The Guardian:Poundland profits crash as 99p Stores buyout takes its toll

2016-6-16 17:28:22
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Steinhoff has amassed a near-23% stake in Poundland and said on Wednesday it was considering a possible offer. It is on the prowl again after failing to buy Home Retail Group, the owner of Argos, and French electrical goods group Darty in the last few months.

Steinhoff, chaired by the retail mogul Christo Wiese, already owns furniture chains Harveys and Bensons for Beds in the UK, as well as stakes in fashion chain New Look and grocer Iceland.

Jim McCarthy, Poundland’s chief executive, will hand over to Kevin O’Byrne in two weeks. He said the retail environment remained challenging, but expressed confidence that Poundland would return to growth.

Poundland has scaled back new store openings, after opening a net 60 last year, to focus on improving its 896-store business.

The retailer’s underlying profits – earnings before interest, tax, depreciation and amortisation – fell 4.1% to £56.9m last year. Total sales, including new stores, rose 9.7% on a constant currency basis to £1.2bn.

Darren Shapland, the chairman, said: This has been a challenging but transformative year for Poundland and the acquisition of 99p Stores has further strengthened our position as Europe’s biggest single-price discounter.”

McCarthy said the company had grown from 146 stores to about 900 during the 10 years he was at the helm. Sales rose by £1bn during that time, and Poundland floated on the stock exchange in March 2014.

Steinhoff has amassed a near-23% stake in Poundland and said on Wednesday it was considering a possible offer. It is on the prowl again after failing to buy Home Retail Group, the owner of Argos, and French electrical goods group Darty in the last few months.

Steinhoff, chaired by the retail mogul Christo Wiese, already owns furniture chains Harveys and Bensons for Beds in the UK, as well as stakes in fashion chain New Look and grocer Iceland.

Jim McCarthy, Poundland’s chief executive, will hand over to Kevin O’Byrne in two weeks. He said the retail environment remained challenging, but expressed confidence that Poundland would return to growth.

Poundland has scaled back new store openings, after opening a net 60 last year, to focus on improving its 896-store business.

The retailer’s underlying profits – earnings before interest, tax, depreciation and amortisation – fell 4.1% to £56.9m last year. Total sales, including new stores, rose 9.7% on a constant currency basis to £1.2bn.

Darren Shapland, the chairman, said: This has been a challenging but transformative year for Poundland and the acquisition of 99p Stores has further strengthened our position as Europe’s biggest single-price discounter.”

McCarthy said the company had grown from 146 stores to about 900 during the 10 years he was at the helm. Sales rose by £1bn during that time, and Poundland floated on the stock exchange in March 2014.

 

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