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Our monthly Ice Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of income-focused Ice recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
B&M European Value Retail (LSE: BME)
- B&M’s share price was down roughly 17% year to date as of writing (16th July) due to investor fears over slowing growth for the UK’s leading discounter.
- While FY25 is likely going to be a year of negative like-for-like growth at B&M’s UK stores, the sky is not collapsing on the business. In Q1 overall group revenue was still up 2.4% year-on-year thanks to new store openings, great trading from B&M France, and Heron Foods continuing to do well.
- We were also told in the Q1 trading update that gross margins were strong and the company is exiting the summer months with a clean inventory position. That its buying teams accomplished this despite a poor summer so far weather-wise points to the impressive work in forecasting and purchasing B&M’s purchasing managers do.
- Although free cash flow is going to continue reducing from the peak of the lockdown-impacted pandemic years, B&M is still recording significantly higher profits and cash flow than it was pre-pandemic. With rising scale and the French business growing quickly and now profitable, we’re hopeful that can continue.
- At 13 times trailing earnings with a trailing ordinary payout of 3.1% supplemented by fairly regular special dividends, we think B&M is worth considering this month.
