Poundland owner’s first-half performance hit by pandemic

Pepco’s sales climbed 14% in the five months to February, helped by expansion in Europe, and like-for-likes rose at all its brands, including a 2.2% advance at Poundland and Dealz.

However, as Covid-19 hit, pre-tax profit in the six months to March fell 16% to €89m (£80m) on sales of €1.9bn (£1.7bn).

The retailer said revenue is ”returning to pre-Covid levels”. Almost all of its stores are now trading, but like-for-like sales are down. Pepco reported that its  financial position ”remains strong” and that it has cash resources of about €400m (£361m).

In the first half of the year, Pepco opened 150 new stores net, and branch numbers have risen 15% year on year to 2,844. Leases were renegotiated for 76 Poundland shops, which helped to bring down operating costs.

Pepco group chief executive Andy Bond said: “It is pleasing to report continued strong operational, strategic and financial progress made by all parts of the group before the impact of Covid.

“We continued our store expansion programme, delivered compelling like-for-like sales growth and converted sales to profit, while at the same time investing in infrastructure and maintaining our price leadership position within the European discount variety retailing sector.

“When Covid impacted, the group reacted quickly, protecting both our teams throughout the supply chain and our customers in our stores while protecting our cash position.

“Our actions ensured we had sufficient liquidity to operate through this wave of the virus but also by, for example, maintaining our store expansion programme, left us positioned strongly to thrive once we are through this period of reduced consumer demand. 

“Looking forward, the consumer outlook remains uncertain and our plans reflect our expectation of a ‘new normal’ trading environment once we all emerge from the Covid virus. However, it is likely that consumer demand for discount retailing will increase in a period of prolonged economic uncertainty and we are extremely well placed to take advantage of this trend.”