Pepco Group, which operates discount retailers Poundland and Dealz, has reported a 14.3% rise in annual core earnings, helped by the opening of 516 new stores, and has forecast more growth in its new financial year.
The group, which listed on the Warsaw stock market last year, said it made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €731 million in the year to September 30, up from €647 million in 2020-21.
Revenue rose 17.4% to €4.82 billion, with like-for-like sales up 5.2%.
'Macro-economic conditions continue to be challenging, driven by inflationary pressures, but the group continues to outperform the wider market,' Pepco said, noting it was benefiting from economies of scale with suppliers due to its size.
'We are driven by maintaining and improving our price leadership position through which we can grow our market share,' it said.
Pepco in October outlined plans to accelerate its expansion in 2022-23, opening at least a net 550 stores, including taking the Pepco brand into Greece and Portugal. It ended the 2021-22 year with 3,961 stores.
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“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," commented Trevor Masters, chief executive. "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."
Strong Start To 2022/23
The group said it had seen a strong start to its new financial year and was on track to meet guidance for 2022-23 of EBITDA growth in the mid-teens, assuming constant foreign exchange rates and absence of any further significant deterioration in the macro environment.
It forecast revenue growth in the mid to high teens, driven by the new store openings, store refurbishments and like-for-like sales growth from the existing store estate.
Pepco also forecast it would deliver EBITDA of €1 billion in under five years' time, ahead of its target outlined at the time of its IPO.
News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.