Pepco Group has posted record full-year sales growth but said performance was “mixed” against a challenging backdrop.
Poundland owner Pepco Group saw group revenue rise by 17.7% to €5,649m (£4,876m) on a constant currency basis for the year ending September 30, 2023, driven by Pepco growth of 24.8% and Poundland growth of 8.4%.
However, fourth-quarter sales at the group’s European discount clothing brand Pepco declined by 2.4%, with like-for-like sales turning negative in August and worsening in September.
Like-for-like sales for the same period at Poundland increased by 4.1% and rose by 5.6% for the fiscal year.
Group like-for-like revenues were flat in Q4 and up 6% for the year.
The group also had a record number of net new store openings during the fourth quarter, adding a further 343 to its estate, with 668 opened in total during the year.
Pepco Group executive chair Andy Bond said: “Group performance over the past year has been mixed against a challenging market backdrop.
“We opened a record number of new stores and delivered strong double-digit revenue growth, resulting in record group revenues. We will deliver profit growth year on year and our highest-ever EBITDA outturn of approximately €750m [£647m].
“As first announced on 12 September, the trading environment deteriorated significantly in the last quarter across Pepco’s markets, notably in central and eastern Europe (CEE), with weaker sales, a lower-than-forecast gross margin and higher costs, resulting in a reduced level of profitability in our core markets, which we are addressing.
“I look forward to outlining my key priorities at the upcoming capital markets day, which includes refocusing on customers in our core CEE business, implementing a more targeted growth plan in markets where we have a presence and accelerating the transition into a single business.
“By doing so, we aim to improve profitability and cash generation in our established business and deliver more measured growth.
“With a market-leading customer proposition, strong balance sheet and resilient operating cash flow, the group is well placed for future success across Europe.”
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