Pepco Group: Poundland poses further problems in first half

Retail group Pepco Group NV increased its sales in the first half of 2024/25, but faced further difficulties with the Poundland retail chain.

In the six months to March 31, the discounter generated sales of 3.3 billion euros, according to preliminary figures published on Thursday. This represents growth of 4.3 percent compared to the same period last year.

Earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for special items, amounted to 460 million euros, 5.5 percent down on the first half of 2023/24. Overall, the company had to accept a net loss of 155 million euros. Adjusted for special items, net profit fell by 44.3 percent to 73 million euros.

Of the three retail chains Pepco, Dealz and Poundland, which belong to the Pepco Group, it was again the latter that continued to cause problems. While Pepco achieved a sales increase of 9.3 percent with revenues of 2.2 billion euros and Dealz a gain of 13.8 percent with 182 million euros, Poundland's sales fell by 6.5 percent to 985 million euros.

Group chief executive officer: Poundland disposal by end of financial year

“At Poundland, the commercial business remains challenging, which is reflected in a lower-than-expected result for the first half and a weaker outlook for the full year,” said Stephan Borchert, chief executive officer of the Pepco Group. “Barry Williams, who was re-appointed as managing director of Poundland in March 2025, and his team are actively driving a turnaround plan to get the business back on track by focusing on its traditional core strengths.”

At the beginning of March, the group announced that it wanted to focus on a leaner portfolio in the future and was therefore considering a separation from Poundland. These plans are to be continued following the figures now published, with a disposal expected before the end of the financial year, Borchert explained.

The different development of the retail chains is also reflected in the group's outlook for the 2025 financial year. The expectations for Pepco announced in March, with sales and adjusted EBITDA growth in the high single-digit range, as well as EBITDA from Dealz of around 30 million euros, remain unchanged.

For Poundland, meanwhile, expectations have been lowered from the previous forecast, an EBITDA of 50 to 70 million euros, to around 0 to 20 million euros. This is also due to the difficult trading conditions, which have been further exacerbated by the sales of old stock and problems with product availability.