Retailer hit by 43.1% profit dip
Discount retailer Poundland has seen its shares drop in value by almost 20% after posting a significant decrease in sales and profits. At the time of writing, the company's shares had dropped to 210.5p.
Half-year pre-tax profits dropped to £5.3m – a fall of 43.1% on last year. The company attributed the decline to an exceptionally strong period last year, which saw a later Easter and great demand for loom bands.
Darren Shapland, Chairman of Poundland, commented: “We traded through the first half against an exceptional period last year. We opened a net new 52 shops in the half and are well placed for our critical third quarter, in addition 99p Stores will be an accretive acquisition.”
The retailer recently purchased its main rival – 99p Stores, which it said helped boost its total level of sales.The acquisition was approved by the UK’s competition watchdog in September. The company has also recently been trialling stores in Spain, which it says have so far been successful.
Poundland remained optimistic about its outlook, but pinned its hopes on improving sales at Christmas. Jim McCarthy, Chief Executive of Poundland, commented: “The sales comparable in the second half are softer and our Christmas range is our best ever. However, we have seen highly volatile trading conditions so far in the third quarter. The quarter’s performance therefor depends more than ever upon the last six weeks’ trading towards Christmas.”
The retailer launched its own range of cosmetics – Make Up Gallery – in October last year, featuring more than 100 different products all priced at £1. The range was said to be a huge success and was expanded in April this year.