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Poundland soars on stock market debut

Shares in Poundland went on sale today for the first time – at £3 each – as the booming Black Country firm was valued at £750 million.

In early trading today, the shares soared more than 17 per cent to around £3.50 each, giving the company a paper value of nearly £900m for a brief period.

The shares are likely to fluctuate in value in the next few days.

Floating on the stock market will raise between £375m and £430mto help the Willenhall-based chain expand in the UK and in Europe.

The move values the company, started in a £30-a-week office in Sedgley 24 years ago, at £750m.

Founder Steve Smith and his father sold the business for around £50 m in 2002, and since then it has expanded to more than 500 stores and sales of £880m.

It employs 12,000 people, around 750 of them at its headquarters in Willenhall and distribution depot at Bilston,

It has built its success on offering everything for £1, from toys and sweets to household staples like milk and sugar and even books and DVDs.

The result has been one of the biggest high street success stories of recent times, piling on the profits and sales figures year after year in both good times and bad.

The next move is to open stores on the Continent, starting in Spain, using the Dealz brand it first launched in Ireland.

To fund the growth Poundland is selling 250 million shares in the business – about half its value.

Around 125 million went on sale today in so-called conditional trading.

Dealing in the shares over the next few days is likely to involve big investors like pension funds and insurance companies. Ordinary investors will be able to get their hands on a bit of Poundland next week, when full public trading starts on Monday.

Depending on the take-up of shares, current owners Warburg Pincus, an investment group, will own 30 to 38 per cent and Poundlands directors and senior management will own 10.2 per cent.

Jim McCarthy, the chief executive who has led Poundland since 2006, said today: “I’m very pleased to welcome our new shareholders to Poundland. The combination of a track record of delivering strong, profitable growth underpinned by a well-invested infrastructure and a compelling growth story has attracted overwhelming support for Poundland’s IPO.

“We look forward to continuing to deliver, as a listed company, Poundland’s mission to provide our customers with amazing value every day.”

Source : Express & Star

13 March 2014
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