Poundland owner Pepco interims slide on Covid-19 impact
Steinhoff International Holdings Ltd.
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07:46 20/03/24
Poundland owner Pepco Group reported a fall in interim profits as the coronavirus pandemic hit sales with customers still wary of going into stores even after the easing of lockdown measures.
The company said first half profits fell to €89m (£80m), although sales had been recovering week on week since an April lowpoint when lockdowns were in full force. Revenue rose 9.7% in the six months to March, after having been up 14.4% in the five months to February.
Pepco operates 823 Poundland stores in the UK and Ireland as part of a 2,844-strong estate across Europe, including the Dealz chain and is part of South Africa's Steinhoff group.
"From its low point in April, absolute revenue levels increased week on week through this period to levels above our initial post-Covid expectations, though below normal levels, as our customers remain reticent about visiting busy locations, including retail stores," the company said.
"Our financial and operational planning is based upon revenue remaining below historical norms for the remainder of the calendar year."
As Poundland qualified as an “essentials” retailer it benefited initially from customer stockpiling of cleaning, healthcare and food products, Pepco added.
However, the Covid-19 lockdown still led to the temporary closure of 130 stores and the remaining 700 or so outlets traded through significantly reduced visitor numbers at 60% of expected sales levels for the first four weeks of the lockdown.
The group has reduced operating costs at Poundland, with a further 76 store leases renegotiated in the six months at levels ahead of expectations.