Pepco has recorded strong growth in profits despite “a challenging Covid-affected trading environment”.

Poundland Stoke fascia

The discount retailer, which owns the Pepco and Dealz brands in Europe as well as Poundland in the UK, reported growth in underlying EBITDA to €647m (£552m) for the year ending September 30, 2021 – a 46.2% increase on the “Covid-impacted prior year”.

Revenues for the group also rose 19.3% to €4.12bn (£3.52bn) on a constant currency basis across the year. This included sales growth of 3.1% for the Poundland group.

The group also increased its store portfolio, with 483 net new stores opened in the year to 3,504. This figure also includes the 59 Fultons Foods stores that Pepco acquired in the UK.

Poundland Group opened 119 net new stores, driven by the Dealz expansion in Poland and Spain – an increase of 12.9%.

The group’s Pepco brand opened 364 net new stores, including 36 in the “strategically important western European market”. The company now plans to open stores in Germany in the first half of 2022. 

Despite this strong performance, the discount retailer cited inflation, increased shipping costs and supply chain disruption, as well as the re-emergence of Covid restrictions in Europe, as ongoing challenges. 

Chief executive Andy Bond said: “Despite a challenging backdrop, we made impressive progress against our strategic objectives to further cement our status as one of Europe’s strongest and most attractive growth stories in physical retail.

“In this current financial year, we intend to invest to maintain or grow our price advantage and support customers at a time when household budgets remain stretched. To mitigate wider inflationary pressures across our markets, we will also continue to execute our plans to reduce operating costs.

“We continue to reap the rewards of our ongoing investment across both store openings and renewals. Alongside new space investment, our store refit and proposition renewal programme continues to drive like-for-like sales growth and increased store profitability.”

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