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Pepco Forecasts Annual Profit At Upper End Of Expectations

Published on Oct 14 2021 10:55 AM in Retail tagged: Poundland / Dealz / profit / Pepco Group

Pepco Forecasts Annual Profit At Upper End Of Expectations

Pepco Group, the owner of British discount retailer Poundland, forecast full-year core profit at the upper end of market expectations, after revenue rose 19.4% helped by its aggressive store openings.

It did, however, warn that pressure on global supply chains has increased with reduced raw material availability leading to commodity inflation.

The company said in a trading statement that this has been further compounded by constrained container capacity which significantly increased shipping costs from the final quarter.

Chief executive Andy Bond, said, "Through a combination of actions taken in our operating model and our unique Far East direct sourcing operation, PGS, which has strong direct supplier and factory relationships, we have quickly taken operational action to mitigate these impacts."

Bond said Pepco, which also owns the PEPCO and Dealz brands in Europe, planned to invest in its price proposition to maintain its price advantage.

"While the backdrop against which we operate will remain challenging for some time, we remain confident in the significant growth opportunity we have, our plans to achieve them, and meeting future market expectations," he added.

New Store Openings

Net new store openings were 483 in the year to 30 September, including the first PEPCO stores in Austria, Serbia and Spain, taking the total to 3,504.

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The group, which listed on the Warsaw stock market in May with a valuation of €5 billion ($5.8 billion), said full-year revenue was €4.1 billion, with like-for-like sales up 6.5%.

Pepco's like-for-like sales increased 10.2% in the fourth quarter, while Poundland/Dealz's rose 1.0%.

Pepco forecast full-year underlying earnings in a range of €640 million to €655 million, representing a 45% growth at the mid-point on the COVID-hit prior year.

The group's shares, which were priced at 40 zlotys ($10.1) at the IPO, closed at 48 zlotys on Wednesday.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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