B&M (BME) has surprised the market with interim results this morning. The numbers are in line, but a minimal 0.9 per cent rise in UK like-for-like sales has caught the market off-guard. Adjusted cash profits rose by nearly 14 per cent overall, and by 12 per cent in the UK, thanks to better gross margins in the wake of reduced clearance activity. But while full-year guidance remains intact, the market seems spooked by the idea that by cutting promotions, underlying volumes have slumped, and that total growth in the period was largely the result of store expansion. Our recommendation is under review.
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