Discount retailer Poundland reported a 23.5% rise in annual profits as it began its expansion into continental Europe with the opening of its first store in Spain on Wednesday.
Poundland, one of a raft of retailers to float on the stock market this year, has made a strong start to its new financial year and its maiden results met profit forecasts. Sales climbed 18% to £262.6m in its first quarter to 29 June. The news propelled Poundland shares 4% higher to 342p, up 13.5p and above the float price of 300p.
Poundland chief executive Jim McCarthy said: "We are confident of further progress through the year whilst recognising our critical third quarter lies ahead of us."
He hailed a "transformational year" for Poundland, which listed in March with a stock market value of £750m. He said the next leg of its international expansion is underway with the opening of its first Spanish store in Torremolinos under the Dealz name.
This forms part of plans to open 60 new stores this year, including a number of Dealz shops in Ireland and Spain. Poundland made an underlying pretax profit of £36.8m in the year to 30 March, up 23.5%, while on a statutory basis pretax profit dropped 18.9% to £21.5m. The latter figure includes IPO costs of £10m.
Poundland serves nearly 5 million customers each week, including more than 200,000 in Ireland. It opened 70 new stores during the year, taking the total to 528. Poundland has managed to pull in more shoppers from higher income groups, with over 22% of customers now from the AB demographic.