Pepco, owner of Poundland, reports a challenging year, grappling with ongoing supply chain disruptions.
- Year-on-year like-for-like sales declining due to disrupted shipping routes, impacting stock availability.
- Despite challenges, Pepco reported a 10% increase in total revenue, driven by new store openings.
- The company forecasts substantial growth in EBITDA and anticipates record revenue in FY24.
- Pepco remains committed to enhancing its core customer offerings and supply chain capabilities.
Pepco Group, the parent company of Poundland and Dealz, has been significantly impacted by disruptions in supply chains, notably affected by militant activities in the Red Sea disrupting shipping through the Suez Canal. This has led to challenges in ensuring timely stock availability across its stores in Central and Eastern Europe.
In the face of these obstacles, Pepco recorded a year-on-year decline of 3.1% in like-for-like sales for its fourth quarter. Despite these disruptions, the group saw its overall revenue rise by 10%, primarily attributable to its strategy of opening new stores, with 64 new outlets opened in the fourth quarter alone.
The company has expressed optimism about its financial performance for the current year, projecting an underlying EBITDA of at least €900m (£787m), marking a 20% increase from the previous year. Total sales are expected to exceed €6bn (£5.3bn), with significant contributions from new store openings.
Further, Pepco anticipates ending the fiscal year with a net increase of 390 stores, aligning with their previous guidance. Andy Bond, executive chair of the Pepco Group, stated his satisfaction with the progress made in rebuilding profitability, especially in Central and Eastern Europe, and emphasized ongoing efforts to improve their supply chain and expand their market position.
Bond acknowledged the lower group like-for-like revenues in the fourth quarter, partially due to the supply disruptions. Despite this, the company remains steadfast in its goal to enhance its price leadership and overall customer proposition.
Pepco shows resilience in the face of supply chain challenges, maintaining growth through strategic store expansions and financial management.
