European discount retailer Pepco Group has reported an 11% rise in first-half core earnings as revenue surged 23%, helped by new store openings.
The Warsaw-listed group, which owns the Pepco, Poundland and Dealz brands, said it made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €377 million for the six months ended 31 March, up from €347 million in the previous corresponding period.
Trevor Masters, CEO of Pepco Group commented, "The group continued to make strong progress against our strategic objectives over the half year, while delivering an increase in revenues and underlying EBITDA. [...]
"Our growth strategy in Western Europe is progressing well, reflecting the strong appeal of the Pepco brand to customers across the whole continent."
Revenue was €2.84 billion, as the group's discount offer chimed with cash-strapped consumers and it opened a net 166 new stores. Like-for-like sales rose 11.1%.
It said it was confident of meeting its target of at least 550 net new stores in the full year. It ended the first half with 4,127.
Pepco Group kept its guidance of full-year core earnings growth in the 'mid-teens'.
Pepco said that it is cautious about elevated inflation levels in Central Europe, which has posed a challenge for Pepco stores in the ongoing third quarter.
However, the company has maintained its price leadership and continued to increase its market share.
Masters added, "We remain well positioned and in the second half will see gross margins trending upwards, as we benefit from the tailwinds on certain input costs, including commodity and freight.
"We are focused on executing our strategy and remain on track to deliver full year EBITDA growth in line with previous guidance."