Poundland owner posts sales and earnings rise

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Pepco, owner of the Poundland value retail chain, has reported a rise in annual sales and profits.

The company, which is listed in Poland and also owns Dealz, said it would invest further to maintain its competitive advantage.

Pepco posted total like-for-like growth of 10.2% in the fourth quarter and 9.8% in the year to September 30. In the fourth quarter, Poundland was ahead 1% and 3.1% in the year.

Full-year underlying EBITDA is expected to come in between €640m and €655m, which the retailer said would be at the upper end of analysts’ expectations, generating growth of 45% growth versus “the mid-point on the Covid-impacted prior year”.

Pepco chief executive Andy Bond said: “We delivered another strong trading performance and made good progress against our strategic plans during the year.

“Despite the operational challenges from Covid disruption, we continued to open new stores across all three of our brands, opening 141 in the final quarter.

“We are encouraged by the initial performance of the western European Pepco stores across Italy, Austria and Spain. We are also pleased by the results of our store renewal programme in driving our like-for-like performance and enhancing the customer experience.

“As consumer demand and business activity returned following Covid impacts, pressure on global supply chains has increased with reduced raw material availability leading to commodity inflation, further compounded by constrained container capacity, which significantly increased shipping costs from the final quarter.

“Through a combination of actions taken in our operating model and our unique Far East direct sourcing operation, PGS, which has strong direct supplier and factory relationships, we have quickly taken operational action to mitigate these impacts.

“In order to further drive our significant growth plans and recognising the financial strength of the group alongside the price-sensitive nature of our core customer, we intend to invest into our price proposition to maintain our price advantage. We have developed clear plans to reduce our operating cost base through leveraging our increased scale and capability to maintain the continued delivery of our profit growth.

“While the backdrop against which we operate will remain challenging for some time, we remain confident in the significant growth opportunity we have, our plans to achieve it and meeting future market expectations.”