Pepco H1 revenue up despite inflation challenges
Pepco Group, owner of Poundland and Pep&Co, has released its financial results for H1, revealing a 17.2% increase in revenue to £1.9 billion (€2.3 billion) on a constant currency basis.
For the first half ending 31 March 2022, Pepco Group shared the following results:
- Underlying EBITDA was up 7.3% to £296 million (€347 million).
- Underlying profit before tax increased by 28.5% to £123 million (€144 million).
- Closing net debt of £1.1 billion (€1.4 billion), £146 million (€171 million) higher due to growth in store footprint.
- "Record" H1 store openings, with 235 new openings and 586 store renewals.
The group's sales growth was led by "positive" Easter performance, promotional campaigns and customers returning to stores.
However, in Western European markets, inflation has resulted in lower consumer spending. In the UK the group claims the cost-of-living crisis has impacted customers’ disposable income as they scale back on non-essential purchases in the short term. To target this, Pepco Group is trying to protect prices for its customers whilst absorbing some of the input inflation, resulting in a decline in the group's gross margins.
Trevor Masters, CEO Pepco Group, said: “We are proud of the group’s performance in the first half of this year and the strategic progress made across the business. Despite a challenging macro environment, we accelerated our strategy, including our store opening programme, which remains the key driver of value creation for the business.
"We have maintained our market leading position on prices and through our continued focus on reducing the cost of doing business, we have been able to shield customers from price rises on some of our products at a time of significant inflationary pressure on household budgets.”