Pepco posts strong uplift in full year sales and profit
Pepco Group has posted a 17.2% increase in full year revenue to €4.122 billion as it continues its roll out of new stores.
In the year to 30 September, like-for-like sales increased by 6.5% after growing by 9.8% and 3.1 % at Pepco and Poundland respectively.
The group’s gross profit margin climbed by 220 bps to mark a return to 2019 levels, which was driven by mark down improvements and the product mix despite a backdrop of supply chain headwinds.
Full year underlying EBITDA came in at €647 million which represented 46.2% growth on the Covid-19 impacted prior year.
During the period, Pepco opened a net 364 stores to mark a 17.3% increase on the previous year. This included 36 in the group’s strategically important western European market.
Meanwhile, Poundland Group opened 119 net new stores which was primarily driven by Dealz’s expansion in Poland and Spain.
Andy Bond, chief executive of Pepco Group, said: “We delivered another strong financial performance in the last year, while further strengthening our balance sheet. Despite a challenging backdrop, we made impressive progress against our strategic objectives to further cement our status as one of Europe’s strongest and most attractive growth stories in physical retail.
“The highly encouraging initial performance of these Western European Pepco stores gives us increasing confidence that the whole of Europe is an addressable market for us, with our plans to open in Germany well on track for the first half of 2022. Through our new stores we remain on course to create at least 13,000 jobs over the next three years.”
Looking ahead, Pepco Group said it has a strong new store pipeline and is planning to invest into its price proposition to maintain, or potentially grow, its price advantage. It will also reduce its operating cost base to further support the delivery of profitable growth.
Bond added: “We continue to reap the rewards of our ongoing investment across both store openings and renewals. Alongside new space investment, our store refit and proposition renewal programme continues to drive like-for-like sales growth and increased store profitability.
“While market conditions may remain challenging for some time to come, the group is very well positioned to continue its strong track record of growth and we remain confident in the significant growth opportunities we have ahead of us.”
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