The trading group Pepco Group NV has set a new sales record in the 2022/23 financial year. However, the profit was clearly below the previous year’s level. This emerges from preliminary results that the company published on Tuesday.
Sales reach a new record level
In the financial year ended at the end of September, sales of the group, which includes the discounters Pepco, Poundland and Dealz, amounted to 5.65 billion euros. This corresponds to an increase of 17.1 percent (currency-adjusted +17.7 percent) compared to the previous year.
However, a large part of the increase was due to new openings. Like-for-like sales increased by just 6.0 percent after adjusting for currency effects. At the end of September, the group had a total of 4,629 stores, 668 more than a year earlier. The Pepco retail chain alone expanded its branch network by 556 locations over the course of the most recent financial year.
However, investments in expansion, higher costs along the supply chain, the effects of inflation and increased interest rates caused net profit to slip by 41.1 percent (-42.3 percent adjusted for currency effects) to 102 million euros.
The retailer is slowing down its pace of expansion
Executive Chairman Andy Bond, who has led the group since the resignation of CEO Trevor Masters, described the results as overall “mixed” in a statement. Despite the new sales record, the profit development was “disappointing,” said Bond.
At the same time, he confirmed the strategy change decided in September. In the future, after the rapid expansion in recent years, the group will focus on “more moderate growth” and focus more on improving profitability, emphasized Bond.