Poundland owner Pepco ramps up investment in stores as profits rise

The value conglomerate registered a 23.2% increase in underlying pre-tax profit to €300m (£257.5m) during the year ending September 30. 

Underlying EBITDA climbed 13% to €731m (£627.6m), as revenues jumped 17% to €4.82bn (£4.12bn). 

On a like-for-like basis, Pepco sales grew 5.2% in constant currencies.

Pepco opened a record 516 net new stores during the period and said it would ramp up investment in further expanding its European portfolio, which now consists of 3,961 stores. 

The group, which is publicly listed in Poland, said it was “committed to accelerating our profitable store roll-out programme” with an “increased focus” in Western Europe. 

It will also press ahead with its “extensive” refurbishment programme in its existing stores in Central and Eastern Europe. 

Pepco said that, as a result, capital expenditure would rise to between €350m (£300.5m) and €400m (£343.5m) “over the next couple of years”.

The value conglomerate, which also owns Pepco, Dealz and Pep&Co, said its aggressive expansion strategy would deliver EBITDA of €1bn (£860m) in less than five years’ time – ahead of the target it set at the time of its Warsaw IPO in May last year. 

Pepco said that, while turbulent market conditions were “unlikely to abate in the near term”, it had delivered a “strong start” to its new financial year and was committed to “maintaining and improving our price leadership position” in order to grow market share. 

Pepco chief executive Trevor Masters said: “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.

He added: “Historically, we have been focused on maximising the returns at each of our operating companies to grow and serve our customers. As we turn to the next chapter of Pepco Group’s growth story, we are increasingly focused on leveraging the scale and diversity of the great business we have built in order to unlock the potential of the group as a whole, by combining the impressive strengths and capabilities of each of the brands we operate. 

“We have made significant progress, and I look forward to pushing forward with our ambitious plans and capitalising on the attractive market opportunities ahead.”

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