Pepco Group continues to be impacted by supply chain disruption
Pepco Group is expecting to deliver strong increases in revenue and EBITDA in its current financial year despite its performance being impacted by supply chain disruption.
In a pre-close trading update ahead of its preliminary results in December, the parent company of Poundland, Dealz and Pepco said it expects underlying EBITDA to rise by 20% to at least €900 million.
Meanwhile, revenue is expected to climb by 10% to more than €6 billion with the uplift driven by the group’s store expansion programme, including 64 openings in its fourth quarter. It expects to finish the year with 390 net new stores which is in line with prior guidance.
Group revenues in the 51 weeks to 22 September were up 10% on a reported basis although like-for like revenues were down 3.1%.
The group said Pepco has continued to be impacted by supply chain issues in the period. However, mitigating actions such as shipping products earlier, optimising shipping routes and using faster carrier options, are expected to improve availability during the first half of the new financial year.
Andy Bond, executive chair of Pepco Group, 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.”
Earlier this year, Pepco Group appointed Stephan Borchert as its new chief executive. The group said he is due to complete his three-month induction on 1 October when Bond will become non-executive chair.
