Poundland sees return to sales growth
UK discount retailer Poundland expects to return to underlying sales growth this financial year after its last one was hit by disruption from the acquisition of a rival and the addition of over 200 stores, it said today.
The company sells everything from washing powder to boxes of chocolates to packs of batteries for the single price of £1.
It posted a 4.9% drop in underlying sales for the six months ended March 27, its fiscal second half.
Forecasting it was still on track to broadly meet market expectations for full-year profit, Poundland said management focus on converting the 99p Stores it acquired last year and stock challenges arising from the enlarged group had hurt sales.
Poundland, which increased its store estate by 60% in its last financial year, also said a drop in numbers on the UK’s shopping streets had taken its toll.
But chief executive Jim McCarthy, who is due to retire in July, said he was confident the sales decline would reverse in the coming year, in spite of lower footfall levels, as the acquisition bedded down and Poundland traded as one company.
“I’m very optimistic, indeed confident, that we are doing the right things that over the course of the next twelve months, particularly the second half we will see an improving performance in like-for-like sales,” he said.
He said he expected those sales to return to Poundland’s historic average of flat to 2% growth.
Poundland also said the combination with 99p Stores was on track to deliver its targeted earnings benefits, and guided it would open fewer new stores in the current financial year.
The consensus forecast for Poundland’s pretax profit before 99p Store trading losses for the year ended March 27 stands at £39m, from a range of £36-42m.
The company trades as Dealz in Ireland.
