Pepco reports sales growth, profit declines

European discount retailer Pepco Group reported FY23 revenue of 5,649 million euros, up 17.7 percent on a constant currency basis, driven by Pepco growth of 24.8 percent and Poundland Group growth of 8.4 percent.

The company’s like-for-like revenues grew 6 percent during the year under review with Pepco growth of 6.3 percent and Poundland Group of 5.6 percent.

Commenting on the results, Andy Bond, executive chair of Pepco Group, said: “Despite a challenging market backdrop, we delivered another year of strategic progress and record sales of 5,649 million euros, against a strong prior year comparative.”

Pepco posts decline in annual profit

The company said in a preliminary results statement that FY23 underlying EBITDA of 753 million euros, rose 3.1 percent on a constant currency basis. EBITDA declined 10 percent, while underlying PBT of 202 million euros was down 33.7 percent at constant currency.

“That said, our overall performance was mixed with a disappointing profit outturn. As we laid out at our Capital Markets Day in October, we are acting decisively to address this, reaffirming our strategy to deliver more measured growth,” added Bond.

The company further said that gross margin for the year was 40.1 percent, with an expected improvement in FY24 as cost input inflation eases.

Pepco Group’s total number of stores at the end of the year was 4,629, with 668 net new stores. The company expects to open at least 400 new stores across all formats in FY24 with the Pepco brand accounting for the highest number.

Commenting on the retail expansion, Bond said: “We opened a record number of 668 net new stores, primarily with the Pepco brand in Central and Eastern Europe, but also in Western Europe, with new store openings in the region approaching half of the total introduced – amid encouraging progress into Western Europe in countries such as Spain and Italy.”