Dealz Owner Pepco Earnings Up 16.8% On Store Expansion
Pepco Group, the Poland-listed owner of British retailer Dealz on Thursday reported a 16.8% increase in core earnings, as revenue growth from new store openings offset the impact of pandemic restrictions.
The group, which also owns the PEPCO and Poundland brands in Europe and the UK, trades from more than 3,200 stores across 16 countries and is led by chief executive Andy Bond, a former boss of British supermarket group Asda.
It made its stock market debut in Warsaw last month following the biggest initial public offering (IPO) in Poland this year and is trading above its IPO price.
Pepco made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €324 million in its first half to 31 March.
Pepco's Total Revenue
Total revenue on a constant currency basis rose 9%, driven by 225 net store openings across all its retail brands and territories.
However, like-for-like sales fell 2.1%, reflecting 15% of the trading weeks being lost to pandemic-related store closures.
All of the group's stores are trading, although some restrictions remain, placing limitations on customer footfall.
It said underlying trading was in line with full-year guidance provided with the IPO.
"We remain confident about our prospects for continued profitable growth in the balance of the financial year and beyond," Bond said.
The group's shares were priced at 40 zlotys at the IPO giving it a valuation of 23 billion zlotys ($6.3 billion)
The stock was trading at over 46 zlotys on Thursday.
Renewed cost inflation from commodities and global freight rates will not inevitably mean price rises for shoppers of Pepco Group's Poundland, PEPCO and Dealz brands, its boss said on Thursday.
"It's my strong cultural belief that a discounter is committed first to its customers to keep prices as low as possible, so we will do our damnedest to keep prices low," Bond told Reuters after the group reported first-half results.
"We'll take all the mitigating actions we can," he said.
Bond said he also thought price increases for consumers were not inevitable because it was not yet clear how long the inflationary cycle would last.
"It's not clear if this is a six-month or a three-year issue," he said.