Discount retailer Poundstretcher has reported a swing to £30m pre-tax profits in FY21, up from losses of £49.5m the previous year.
The group also revealed an unaudited EBITDA of £46.7m for the year ended 31 March 2021, as a direct result of an earlier restructuring.
2020 saw Poundstretcher enter a company voluntary agreement (CVA), with 95% of creditor approval, due to the impacts of “crippling rents”.
In turn, leases were renegotiated, 90 loss-making stores closed, and between 200 and 250 redundancies took place, lowering the company’s cost base and returning its profitability.
Aziz Tayub, co-owner and chief executive at Poundstretcher, said: “Putting the CVA in place was a way for us to futureproof the company at a time of huge economic uncertainty.
“The CVA gave us time to breathe – we could not have afforded paying rents on closed stores. Literally every store is profitable now.”
He added: “We felt that a CVA offered us the best solution to the issues we had faced in 2019/20. Since we restructured our cost base, we have traded at a profit every week.”
Looking ahead, the group has forecasted £40m in pre-tax profits for FY22, and has plans to return its shop portfolio to its pre-CVA total of 450.