Pepco Group revenues up, outlook positive despite uncertain trading conditions

European discount retailer, Pepco Group, reported full year revenues of 4,824 million euros, up 17.4 percent on a constant currency basis.

Full year underlying EBITDA on a constant currency basis is anticipated to be within a range of 735 million euros to 750 million euros, which is in-line with the company’s year-on-year growth expectations.

On an actual currency basis, underlying EBITDA is expected to be in the range of 720 million euros to 735 million euros.

Commenting on the results, Trevor Masters, CEO of Pepco Group, said: “These are very challenging times for families across Europe and we remain absolutely committed to helping customers on a budget by offering great range, value and convenience – and we are confident this will enable us to expand our customer base going forward.”

“As a result of our continued focus on driving progress under our key strategic pillars, we remain confident of our ability to continue to grow our EBITDA, in line with our historic run-rate, in the absence of any further deterioration of macro-economic trading conditions,” Masters added.

Pepco Group remains positive despite uncertain economic conditions

The company, owner of the Ppeco and Dealz brands in Europe and Poundland in the UK, said, Pepco brand revenues rose by 28.7 percent during the year under review, while Poundland Group sales increased 5 percent.

Group like-for-like (LFL) growth was 5.2 percent with Pepco registering 7.4 percent LFL rise and Poundland Group, 2.6 percent. The company added that the group’s September LFL growth was 15.5 percent providing a strong exit rate into FY23.

The company added that the demand for its products remains strong even against the backdrop of significant uncertainty in the macroeconomic environment, exacerbated by the impact of geopolitical events.

“Both clothing and food remain resilient categories in the Polish and wider CEE retail sector. The outlook across the UK remains challenging as constraints on consumers’ disposable income continue,” Pepco Group said in a statement.

Pepco Group continues to expand retail footprint

The company opened 516 net new stores under the accelerated store expansion programme – the group’s single biggest driver of value creation – in FY22, ahead of its upgraded target of 450 new stores.

In Pepco, 446 new stores were opened, ahead of 400 guidance, including 163 new stores in the Western European markets of Italy, Spain, Germany and Austria.

Within the Poundland Group 70 new stores were opened almost exclusively in the Dealz Poland business excluding the closure of 59 Fulton’s stores.

The company is now targeting to open at least 550 net new stores in FY23 alongside entry into the new territories of Greece and Portugal for the Pepco brand.