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Poundland owner Pepco Group has reported a 17.7% increase in revenues to €5.6bn (£4.8bn) for the 12 months ended on 30 September.
The revenues were driven by Pepco growth of 24.8% and Poundland Group growth of 8.4%. Underlying EBITDA increased 3.1% to €753m (£646m).
However, underlying pre-tax profit dropped 33.7% to €202m (£173m), compared with €300m (£257m) reported in 2022. The company said pre-tax profits dropped due to investment in stores, expansion and related supply chain costs, alongside higher inflation and higher interest costs.
During the year, the group opened 668 new stores resulting in a 16.9% year-on-year increase.
In FY24 Pepco is expected to open a further 400 new stores.
Commenting on the results, Andy Bond, executive chair of Pepco Group, said: “Despite a challenging market backdrop, we delivered another year of strategic progress and record sales of €5,649m, against a strong prior year comparative.
“That said, our overall performance was mixed with a disappointing profit outturn. As we laid out at our Capital Markets Day in October, we are acting decisively to address this, reaffirming our strategy to deliver more measured growth with a greater focus on improving profitability and cash generation. We also committed to the UK as the Group’s largest market. Our ambition is to continue the strong progress made by the team, such as the ongoing enhancement of Poundland’s proposition, including introducing the Pepco clothing range in stores, alongside its extensive FMCG range that is appreciated by customers.”
Bond concluded: “The opportunities in our core markets remain significant, and we will leverage them in a more targeted way, with an enhanced emphasis on capital, returns, and free cash flow, helping to grow the business in line with our renewed strategy.”
