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Dealz-Owner Core Earnings Surge 46% On New Store Openings

Pepco Group, owner of the PEPCO, Poundland and Dealz discount retailer brands in Europe, reported a 46% jump in its 2020-21 core profit on Tuesday, reflecting new store openings amid the easing of lockdown restrictions.

The group said its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came in at €647 million ($730 million) in the year ended 30 September, in line with its forecast range of €640 million to €655 million.

Pepco, which listed on the Warsaw stock market in May with a valuation of €5 billion, said revenue increased on a constant currency basis by 19.3% to €4.12 billion, with like-for-like sales up 6.5%.

New Stores 

The company saw 483 store openings, including the first PEPCO stores in Austria, Serbia and Spain, taking the total to 3,504.

The group said it has a strong new stores' pipeline for 2021-22 and beyond.

"The highly encouraging initial performance of these Western European PEPCO stores gives us increasing confidence that the whole of Europe is an addressable market for us, with our plans to open in Germany well on track for the first half of 2022," Andy Bond, chief executive officer, said.

"Through our new stores we remain on course to create at least 13,000 jobs over the next three years."

Increased Costs 

The group said it continued to face commodity inflation and increased shipping costs alongside supply chain disruption at the start of its new financial year.

However, it said it has a clear strategy to mitigate the impact.

It is also monitoring the emerging new wave of Omicron variant across Europe that resulted in the re-introduction of government-mandated restrictions in some of its operating territories.

"Based on our understanding of the current level of Covid impact on revenue and costs we are confident in delivering full-year profit growth in line with historic levels," it said.

News by Reuters edited by Donna Ahern Checkout. For more Retail stories click here. Click subscribe to sign up for the Checkout print edition.

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