Pepco Group posts strong sales growth
Pepco Group, the owner of Poundland, Pepco and Dealz, has posted revenue of €5.649 billion in the year to 30 September.
The sum marks a 17.7% increase on a constant currency basis on the previous year, driven by respective growth of 24.8% and 8.4% at Pepco and Poundland.
The group’s underlying EBITDA was also up, rising by 3.1% on a constant currency basis to €753 million.
However, underlying pre-tax profit was down 33.7% year-on-year to €202 million at constant currency following investment in the group’s store estate, expansion and related supply chain costs.
During the year, Pepco Group opened 668 net new stores, including 53 for Poundland in the UK, although 51 underperforming Poundland stores were closed as part of the retailer’s long-term estate management plan. In September 2023, Poundland agreed to take control of up to 71 Wilko store leases following the retailer’s collapse into administration.
In its new financial year, the group is expecting to open at least 400 net new stores across all formats, with the Pepco brand accounting for the highest number.
Andy Bond, executive chair of Pepco Group, said: “Despite a challenging market backdrop, we delivered another year of strategic progress and record sales of €5.649 billion, against a strong prior year comparative.
“That said, our overall performance was mixed with a disappointing profit outturn. As we laid out at our Capital Markets Day in October, we are acting decisively to address this, reaffirming our strategy to deliver more measured growth – doing less, to achieve more – with a greater focus on improving profitability and cash generation.”
The group said its like-for-like revenues declined by 3.1% in the eight weeks to 26 November, although Poundland like-for-likes were slightly above the same period last year as it benefited from a strong performance in FMCG.
Bond added: “Looking ahead to 2024, while we expect industry-wide short-term sales challenges to continue, we are cautiously encouraged by recent third-party data pointing to an expected easing of certain pressures on household budgets, particularly in Central and Eastern Europe.
“The opportunities in our core markets remain significant, and we will leverage them in a more targeted way, with an enhanced emphasis on
capital, returns, and free cash flow, helping to grow the business in line with our renewed strategy.”
