conservative basis.

JD did eps of 9.5p last 12 months, sp=83p and so historic PE=8.7x , compared to 6.8x for BME. Your calc on JD ignores £641M of lease payments so no wonder you think it cheap. BME is definitively cheap when you make a valid comparison rather than the made up ev/ebitda.

The UT trades are just the shares executed in the closing auction. You cant assume one entity on either side i.e an institution. The algo matches the bids and offers to maximise volume traded and the UT is that amount. that simple, the uncrossing trade, aggregated amount traded in closing auction.

To put in context how undervalued this stock is consider this. Over the last 6 years (2020-2025) BME has generated operating cash of £4.655 billion, paid £591m in tax, made £1.35bn in lease payments, net capex £453m and paid £2.2bn in Dividends leaving cash at the end of 2025 of £217M. Of course it is backward looking but BME has paid out in DVDs in 6 years , 96% of its current market cap. It's biggest DVD year was 2021 when it paid out £697M, the year after Covid, making up for the £76m paid in 2020. For the 6 years the simple average DVD is £370M. What can it do for 2026? It can definitely do the 15p ordinary as apart from lease payments it has no Bond maturities until Nov 28. I think it will do the 15p DVD which is a current 6.5% yield and then a £100m -£150M buyback to manage eps and assuming they complete the redomicile. In July they will repay the £150M high yield bond with the maturing MM deposit which has been in place for quite a while in preparation.

SG2025 I wouldnt be a fan of cutting back on net new stores in UK. They need to get adj ebitda to 12-13% and easiest way to do this is with more throughput which drives better GM and leverages the overhead base. They need to keep expanding to increase margins but of course do it in a controlled way. They mostly just lease the store so the risk is minimal if they negotiate breaks in lease.

Based on my cflo forecasts £100M is about right, 5% of market cap, assuming they continue with new stores, which I think they should. they are sub scale in the UK.

Lastly, due to lease accounting you cannot attribute financing cost to gross debt as part of the fin costs are made up under ifrs 16 in attempt to break lease cost to P&I. If you want to do this calc you can take other fin costs /bank, cap market debt or total fin cost to bank, cap market debt plus lease obligations. If you do this it will half the debt cost you reference. In short, their debt cost is fine.

A business on an ebitda margin of 11% MUST buy well, that is why retail has such high operating leverage. There is no real safety margin and you must put more stuff through the chain to drive improvements in margin i.e run harder and faster for small incremental gains. As a discounter thats their world. However, while there is no real money in the UK right now that helps the discounters and the other big tailwind is sterling against the yuan. Im sure they buy 9-12 months forward and this is the best its been over the last 10 years. If they are laser focused on costs, buy well from China & use the Trump uncertainty to their advantage, focus all excess cash to buybacks rather than divs, the sp change could be very rapid. The new CEO made a huge mistake by not quantifying the cost of recovering the UK lfl. He has left the market to guess and that is NEVER a good idea. Rookie mistake. The market punished B&M for it, hopefully the lesson got through. We would have been much better of to say what the extra £60M in sales cost him in adj EBITDA. The market is THE BEST financial analyst out there, to think you can get way with stuff like that is seriously dumb. Probably not all his fault, but he is the one who spoke and hes the boss so for me most of the blame falls on his shoulders.

As I see it there are 2 potential triggers for a rerating in this share price.

1.) better GP merchandise hitting the stores. New CEO has said this is coming. Will this be enough to combat the increased staff costs, who knows but its a positive nonetheless and strength of sterling. We wont see results of this until Nov.

2.) Get on with the redomicile and approve a £100M share buyback. The internal finance and legal team should make this their number one goal and just get it done. They have been going on about this too long. More urgency and energy needed. Hopefully the new CEO can make the internals feel the pressure on this task.

Had a look at Q1 LfL and total sales in B&M UK for last 5 years and of the last 5 years Q1 26 is the second highest at 1.3%, lowest was Q1 23 at -9.1% and highest Q1 24 at 9.2%. Three of last 5 years BMUK lfl Q1 was negative (25,23 and 2022). On total sales Q1 26 was second highest at 4.7%, behind Q1 24 at 11.3% and lowest Q1 23 at -6%. So this paranoia on lfl sales in the UK isnt the reason behind the low share price, Q1 22, Q1 23 and Q1 25 were much worse. I think the market didnt like the fairly obvious way B&m kept LfL up in Q1 by dropping prices to make sure they had a positive LfL and how damaging this was to the P&L. As usual in the trading update we got no numbers on Adj EBITDA or Adj Op profit. For last few years Adj EBITDA has been declining but last year was still just above 11% for full year (lower in 1H, 10.36% and higher in second half 11.82%). The new CEO has said that he has sight on an improved gross on the new products coming in which will feed through to adj ebitda minus the increased employee cost. B&M normally pass F/X gains back to customers in lower prices and with sterling strength against the yuan this is a tailwind for rest of year. Q1 26 total sales were £60M higher than Q1 25 which even if the margin is lower (which is normal for them) to deliver the same P&L by running harder, which is what they are doing. Diluted eps last year was 33.5p thats a historic PE of 6.87 or put another way 14.6% earnings yield. Even if they just deliver another 33.5p this year by running at a lower margin but selling more it is still a cheap stock. Add this to fact it is not yet a forgone conclusion that they have to compromise margin for the year as a whole. Of course they did in Q1 but that is normal for them. I would be amazed if they havent been able to get great deals on general merchandise from China over the last few months and that will come in to the accounts over the next 9 months as it comes to the stores. Thats before they start buying stock to ensure they grow EPS because this is a very cash generative business.

Since start of year sterling up 5.75% against Chinese yuan and 2.47% in last year so this is a tailwind as CEO mentioned. He needs to get his buyers to get Yuan price down as well. In the last 10 years the sterling yuan exchange rate has never been more favourable. In a 33% gross margin business to get 3-5% fx gains is massive and then Trump making life difficult for the Chinese, surely B&M should be the UK's main beneficiary. Strange, more wasnt said on this. For discount retailing nothing is more important than the buying price. If the buyers have made a mess of this, given the clear tailwinds, they should be the first to go.

Lfl 1.3% with selling price deflation and hence lower GP means volume was up more, my guess around 4%. This shows they have a market, they just need to buy right at a level that allows them to keep prices low. CEO has sight on GP improvement in second half. If this is from better buying in that bodes well, if it is from increasing selling prices less so. This market is clearly very price conscious so buying at right price, the main driver and then as CEO said keeping process simple to get it to stores. CEO said f/x and freight costs are now tailwind in to 2H. Just need him to be clearer on the buy in price, can they see same tailwind on the foreign currency price. If China is overstocked, why isnt this visible to B&M?

GIC & Capital Group increased shareholding in Feb, Fidelity in July & CEO spends near £500K in June. Weather has been good so I expect strong update overall and loads of positivity from CEO.

Cash cow, really!

Operating cflo: £311M

Acq of assets: £240M

Lease Principal: £57M

leaves £14M and they paid £107M dividend. Definitely not a cash cow in 2024 and likely not in 2025. If you are buying it because its a cash cow, you need to reconsider.

2.4% and 2.8% managed lfl sales growth in q1 and q2 respectively is below the Jan and May prices increases of circa 8% so volume is declining, circa 5%. So they have to open more stores to make it up but opening more stores has upfront costs and so it becomes a tough cycle. For every £100 of sales GRG makes £7 net pre-exceptionals. Like a hampster on a thread wheel. When volume drops in these high operating leverage businesses it can be a real problem as you are forced to expand to keep balls in the air. 15x forward PE isnt cheap given this outlook.