Discounter Poundland is to float on the London Stock Exchange ending months of speculation.
The retailer, which has over 500 stores in the UK and Ireland, is forecast to be valued about £700m as it seeks to raise funds to expand its stores in wake of strong consumer demand. The firm, which was recently featured in the BBC1 documentary Pound Shop Wars, counts a fifth of its customers in the wealthy AB social economic group.
It has also strengthened its board with four non-executive directors including Darren Shapland as Chief Financial Officer who left Carpetright last year.
The float will see private equity group Warburg Pincus, who owns 76 per cent of the company, cash in with senior management owning the remainder of the firm. Both will be able to sell their shares following the flotation.
Newsagent and convenient chain McColl’s kicked off the flood of IPO’s last month and are expected to be followed by B&M, Pets at Home, Phones 4 U and Fat Face in March.
Meanwhile Poundland is set to expand with a “low risk” and “low cost” entry plan into recession-hit Spain under its ‘Dealz’ brand in the next financial year by opening 10 new stores in the country.
Revenue rose 17 per cent to £880.5m last year, while underlying earnings before interest and tax jumped 21 per cent year-on-year to £45.5m.
The discount sector is growing and increasingly diverse; most of the UK’s discount stores are either independent, or part of a small chain. In 2013, companies that operated nine or fewer stores ran 3,468 of the nation’s discounters – more than three times the number of Aldi and Lidl shops combined, according to research from wholesaler Rowan.