Dealz eyes Irish growth

British discount retailer Poundland is set to focus its expansion plans on the Irish market in the next nine months.

Poundland trades as Dealz in Ireland and Spain.

As part of its annual results presentation, Poundland yesterday said that it expects capital investment for its current financial year, which runs to the end of next March, to top £25m (€32m).

Most of that money will be spent on new stores, with 20-30 planned for the UK and Ireland. Poundland added that those new openings will “primarily [be] in the Republic of Ireland”.

Dealz has been aggressively expanding since entering the Irish market in 2011 and has 53 stores here.

Last year, it upped its overall target number of Irish-based stores from 70 to 100, adding that it could establish a central distribution centre here when it reaches that point.

However, that remains to be seen as Poundland is the subject of a potential takeover approach by South African retail holding company Steinhoff, which failed with an earlier attempt to buy Argos.

The group has also just changed chief executive with the Dublin-born former boss of B&Q, Kevin O’Byrne set to take charge next month.

Poundland’s annual results for the 12 months to the end of last March showed a 9.3% rise in revenues to £1.22m (€1.54m).

However, underlying pre-tax profits fell by 13.5% to £37.8m.

This was below analysts’ forecasts of between £39.9m and £51.8m and was reflective of subdued trading, adverse currency movements and the drawn-out integration of stores after its acquisition of the UK’s 99p Stores chain.

Regarding Poundland’s future ownership, Steinhoff owns 23% of the business and is considering a cash bid for the remainder.

Poundland has told its shareholders to take no action and under UK takeover rules, Steinhoff has until July 13 to announce a firm intention to bid.

“This has been a challenging but transformative year for Poundland,” said chairman Darren Shapland.

“The retail environment remains challenging, but with our significantly enlarged store portfolio, greater scale and ability to focus fully on trading our stores, I believe we are well-placed to make progress in the year ahead,” he said.

Poundland’s share price rose by 2.5%, in London, yesterday to 205p.