News Column

Poundland Says Strong Sales Growth Continuing In New Financial Year

July 3, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Discount retail chain Poundland Group PLC Thursday reported strong growth in sales in its recently completed financial year and said they have continued into the current year, boosted by new store openings, although the retailer said its profit for the recent year was held back by costs relating to its recent IPO.

The discount retailer, which sells everything for GBP1 in its Poundland stores and the equivalent from its Dealz stores in Ireland, said the strong trading momentum has continued into the new financial year, which started on on April 1, with sales up 18% in the first three months to GBP262.6 million, as it said its retail proposition continues to gain traction.

"After a pleasing start to 2014/15 we are confident of further progress through the year whilst recognising our critical third quarter lies ahead of us," said Chief Executive Jim McCarthy in a statement.

Poundland posted a pretax profit of GBP21.5 million for the financial year ended March 30, compared with a pretax profit of GBP26.5 million the prior year.

The retailer said profits fell after booking higher costs, mostly relating to its recent stock market flotation in London back in March.

Excluding those costs and other one-off items, pretax profit rose almost 24% to GBP36.8 million, up from GBP29.8 million the year before, and at the top end of market expectations for the year.

Revenues in the year increased more than 13% to GBP997.8 million, up from GBP880.5 million the prior year, with like-for-like sales up 1.9%. Poundland said it served nearly five million customers each week.

The retailer continues to improve its product offering, while its new store opening programme has continued to drive strong like-for-like sales growth.

"In addition to strong trading in the UK, the next leg of our international expansion is now underway with the opening yesterday of our first Spanish store in Torremolinos," said McCarthy in the company's statement.

Poundland opened a total of 70 net new stores last year, an increase of 15%, bringing its total store estate at year end to 528.

The retailer has also just launched a Spanish trial of its Dealz brand, which it said it plans to open an initial 10 stores over the next two years.

Going forward, Poundland said its plans to open a net 60 stores in the UK and Ireland this year, as well as the 10 Dealz stores. The company said it will spend around GBP20 million this year on capital investment, depending on the pace and cost of the pilot in Spain.

"We continue to invest in our infrastructure to support our planned growth and we will open our new purpose-built 350,000 square feet distribution centre in Harlow in August," the company said.

The company confirmed its plans to declare its first interim dividend in the current financial year.

Poundland shares were up 6.0% at 348.40 pence Thursday morning, the biggest gainer in the FTSE 250.

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Source: Alliance News

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