TIDMBME
RNS Number : 8646I
B&M European Value Retail S.A.
22 June 2017
22 June 2017
B&M European Value Retail S.A.
Annual Report & Accounts 2017, Notice of Annual General
Meeting
B&M European Value Retail S.A. (the "Company"), the UK's
leading multi-price value retailer, announces that it has posted to
shareholders today:
1. The Company's Annual Report and Financial Statements for the
year ended 25 March 2017 ("Annual Report & Accounts 2017");
and
2. The Notice of the Annual General Meeting of the Company
("AGM").
Copies of the Annual Report & Accounts 2017 and the Notice
of AGM will shortly be available for inspection at
www.morningstar.co.uk/uk/nsm , copies of them are also available on
the investors section of the Company's website at
www.bandmretail.com/investors/agm.aspx
The AGM will be held at the Sofitel Luxembourg Europe, 4, Rue du
Fort Niedergrünewald, L-2226 Luxembourg, Grand-Duchy of Luxembourg
on Friday 28 July 2017 at 12:00 noon (CET).
Bondholders are not entitled to vote but may attend and speak at
the AGM.
Annual General Meeting
In accordance with Disclosure and Transparency Rule 6.3.5R (DTR
6.3.5R) and the requirements which it imposes on how to make public
annual financial reports, the following information in the Appendix
1 to this announcement is extracted from the Annual Report &
Accounts 2017 and should be read in conjunction with the Company's
preliminary results annnouncement for the year ended 25 March 2017
issued on 25 May 2017, which contained a management report and a
set of the Company's consolidated financial statements. That
information, together with the information set out in the Appendix
1 below (each of which are available at
www.bandmretail.com/investors/regulatory-news/search-regulatory-news.aspx)
constitutes the material required by DTR 6.3.5R to be communicated
to the media in unedited full text through a Regulatory Information
Service.
This material is not a substitute for reading the Annual Report
& Accounts 2017 in its entirety. Terms used, but not otherwised
defined in this announcement, have the meanings given to them in
the Annual Report & Accounts 2017.
Enquiries
B&M European Value Retail S.A.
For further information please contact +44 (0) 151 728 5400
Simon Arora, Chief Executive
Paul McDonald, Chief Financial Officer
Steve Webb, Investor Relations Director
investor.relations@bandmretail.com
Media
For media please contact +44 (0) 207 379 5151
Maitland
Robbie Hynes
Tom Eckersley
bmstores-maitland@maitland.co.uk
APPIX 1
The principal risks and uncertainties relating to the Company
are as set out in pages 28 to 31 inclusive of the "Principal risks
and uncertainties" section of the Annual Report & Accounts
2017.
The following is extracted in full and unedited text from the
Annual Report & Accounts 2017 and is repeated here solely for
the purpose of complying with DTR 6.3.5R.
PRINCIPAL RISKS AND UNCERTAINTIES
Risks management
The following principal risks and uncertainties could have an
impact on our business model and strategy. Mitigating steps aimed
at managing and reducing those impacts are being employed by the
Group as summarised below.
Overall responsibility
Risks and mitigation are reviewed as part of the oversight by
the Audit & Risk Committee of the system of internal controls
and reported on to the Board which takes overall responsibility for
risk management.
The Internal Audit function of the Group reports on the
effectiveness of internal control procedures to the Audit &
Risk Committee as part of annual internal audit plan, taking into
account current business risks.
Risk management
------------------
Identify and Action plan Implementation
evaluate The Board oversees The responsibility
The responsibility the risk management for implementation
for identifying of the Group. of processes and
and evaluating It evaluates controls in relation
new and emerging the recommendations to the management
risks and mitigating made by the Audit of risk is delegated
actions lies & Risk Committee by the Board to
with management. and determines the executive
The Audit & Risk the framework and operational
Committee, with of the type of senior management
the support of controls and of the UK and
the Internal mitigating steps German businesses.
Audit department required to be The Internal Audit
and the General implemented, department reports
Counsel, is responsible in the context on the progress
for monitoring of how those of implementation
risks and mitigating risks could impact by management
actions and for the overall objectives of recommendations
reporting matters of the business made to them,
of concern to and risk appetite. to the Audit &
the Board. Risk Committee
at each meeting
during the year,
being a
continuous cycle
of review.
Risk appetite
The Group's framework for managing its consideration of risk
appetite forms part of the annual risk management cycle and is used
to drive and inform actions undertaken in response to the principal
risks identified by the Board. Within this framework, the Group's
appetite for risk is defined with reference to the expectations of
the Board for both commercial opportunity and internal control and
it is used to inform the Group's annual internal audit plan.
Category Tolerance
of risk Medium
Strategic Low to medium
Operatinal Low
Financial Extremely low
Compliance
Changes in principal risks
Following review by the Board this year:
-- the UK's exit from -- during the last year
the EU has been added a new warehouse management
as a principal risk as system ('WMS') was implemented
there are uncertainties as a pilot initially
in the UK generally in at 1 of our 6 UK warehouses.
relation to the outcome The pilot implementation
of the exit negotiations was successful and the
and how that might affect system is now in the
matters such as the economic process of being rolled
and regulatory environment, out across the rest of
customs duties, availability the UK warehousing estate.
and cost of labour in The new WMS system is
the UK; no longer considered
to be a principal risk
going forward.
Risk Risk
Type Number Description Risk Mitigations
----------------- --------- ------------------------ ------------------------------------- ------
Competition 1 The Group -- Continuous monitoring ->
operates of competitor pricing
in a highly and product offering.
competitive -- Development of new
retail market product ranges within
both in the the product categories
UK and Germany to identify new market
and this opportunities to target
could materially new customers.
impact the
Group's profitability
and limit
the growth
opportunities.
----------------- --------- ------------------------ ------------------------------------- ------
Economic 2 A reduction -- We offer a range
environment in consumer of products and price ->
confidence points for consumers
resulting which allows them to
in a fall trade up and down.
in customer -- We maintain a low
spending cost business model
as a result that allows us to maintain
of the prevailing our selling prices as
macro- economic low as possible.
conditions -- We have an extensive
in the markets forecasting process
in which that enables actions
we operate. to be undertaken reflecting
the economic conditions.
----------------- --------- ------------------------ ------------------------------------- ------
IT systems, 3 The Group -- All critical business
cyber is reliant systems have third party
security upon key maintenance contracts
and IT systems, in place and are industry
business and disruption standard.
continuity to these -- We utilise the services
would adversely of a third party IT
affect the consultancy support
businesses to ensure that any investments
operations. made in technology are
Data protection fit for purpose; IT
failure may investments/budgets
lead to a are approved at Board-level.
potential -- We have a disaster
prosecution recovery strategy.
and reputational -- We have an on-going
damage to PCI compliance strategy.
the brand. -- IT Security is monitored
This risk at board level and includes
also encompasses penetration testing
the IT Security and up to date security
risk and software.
the risk -- Significant decisions
of management for the business are
over-ride made by the Group or
of controls. operational boards with
This risk segregation of duties
has increased enforced on key business
as cyber processes, such as the
crime is payables process, and
a threat a robust IT control
to all organisations environment is in place.
and cyber
attacks are
increasing
in scale
and sophistication.
----------------- --------- ------------------------ ------------------------------------- ------
Regulation 4 The Group -- We have a number
and is exposed of policies and codes
compliance to regulatory across the business,
and legislative including a code of
requirements, conduct that incorporates
including an anti-bribery & corruption
those surrounding policy, outlining the
the import mandatory requirements
of goods, within the business.
the Bribery These are communicated
Act, Modern to the staff via an
Slavery Act, employee handbook which
health & is made available to
safety, employment anyone joining the company.
law, data -- Operational management
protection, are responsible for
the environment liaising with the General
and the listing Counsel and external
rules, which advisors where required
could lead to ensure that we identify
to financial and manage any new legislation.
penalties -- We have an internal
and reputational audit function, and
damage. a whistle blowing procedure
This risk and policy which allows
has decreased colleagues to confidentially
as B&M have report any concerns
introduced or inappropriate behaviour
new anti-bribery within the business.
& corruption
measures
which have
been issued
to Buyers
and suppliers.
----------------- --------- ------------------------ ------------------------------------- ------
Credit 5 The Group's -- A treasury policy
risk level of is in place to govern
and indebtedness foreign exchange, interest
liquidity and exposure rate exposure and surplus
to interest cash.
rate and -- Regular weekly cash
currency flow forecasts are produced
rate volatility and monitored.
could impact -- Forward looking cash
the business flow forecasts and covenant
and its growth test forecasts are prepared
plans. to ensure sufficient
This risk liquidity and covenant
has increased headroom exists.
as currency
exchange
rate volatility
has increased
due to the
UK's planned
exit from
the European
Union.
----------------- --------- ------------------------ ------------------------------------- ------
Commodity 6 Escalation -- Freight rates, energy ->
prices/cost of costs and currency are bought
inflation within the forward to mitigate
supply chain volatility and allow
arising from the business to plan
factors such and maintain margins.
as increases -- Wage increases are
in raw material offset where possible
and wage by productivity improvements.
costs. Additionally, -- Forecasts and projections
increased produced by the business
fuel and include the expected
energy costs impact of the national
impacting living wage and therefore
on distribution the Board's strategic
and the store planning takes account
and warehouse of these effects.
overhead
base.
----------------- --------- ------------------------ ------------------------------------- ------
Supply 7 The lead -- An experienced sourcing ->
chain times in team is responsible
the supply for maintaining an efficient
chain could and effective supply
lead to a chain.
greater risk -- A range of alternative
in buying supply sources are maintained
decisions across the product categories
and potential and we are not over
loss of margins reliant on any single
through higher supplier.
markdowns. -- The combination of
Disruption individual buyers and
to the supply supplier employees conduct
chain arising factory visits.
from civil
unrest, natural
disasters,
ethical or
quality standards
failure could
lead to reputational
damage and
a risk that
consumers
may be harmed.
----------------- --------- ------------------------ ------------------------------------- ------
Stock 8 Ineffective -- Highly disciplined ->
management controls SKU count by season
over the and effective and regular
management markdown action on slow
of stock moving product lines.
could impact -- Initial stock orders
on the achievement do not exceed c. 14
of our gross weeks of forecast sales
margin objectives. and action is undertaken
Lack of product after c. 4 weeks of
availability trading to either repeat
could impact the order, refresh the
on working product design or delete
capital and the product line.
cashflows -- Consistent levels
of stock cover by product
category are maintained
through regular reviews
of open to buy, supported
by the disciplined SKU
count.
----------------- --------- ------------------------ ------------------------------------- ------
Infrastructure 9 The Group -- Forward plans are
could suffer in place for additional
the loss warehousing capacity
of one of to support the new store
its warehousing opening programme. The
facilities Group in the UK has
which would 6 separate warehousing
impact short/medium locations and conducts
term trading disaster recovery planning.
and could -- The Group maintains
materially adequate business interruption
impact the and increased cost of
profitability working insurance in
of the business. the event of such a
Failure to loss.
maintain
and invest
in the warehousing
and transport
infrastructure
as the business
continues
to grow the
store portfolio.
This risk
has increased
as B&M's
store expansion
means that
the loss
of a warehouse
would impact
on a larger
number of
stores and
customers.
----------------- --------- ------------------------ ------------------------------------- ------
Key 10 The Group -- The key senior and ->
management is reliant operational management
reliance on the high are appropriately incentivised
quality and through bonus and share
ethos of arrangements such that
the executive talent is retained.
team as well -- The composition of
as strong the executive team is
management kept under constant
and operational review to ensure that
teams. it is appropriate to
the delivery of the
Group's plans.
----------------- --------- ------------------------ ------------------------------------- ------
Store 11 The ability -- Our Chief Executive ->
expansion to identify Officer actively monitors
suitably the availability of
profitable retail space with the
new store support of internal
locations and external property
is key to acquisition consultants.
delivering -- The flexibility of
our growth the trading format allows
plans. us to take advantage
of a range store sizes
and locations.
-- Each new store opening
is approved by the CEO
ensuring that property
risks are minimised
and ensuring that lease
lengths are appropriate.
-- Where new locations
may impact on existing
locations, the cannibalisation
effects are estimated
and then monitored and
measured to ensure an
overall benefit to the
Group is realised.
----------------- --------- ------------------------ ------------------------------------- ------
International 12 The ability -- Significant international ->
expansion to develop experience on the main
into new Board. The senior leadership
territories team in Germany is experienced
is important and incentivised.
to the Group's -- Clear focus on markets
future growth in which we operate
plans. to ensure they are appropriate
Expanding for value retailing
into new and the product ranges
markets creates are developed and selected
additional by local buying teams
challenges rather than through
and risks. the parent company.
-- Continuing to invest
in both the infrastructure
and technology of our
international subsidiaries.
-- Monitoring and investigating
potential new opportunities
for growth in strategically
identified locations.
----------------- --------- ------------------------ ------------------------------------- ------
UK exit 13 The UK's -- Short-term exchange
from planned exit rate volatility has NEW
the from the been mitigated by our
European European currency forward position.
Union Union has Any continued volatility
several potential will affect the economic
impacts in inflationary environment
the areas as a whole.
of economic -- Regarding the more
& regulatory fundamental changes,
environment; the level of risk is
withholding currently unknown due
tax paid to significant uncertainty
on internal regarding the outcome
dividends; of the exit negotiations
import of and British leadership's
goods due position on these.
to currency -- The board will continue
exchange to monitor developments
volatility and understand the interpretations
& increased with respect to potential
import duties; risks, and then act
availability accordingly.
& cost of
labour; and
several potentially
as yet unknown
impacts.
----------------- --------- ------------------------ ------------------------------------- ------
Movement key
->
Increased risk No change Decreased risk
----------------- ----- ------------ -----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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