Pepco is expecting to see ‘record revenues’ despite falling sales and ongoing supply chain disruption

In its pre-close trading update, the discounter said group revenues in the 51 weeks to September 22 increased by 10% on a reported basis, while like-for-like sales were down by 3.1%.

Pepco expects to report record revenues of more than €6bn (£5bn) for the full year as it benefits from “strong year-on-year improvements in gross margin”.

It also forecasts underlying EBITDA for the year to be at least €900m (£751m), which is 20% higher than the year before.

The group continues to be affected by supply chain disruption, which has impacted the “consistent and timely availability of stock in stores”.

Key priorities for the next financial year include improving like-for-like sales, strengthening its price leadership position and improving supply chain capabilities.

Stephan Borchert will complete his three-month chief executive induction on October 1 and Andy Bond will switch from executive chair to non-executive chair. Pepco will publish its full-year results in December.

Bond said: “I am pleased with the positive progress we have made this year, particularly in rebuilding profitability in our core Pepco business in central and eastern Europe, with further opportunities for continued improvement. 

“Group like-for-like revenues in the fourth quarter remained lower than the prior year, partly related to ongoing supply chain disruption; nevertheless, we expect to deliver record revenue and underlying EBITDA in FY24, driven by significant improvements in gross margin year on year.

“While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition and improving our supply chain capabilities. 

“With these foundations, as well as a focus on disciplined capex to drive free cash generation, we expect to deliver further strategic progress in FY25.”