Pepco LFL sales dip 2.5% in H1 amid tough comparatives

Poundland owner Pepco Group has reported that group revenues on a constant currency basis rose by 11.1% to £2.73bn (€3.2bn), though on a like-for-like basis revenues dipped by 2.5% in the half-year ending 31 March 2024. The group has attributed its like-for-like sales performance during the period to a tough comparative period, where like-for-like sales were up by 15.8% in H1 2023. In addition, Poundland like-for-like sales were down 0.7% in the half-year, as a positive fast-moving consumer goods (FMCG) performance was offset by a “weaker” performance in clothing and general merchandise. This was impacted by Pepco’s transition to new ranges. Meanwhile, the group also revealed that Q2 revenues grew by 11.7% to €1.3bn (£1.4bn) in constant currency, though like-for-like sales in the second quarter fell by 2.9%. For Poundland, second quarter like-for-like sales fell by 2.8%, but there was a 14.7% growth on a constant currency basis. The group’s store openings also moderated in the second quarter “as expected”, with 86 net new stores opened across the group in Q2 compared with 203 total openings in Q1. Poundland specifically opened a total of 81 new stores during the period, largely reflecting 56 Wilko conversions. Andy Bond, executive chair of Pepco Group, said: “We remain focused on cost control and are on track to deliver a significant reduction in our capex this year – making us increasingly confident on enhanced free cash flow generation in FY24. “The group is confident about delivering profitable growth this financial year – reflecting a stronger and more resilient business – as we continue to move forward to build Europe’s leading variety discount retailer.” Pepco has also named former GrandVision boss Stephan Borchert as its new incoming CEO, effective from 1 July. Bortchert led the Vision Express owner until its acquisition by EssilorLuxottica in July 2022. Andy Bond will remain in his role as executive chair during this transition period, reverting to the role of non-executive chair on 1 October 2024. Borchert said: “I’m honoured to be the next chief executive of Pepco Group – which has the opportunity to become Europe’s leading variety discount retailer. Pepco Group is a powerhouse retail business with a strong reputation for delivering incredible range, value and convenience for customers. “I am delighted to work alongside the leadership team to deliver on the Group’s strategic priorities as Pepco Group enters the next phase of its growth journey.”