19th Nov 2015 07:59
LONDON (Alliance News) - Poundland Group PLC on Thursday said its pretax profit fell in the first half due to higher costs and said like-for-like also declined due in part to tough comparatives, though it said the acquisition of 99p Stores Ltd has progressed in line with its expectations.
The FTSE 250-listed single-price discount retailer said its pretax profit for the 26 weeks to September 27 was GBP5.3 million, down from GBP9.3 million a year earlier, mostly due to exceptional distribution and administrative expenses it incurred in the half.
Total revenue rose to GBP561.1 million, up from GBP528.2 million, with underlying sales rising 5.6% in constant currencies but like-for-like sales down 2.8%, compared to a 4.7% rise a year earlier.
During the half, Poundland acquired 99p Stores, but the results of 99p Stores are not included in the half-year results published Thursday. Poundland said its plan to convert 99p Stores into Poundland stores has accelerated, with the majority to be completed by April 2016. It added it has already identified at least GBP25.0 million in incremental earnings accretion opportunities to be driven by the deal.
The group said it will pay an interim dividend of 1.65 pence per share, up from 1.50p a year earlier.
Poundland added a net 52 new stores in the half, growing its UK and Ireland estate to 640 stores in total, from 557 a year earlier, with 30 new stores opened in September. It has increased its UK & Ireland total store target to 1,400 from 1,070 following the 99p Store acquisition.
"The sales comparables 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 therefore depends more than ever upon the last six weeks' trading towards Christmas," said Jim McCarthy, Poundland's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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