Poundland to deliver record revenues despite shipping turmoil

Pepco, the owner of Poundland and Dealz, has published its trading expectations for FY24. The retailer expects to achieve "record revenues" despite supply chain hiccups.

Group revenues for the 51 weeks to 22 September are up by 10%, driven by store expansion. While Group like-for-like revenues have remained behind the prior year overall, Pepco has seen progressive quarterly improvement through the year.

In line with its previous guidance, Pepco has opened 64 net new stores during the fourth quarter. It expects to finish the year with 390 net new stores overall.

Pepco has continued to be impacted by supply chain issues, such as Red Sea shipping delays, This has affected the consistent and timely availability of stock in stores. To boost revenues during the first half of FY25, the company will ship products earlier, optimise shipping routes and selectively utilise faster carrier options.

Andy Bond, Executive Chair of Pepco Group, said: "I am pleased with the positive progress we have made this year, particularly in rebuilding profitability in our core Pepco business in Central and Eastern Europe, with further opportunities for continued improvement. Group like-for-like revenues in the fourth quarter remained lower than the prior year, partly related to ongoing supply chain disruption, nevertheless, we expect to deliver record revenue and underlying EBITDA in FY24, driven by significant improvements in gross margin year-on-year.

"While there is much more to do, particularly around like-for-like sales progress, we remain committed to expanding our price leadership position, enhancing the core customer proposition and improving our supply chain capabilities. With these foundations, as well as a focus on disciplined capex to drive free cash generation, we expect to deliver further strategic progress in FY25."

Looking ahead, the group expects to report record revenues for the full year in excess of £5 billion (€6 billion). It expects a FY24 underlying EBITDA of at least £750 million (€900 million), approximately 20% higher than the year prior.

Last month, Poundland confirmed the restructuring of its head office in Walsall, as it plans to reduce costs across the business. The value retailer is said to have placed a number of jobs under consultation in an effort to work "smarter and more efficiently".

Pepco will publish its preliminary results for the 12 months ending 30 September 2024 on Tuesday 10 December 2024.