Pepco Group posts strong half year sales growth
Poundland owner Pepco Group has posted a strong uplift in half year revenue as it continues to expand with new store openings across western Europe.
In the six months to 31 March, revenue jumped by 22.8% to €2.8 billion while underlying EBITDA rose by 11% to €377 million. However, underlying pre-tax profit fell by 5.7% to €134 million at constant currency following the group’s investment in stores and expansion and related supply chain costs.
Meanwhile like-for-like sales at Pepco and Poundland increased by 15.8% and 4.9% respectively in the period.
The group ended the period with 4,127 stores, which represented an increase of 12% year-on-year. New openings included 24 shops for Poundland, although the retailer closed 28 underperforming stores in the period as part of its long-term estate plan.
The group is on track to launch at least 550 net new stores during current financial year.
Trevor Masters, chief executive of Pepco Group, said: “Our growth strategy in western Europe is progressing well, reflecting the strong appeal of the Pepco brand to customers across the whole continent. Italy, where we recently opened our 100th store, and Spain – which is benefiting from our combined clothing, general merchandise and FMCG offer – continue to be our largest and fastest-growing Western European territories. In May, we were delighted to launch the Pepco brand in Portugal.”
The group remains confident of its EBITDA outlook for the full year with with revenue growth in the high teens and EBITDA growth in the mid-teens, assuming constant currency rates.
Masters added: “We remain well positioned and in the second half will see gross margins trending upwards, as we benefit from the tailwinds on certain input costs, including commodity and freight. We are focused on executing our strategy and remain on track to deliver full year EBITDA growth in line with previous guidance.”
