As expected, the trading group Pepco Group NV closed the 2023/24 financial year with a new sales record. Although the parent company of discounters Pepco, Poundland and Dealz made progress with its reforms, it also had to announce a large loss on Tuesday.
New openings ensure a strong increase in sales
According to preliminary figures, group sales in the financial year ended at the end of September amounted to 6.17 billion euros. This was higher than ever before in the company’s history. Adjusted for the contributions from the now discontinued activities in Austria, revenues rose by 10.2 percent compared to the previous year (+8.1 percent adjusted for currency effects). However, the retailer only owed the significant increase to the opening of 392 additional branches over the course of the year. Like-for-like sales fell by 3.2 percent.
High value adjustments result in deep red numbers
Thanks to a significantly improved gross margin, earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects grew by 25.2 percent to 944 million euros, also reaching a new record.
However, the group had to make value adjustments amounting to 775 million euros for the currently weak Poundland chain. As a result, the bottom line was a net loss of 662 million euros. In the previous financial year, the Pepco Group had achieved a surplus of 108 million euros. Adjusted for special effects, net profit rose by 14.0 percent to 179 million euros.
Chairman Andy Bond praises the successful reforms
Chairman of the Board of Directors Andy Bond was satisfied with the results. “I am proud of the progress we have made over the past twelve months,” he said in a statement. “We increased adjusted EBITDA at group level by a quarter, exceeding expectations.” The Chairman also praised the “strong recovery” of the gross margin.
The company set itself goals at the beginning of the year to increase profitability and achieved them, emphasized Bond. Nevertheless, there is still more to be achieved.