Pepco Group, the owner of the PEPCO and Dealz brands in Europe and Poundland in the UK, has posted robust annual results and confirmed plans to open hundreds of new stores over the next 12 months.
During the year to 30 September, the group’s underlying pre-tax profit rose by 25.8% on a constant currency basis to €300m with EBITDA up 14.3% to €731m.
Total revenue climbed 17.4% to €4.82bn, with like-for-like growth of 5.2%.
The group opened a record 516 net new stores during the period and revamped a further 727 sites. Pepco stated that it would be accelerating its store opening programme in its current financial year, with a target of 550 openings as it aims to reach 4,500 stores by the end of the period.
Most of the new shops will be situated in Central and Eastern Europe, whilst the Pepco brand will also be entering Portugal in the Spring of next year. Meanwhile, over the next 18 months, the group is planning to double the number of Dealz stores in Poland to 340.
Across its Poundland stores in the UK, the group noted that it was continuing to see strong consumer demand for its chilled and frozen food items, and will be introducing these ranges more widely across stores as well as new categories, such as clothing and homewares.
Poundland refitted 129 stores over the last year, bringing the total to 342 stores. It plans another 250 to 275 more remodels in the year ahead.
In the long term, Pepco stated that its ambition is to operate approximately 20,000 stores across Europe.
Trevor Masters, Chief Executive of Pepco Group, commented: “Despite industry-wide short-term challenges, Pepco Group delivered another year of good progress and resilient trading performance, driven by our successful and proven strategy.
“We accelerated our profitable store expansion programme – our biggest source of value creation – and store refit strategy, helping to enhance our LFL performance.
“We also lowered our cost structure and improved back-office processes to be significantly cheaper and more efficient, helping us grow sales and deliver on EBITDA and cash generation.”
The group is on track to meet guidance for its 2023 financial year of EBITDA growth in the mid-teens, assuming constant exchange rates and the absence of any further significant deterioration in the macro environment.
Masters added: “We have made significant progress, and I look forward to pushing forward with our ambitious plans and capitalising on the attractive market opportunities ahead.”
NAM Implications:
- A business model perfectly suited to the current and future economic climate…
- With their latest results proving the point.
- i.e. key that suppliers find ways of working with ‘single price’ retail…
- …somehow.
- (but watch item profitability…)
