Pepkor Europe, owner of businesses including Poundland in the UK, has reported a rise in quarterly and half-year sales.

Poundland’s revenues rose 3.1% in the second quarter and, over the half year to March 31, advanced 1.6% to €920m.

The retailer said “Poundland continues to outperform the wider UK high street” as a result of differentiation created by the introduction of clothing shop-in-shops, now in approximately 300 branches, and “measured product range extension to support a broader range of price points”.

Poundland continued to rationalise its store portfolio, exiting weaker locations and opening in better ones. Poundland opened 20 new stores in the UK over the half year, and relocated five to bigger premises, bringing the total to 875.

Pepkor, which trades as Pepco and Dealz in mainland Europe, generated sales of €1.7bn in the half year – a rise of 14.2% year on year. Growth was mainly driven by Pepco’s expansion in central Europe.

Pepkor Europe chief executive Andy Bond said: “Pepkor Europe is rapidly developing into a strong, geographically well-balanced pan-European variety discount retailer.

“The strength of the group’s trading performance in the first half year reflects our market-leading positions within a core discount segment accessed by an increasing number of customers.

“With the benefit of scale leverage in Pepco and targeted efficiency improvements within Poundland, profit growth in the half year will be stronger than the revenue growth reported today.

“Our trading progress has been matched by our strategic development. We continue to confidently expand Pepco and our belief that the Dealz format in mainland Europe can provide an exciting additional source of growth is increasing.

“Our planned investments in scaleable infrastructure across the group to secure the growth opportunity available to us may slow our rate of earnings growth in the second half year, but with a focused strategy in place and a strong financial base, the opportunity for long-term growth across Europe is clear.”