Poundland targets more than 1,000 stores in Europe

Poundland chief executive Jim McCarthy told Retail Week the single price point retailer has chosen which market or markets the retailer will launch in, as it plans to blanket the UK with stores.

He added: “Research tells us there is scope for 1,000 Poundland sites in the UK.

“Europe is a much bigger market and it is reasonable to assume growth will be considerably more over time than in the UK.”

McCarthy said Poundland will recreate the launch of its multi-price Dealz fascia in Ireland, which sells the majority of its products for €1.49, on the continent.

Poundland has grown the two-year-old Irish business to a 30-store estate, which has just generated its first profitable full year.

Poundland opened 69 new stores in the year to March 31, bringing its total estate to 458. Since year end, Poundland has opened 30 new stores and plans 50 in total this year.

McCarthy said the retailer is aiming to continue to open between 50 and 70 UK stores each year but it will depend on the “opportunities” available.

McCarthy said: “The consensus is that we are demanding more for less and online growth will continue. But, with Poundland’s 17 categories at £1, we’re conveniently placed for shoppers in three different formats. We’re not strictly a high street retailer, we’re also in shopping centres and retail parks.”

McCarthy was speaking after Poundland today revealed full-year EBITDA surged 15.6% to £45.4m as gross profit rose 14.6% to £323.4m. Total sales jumped 15% to £880m.

At year-end Poundland was attracting 4.5 million customers each week but since then it is now serving 4.8 million customers. McCarthy added that the new financial year had started well and it is trading ahead of expectations.

It is understood, Poundland, which is owned by US private equity firm Warburg Pincus, is mulling an IPO in the first half of next year. McCarthy would not be drawn on the prospects of a flotation.

McCarthy also played down plans to launch online. He said it is not a priority but will happen “in due course”.

Poundland said cash generation was strong and in the period net borrowings halved to £12.1m from £26.1m in 2012.