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Poundland Parent Pepkor Europe Reports Strong Q1 Revenue Growth

Poundland shutterstock_317914640 725 x 500.jpg

Pepkor Europe, Poundland's parent company, has reported a 15% rise in revenue during the three months ended 31st December 2018.

Pepkor Europe's businesses include Poundland, PepCo, Dealz, Pep & CO, Conforama, Harveys and Bensons for beds. 

On a comparable basis, the Group reported revenue growth from continuing operations of 3% to €4 691 million for the quarter under review (3MFY18: €4 568 million).

Pepkor Europe chief executive Andy Bond said, "A further quarter of strong revenue growth in Pepkor Europe is a reflection of a clear growth strategy (currently centered on PEPCO), unwavering focus on execution, and the Group’s market-leading position within a core discount segment that is increasingly attractive to a wide range of customers."

The positive early progress in Dealz provides further growth potential. The first quarter, which typically represents approximately a third of full-year revenue, reported revenue growth of 15%, driven primarily by continued expansion of the PEPCO format in central Europe. At 31 December 2018, Pepkor Europe traded from 2 451 stores, an increase of 12% from 31 December 2017.

Poundland continues to outperform the wider UK high street, delivering broadly flat like-for-like growth, driven primarily by the successful introduction of clothing ‘shop-in-shops’, now present in approximately 300 stores, and the measured extension of product ranges to support a broader range of price points. Poundland continues to rationalise its store portfolio in the UK. However, it took the opportunity presented by the failure of a competitor business in summer 2018 to introduce its offer to new catchments through the opening of 13 new stores in the UK and improving the existing offer through three relocations to larger stores. These stores are performing well and delivering strong returns on invested capital.

The European Dealz business continues to develop very positively and, based on confidence in its initial trading performance, Pepkor Europe intends to open 35 new stores in FY19, increasing the portfolio to approximately 60 stores. Reflecting the Group’s established knowledge of the market, the Polish business, which now operates from 14 stores, shows encouraging early signs and new store openings will be concentrated in this territory. Spain continues to perform well, delivering positive like-for-like performance, benefitting from a full PEPCO-branded fashion offer in six stores.

Poundland's sales reached €516m in the quarter, compared with €512m in the three months ended 31st December 2017.

Source : Insight DIY Team and Steinhoff International

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01 March 2019

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