Poundland owner Pepco targets Germany as earnings soar

FILE PHOTO: A sign is seen in a Poundland store in London
FILE PHOTO: A sign is seen in a Poundland store in London, Britain November 10, 2015. REUTERS / Stefan Wermuth / File Photo

December 14, 2021

By James Davey

LONDON (Reuters) – Pepco Group, owner of European discount retail brands PEPCO, Poundland and Dealz, on Tuesday said it will enter the German market in 2022 when it reports core profits. year-on-year increase of 46%, following the opening of new stores.

Pepco, which listed on the Warsaw Stock Exchange in May with a valuation of 5 billion euros ($5.7 billion), now trades from more than 3,500 stores in 17 countries, employing 40,000 people.

Chief executive Andy Bond said the group plans to accelerate growth in Spain, Italy and Austria in the 2021-22 financial year starting October 1 and will also open a small number of doors. in Germany, probably in the spring.

He said Italy and Spain have the same market size as Eastern Europe, where the group has a large presence, while the German market is about the same size as Spain and Italy.

“With confidence in Spain and Italy, we have doubled the size of our market opportunity. If we make Germany work, we will triple the size of our market opportunity,” Bond told Reuters, adding that he sees potential across Europe.

Pepco said basic earnings before interest, taxes, amortization and amortization (EBITDA) came in at 647 million euros ($730 million) for the year ended September 30, in line with guidance. Revenue grew 19.3% on a constant currency basis to €4.12 billion as it opened 483 new stores.

The group said it continues to face commodity inflation and higher shipping costs along with supply chain disruptions at the start of the new financial year. But it said it could mitigate the impact.

They said they were monitoring a wave of emerging COVID cases across Europe leading to new government-mandated restrictions in some of their operating territories.

“Based on our understanding of the current magnitude of COVID’s impact on revenue and costs, we are confident of delivering full-year profit growth in line with previous levels.”

The group’s shares, priced at 40 zlotys ($9.77) at the time of the IPO, were trading at 48.2 zlotys at 11:28 GMT, down 1.4%.

(1 dollar = 4,0950 zlotys)

(1 dollar = 0.8835 euros)

(Reporting by James Davey; Editing by Sherry Jacob-Phillips and Edmund Blair) Poundland owner Pepco targets Germany as earnings soar

Bobby Allyn

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