Sunday, December 22, 2024

Discounter Pepco books €775m impairment on Poundland

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European discount retailer Pepco Group, which trades as Dealz here, has reported an annual net loss of €662m, citing an impairment charge of €775m for its Poundland business in the UK on a weak performance and outlook.

The Poundland impairment charge was primarily goodwill and followed a significant decline in performance in the year to September 30, the group said today.

Poundland’s like-for-like sales fell 3.6% and its profit outlook weakened amid increasing competitive and cost challenges.

“At Poundland, recent performance has been very challenging, impacted by declines in clothing and general merchandise following the transition to Pepco-sourced product ranges at the start of the year,” new Pepco Group CEO Stephan Borchert said.

“We are taking swift action to get Poundland performance back on track,” he said.

The group as a whole reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €944m in 2023/24, in line with guidance of at least €900m and up from €754m in 2022/23.

Revenue was a record €6.2 billion, up 10.2%, driven by 392 net new stores. The group ended the period with 4,948, including 836 Poundland stores.

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