Discounter Pepco has reported a net loss of €662 million for full-year 2024, related to a non-cash impairment of €775 million, following a weak performance and outlook for its subsidiary, Poundland.
Like-for-like (LFL) revenue for its financial year ended 30 September declined by 3.2%, with the Pepco business witnessing a 2.8% fall, despite improved performance during the year and positive LFL growth since September.
Poundland’s LFL revenue fell by 3.6%, while Dealz Poland saw a decline of 4.8%, impacted by clothing and a GM transition to Pepco-sourced products.
Stephan Borchert, chief executive officer, said, “At Poundland, recent performance has been very challenging, impacted by declines in clothing and general merchandise, following the transition to Pepco-sourced product ranges at the start of the year.
“We are taking swift action to get Poundland’s performance back on track, focusing on a return to Poundland’s strengths. We will also closely evaluate Poundland’s overall competitive positioning and requirements for future success as an FMCG-led format. We will provide further updates on Poundland during the first half of 2025.”
Annual Highlights
Group revenue amounted to €6.2 billion, registering double-digit growth of 10.2%, compared to the previous financial year.
At Pepco, revenue increased by 14.2% during the year, while Poundland and Dealz Poland reported increases of 0.2% and 39.5%, respectively.
Andy Bond, non-executive chair, stated, “We grew underlying EBITDA by a quarter, to €944 million, across the group – ahead of expectations – with a strong recovery in gross margin of almost 400 basis points, driven by the performance of our core Pepco brand.”
In September of this year, the group noted that its fourth-quarter underlying revenue was lower than the previous year, partly reflecting ongoing supply chain disruption.
‘More To Achieve’
Bond added, “We started the year with a number of objectives, which included rebuilding Pepco’s profitability in its core Central and Eastern European – CEE – market, gross-margin recovery, adopting a more disciplined approach to investment with more targeted growth, reviewing underperforming areas of the business, and delivering stronger cash generation.
“We have delivered on these objectives, but there remains more to achieve. As a result of renewed confidence in our future, we are announcing an inaugural full-year dividend for the group.”
