Pepco Group, the owner of the PEPCO and Dealz brands in Europe and Poundland in the UK, has delivered an increase in first-half sales and profits despite some disruption to trading related to the pandemic.
In the six months to 31 March, the group’s total revenue rose 9% on a constant currency basis to just under €2bn. Like-for-like sales declined by 2.1% due to around 15% of trading weeks being lost due to Covid-19 related store closures across the business. However, those that stayed open saw growth of 5%.
Underlying EBITDA increased by 16.8% to €324m, while underlying pre-tax profit climbed by 47.2% to £112m.
On the Poundland side of the business, which also includes the Dealz format used in Europe, total revenue from the 1,017 stores climbed 15.2% to €979m with like-for-like sales in stores that continued trading up 1.4%. The group highlighted that the unit also expanded its gross margin by around 60 bps through a combination of buying benefits and the shift towards multi-level pricing.
Meanwhile, the 2,229-strong PEPCO chain saw revenues grow 3.1% to €1.02bn with like-for-like growth of 8.8%.
During the period, the group continued its store expansion programme. A net 129 new PEPCO stores were opened, including its first in western Europe with 20 in Italy. And the opening of five stores in Serbia marked the group’s entry into its first non-EU country.
27 new Dealz stores were also opened with the rollout of the format in Spain and Poland taking the total to 123 sites. In the UK, the Poundland store portfolio was boosted by the acquisition of 80 Fultons Frozen Foods stores in the period.
The group also revamped 276 PEPCO stores and completed 50 Poundland refits that included the implementation of its new frozen food offer.
Looking ahead, Andy Bond, Chief Executive of Pepco Group, said: “We anticipate that the environment in which we operate will remain changeable and challenging in the short term but over time as consumer behaviour returns to more normal patterns, as any Covid related restrictions that impact our customers confidence to shop are further relaxed.
“However, as these results show, we have a clear and winning customer offer, a long-term growth strategy delivering stores in existing and exciting new markets, as well as a number of key initiatives to drive our sales and margin. As such, we remain confident about our prospects for continued profitable growth in the balance of the financial year and beyond.”
