// Pepco half-year underlying pre-tax profit up 47.2% to €112m, while underlying EBITDA grew 16.8% to €324m
// Half-year revenues rose 4.4% to €1.99bn amidst continuing shift away from being a single-price retailer
// Poundland and its European equivalent Dealz saw a like-for-like sales increase of 1.4%
Pepco has posted a rise in half-year sales and profits and revealed that one in 10 products on sale across it Poundland fascia are no longer priced at its traditional £1 price point.
For the interim period ending March 31, Pepco – which also operates the Dealz and Pepco fascias in mainland Europe – said underlying pre-tax profits surged 47.2 per cent year-on-year to €112 million (£95.82 million) while underlying EBITDA grew 16.8 per cent year-on-year to €324 million (£277.24 million).
The profit increase came on the back of a shift away from being a single-price retailer as half-year revenues rose 4.4 per cent year-on-year to €1.99 billion (£1.7 billion).
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Pepco said trading store like-for-likes – defined by stores that were able to remain open throughout the pandemic and were exempt from lockdown restrictions – enjoyed an uptick of five per cent.
Poundland and its European equivalent Dealz saw a like-for-like sales increase of 1.4 per cent during the six months period compared with the same period a year earlier.
However, overall like-for-like growth for all stores dropped 2.1 per cent due to the various lockdowns and Covid-19 restrictions across its markets, which Pepco said saw roughly 15 per cent of trading weeks lost during the half-year period.
Despite the pandemic, Pepco still managed to open 402 net new stores compared to the previous year, bringing its total store estate to 3246.
In the UK, the increase in the Poundland store estate was primarily reflected in the 80 Fultons Frozen Foods stores the retailer had acquired as part of a transaction designed to enhance Poundland’s capability and scale in this key target growth category of frozen food.
As a result, frozen food offering is now available in 129 Poundland stores, with the intention to have it available in 700 within the next two years.
Poundland now has 917 stores in the UK and Ireland, with its Pep&Co clothes lines in 300 larger stores – which in turn has increased sales of products with higher profit margins.
Bosses also said they managed to reduce rents by around 50 per cent on 44 stores and look set to cut rental fees on a further 211 stores within the next two years.
Pepco chief executive Andy Bond said he expected to see improvements as customer behaviour returns to more normal shopping patterns.
“We anticipate that the environment in which we operate will remain changeable and challenging in the short term but over time as consumer behaviour returns to more normal patterns, as any Covid related restrictions that impact our customers confidence to shop are further relaxed,” he said.
“However, as these results show, we have a clear and winning customer offer, a long-term growth strategy delivering stores in existing and exciting new markets, as well as a number of key initiatives to drive our sales and margin.
“As such, we remain confident about our prospects for continued profitable growth in the balance of the financial year and beyond.”
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