Poundworld has recorded a surge in full-year profits after they were hit in the previous two years by a large-scale investment programme.
- Pre-tax profits surged to £13.4m for the year
- Follows two years of declining pre-tax profits
- New owner TPG Capital to accelerate store expansion to 60 outlets a year
The discounter’s EBITDA increased 75% to £20.8m for the year ending March 31, 2015 as its turnover jumped 22% to £422.3m. Like-for-likes increased 5.6% during the period.
Pre-tax profits surged to £13.4m from £1.9m after falling in its two previous financial years because of an investment in new stores and its back office infrastructure.
Poundworld reported it has increased its operating profit 130% to £14.6m. In its previous two financial years pre-tax profits fell after an investment in new stores and its back office infrastructure.
During its most recent financial year Poundworld opened 38 stores to take its estate to 280 stores and improved gross profit margin by 90 basis points to 38%.
Private equity owner TPG Capital, which acquired a majority stake in Poundworld on May 14, is injecting funding into the retailer to accelerate the store expansion programme to over 60 new stores each year from 2016.
Development and consolidation
Poundworld chief executive Chris Edwards said: “We have seen a record financial year and one of landmark progress for the company. We expect the year ahead to be one of development and consolidation that includes investment into a new 500,000 sq ft warehousing facility adjacent to our current head office and the replacement of our existing ERP system.
“We’re confident that these changes will provide a strong platform for rapid growth over the next three years bringing our proposition of convenience and value to even more customers across the UK.”
Poundworld also reported the conversion of its multi-price Discount UK stores to the Bargain Buys fascia resulted in a 8% jump in like-for-likes.
Meanwhile, in April Poundworld launched an ecommerce site eight months after it scrapped initial plans for an online operation.
The ecommerce platform, named Poundworld Plus, offers 4,000 products including household brands Colgate, Coca-Cola and Johnson’s, at the set price of £1 each.
It also offers more than 1,000 multi-price deals for more than £1, which are exclusively available online. At present there is a minimum spend of £20 on the site.