// Poundland owner Pepco Group plans to open more stores despite profit drop
// Full-year revenue rose by 3% year on year to £3bn
// Pepco remains confident that its discount proposition will continue to resonate with shoppers
Poundland owner Pepco Group has seen its full-year revenue rise by three per cent year on year to €3.5 billion (£3 billion) as it announces plans to open 400 new stores per year.
However, the group reported 30.8 per cent decline in underlying EBITDA to €229 million (£198.2 million) in the year to September 30, which the business attributed to Covid-19-related closures.
Its Pepco fascia, which sells clothing and homewares, did not qualify as an essential retailer.
Group chief financial officer Nick Wharton said that 1200 stores, accounting for more than 40 per cent of Pepco’s global estate, had to be shuttered at some point over the financial year.
In the five months to the end of February, Pepco’s underlying EBITDA was up 17.8 per cent year on year, while revenue was up 14.4 per cent and five per cent in total and like-for-like terms respectively.
Wharton said Pepco remains confident that its discount proposition will continue to resonate with shoppers.
Pepco has recently launched in Italy and plans to launch the fascia in Spain later this year.
“We can sell products that are of a standard Western European shoppers expect, but at prices that are astonishing to those customers – so far, Italians are spending twice as much per shop as they do in Central Europe currently,” Wharton said.
The group, which also recently launched its Dealz fascia in Poland, aims to open 400 stores per year across the two brands.
While there are not any plans to expand its store estate in the UK, Wharton said Poundland will incorporate a greater offer for frozen and chilled food following its acquisition of Fultons Foods.
The brand has added a frozen and chilled grocery section to 100 of its shops to date, with a further 300 set to be converted in the coming months.
Pepco Group chief executive Andy Bond said: “With a strengthened proposition and more customers than ever across Europe being attracted to the discount sector, we believe that our future growth opportunity is now greater than a year ago.
“We now view our addressable market as being the entirety of Europe and having entered Italy and Serbia – our first Western European market and non-EU country respectively – we will also launch Pepco in Spain later in 2021, having identified a significant opportunity there after extensive due diligence.
“We anticipate that the consumer backdrop will remain challenging in the short term.
“However, with our strong financial base and established growth strategy within a structurally advantaged discount retail segment, we remain confident about our long-term prospects for continued growth across Europe.”