Pepco Group, the parent company of popular retail chains Pepco, Poundland, and Dealz, has reported strong revenue growth for both its full year and fourth quarter, despite facing challenges in the market. The company achieved a record full-year group revenue of €5.649 billion, representing a significant increase of 17.7% on a constant currency basis. This growth was driven by a 24.8% increase in Pepco revenue and an 8.4% increase in Poundland Group revenue. Furthermore, the company’s full-year underlying EBITDA is expected to reach approximately €750 million, surpassing the previous year’s €731 million.

In the fourth quarter, the group’s revenue reached €1.441 billion, demonstrating a solid year-on-year increase of 12.5% on a constant currency basis. Both Pepco revenue and Poundland Group revenue experienced growth, with increases of 12.6% and 12.4% respectively. However, like-for-like revenues remained flat in the fourth quarter, although they showed a commendable 6% increase for the year as a whole. Pepco’s like-for-like revenue declined by 2.4% in the fourth quarter due to challenging trading conditions, particularly in August and September.

Despite these challenges, Pepco Group managed to exceed its expectations by opening more stores than anticipated throughout the year. In fact, the fourth quarter alone saw a remarkable 343 new store openings, contributing to a total of 668 new store openings throughout the year. Executive Chair Andy Bond acknowledged the mixed performance of the group in the midst of a challenging market environment. He emphasized the record number of store openings and the strong double-digit revenue growth that led to achieving impressive group revenues.

Andy Bond also acknowledged the deteriorating trading environment in Pepco’s markets, particularly in Central and Eastern Europe, which resulted in lower sales, a lower gross margin than forecasted, and higher costs. As a consequence, profitability in the core markets was impacted. Nevertheless, the company is taking active steps to address these issues and mitigate their impact.

Although Pepco may not be widely recognized as a major player in the fashion retail sector, its Pep&Co line is gaining traction and helping the company establish a presence in the fashion industry. However, the unexpected warm weather in many of its markets negatively affected the demand for its ultra-budget pieces in the AW23 collection. Nonetheless, Pepco remains confident about the future and expects its ambitious store opening program to yield positive results in the next 12 months. As part of its focus on fashion, Poundland has taken over up to 71 Wilko store leases in the UK, which will carry the new range of Pepco clothing alongside Poundland’s extensive FMCG and general merchandise ranges.

Useful links:
1. Pepco official website: Visit the official website of Pepco to learn more about the company and its retail brands.
2. Poundland official website: Explore Poundland’s official website to discover its range of products and services.