Dealz-owner Pepco gets profits boost helped by opening new stores

Revenue at the group which includes Poundland and Dealz rose 17.4% to €4.82bn in the 12 months to the end of September

Dealz in the Republic and Poundland in Britain and the North, Fonthill Retail Park, Clondalkin.

Pepco Group, owner of European discount retailer brands Dealz, Poundland, and Pepco posted a 14.3% rise in annual core earnings, helped by the opening of 516 new stores, and forecast more growth in its new financial year.

The group, which listed on the Warsaw stock market last year, said it made underlying ebitda (earnings before interest, tax, depreciation and amortisation) of €731m in the 12 months to the end of September. That’s up from €647m in the previous financial year.

Revenue rose 17.4% to €4.82bn, with like-for-like sales up 5.2%, for the group that has stores across Europe, including Dealz outlets in the Republic and Poundland stores in the North.

“Macro-economic conditions continue to be challenging, driven by inflationary pressures, but the group continues to outperform the wider market,” Pepco said, noting it was benefiting from economies of scale with suppliers due to its size.

“We are driven by maintaining and improving our price leadership position through which we can grow our market share,” it said.

In October, Pepco outlined plans to accelerate its expansion in 2022-23, opening at least a net 550 stores, including taking the Pepco brand into Greece and Portugal.

It ended the 2021-22 year with 3,961 stores.

The group said it had seen a strong start to its new financial year and was on track to meet guidance for 2022-23 of ebitda growth in the mid-teens, assuming constant foreign exchange rates and absence of any further significant deterioration in the macro environment.

It forecast revenue growth in the mid to high teens, driven by new store openings and refurbishments, and like-for-like sales growth from the existing store estate.

Pepco also forecast it would deliver ebitda of €1bn in under five years, ahead of its target outlined at the time of its IPO.