Pepco Group posts net loss for year to 30 September
Pepco Group has reported a 10.2% increase in full year revenue to a record €6.2 billion, although it has reported a net loss due to an non-cash impairment in the period.
For the year to 30 September, it also reported that underlying EBITDA rose by 25.2% to a €944 million, driven by growth in Pepco EBITDA of 41.7%
The loss of €662 million was related to a €775 million non-cash impairment at Poundland following a weak performance and outlook at the retailer.
Andy Bond, Pepco Group non-executive chair, said: “We started the year with a number of objectives which included rebuilding Pepco’s profitability in its core Central and Eastern European market, gross margin recovery, adopting a more disciplined approach to investment with more targeted growth, reviewing underperforming areas of the business and delivering stronger cash generation.
“We have delivered on these objectives, but there remains more to achieve. As a result of renewed confidence in our future, we are announcing an inaugural full year dividend for the group.”
During the perood, Pepco revenue increased by 14.2% while Poundland saw growth of just 0.2% due to declines in clothing and general merchandise following the transition to Pepco-sourced product ranges at the start of the year.
Meanwhile, Dealz Poland increased its revenue by 39.5%.
Pepco Group opened 392 net new stores in the year to take the total to 4,948 by 30 September. This included 331 launches at Pepco, 13 at Poundland and 48 at Dealz Poland.
In October, Stephan Borchert took over from Bond as the group’s chief executive.
Looking ahead, Borchert said: “Within the group, I see the Pepco concept itself as our key engine for future strategic and financial growth, particularly in Pepco’s CEE heartland. Pepco generates the vast majority of the group’s earnings and our highest returns on capital – we plan to further build on that strong base.
Speaking of Poundland, he added: “We are taking swift action to get Poundland performance back on track, focusing on a return to Poundland’s strengths. We will also closely evaluate Poundland’s overall competitive positioning and requirements for future success as an FMCG-led format.”
