24th Sep 2015 06:27
LONDON (Alliance News) - Poundland Group PLC Thursday said it will raise GBP50 million through the placing of shares in order to fund its acquisition of 99p Stores Ltd, and said that it expects core pretax profit for its full financial year to meet market expectations, although it will be weighted towards the second half.
The placing will be conducted through an accelerated bookbuild process, with JP Morgan Cazenove acting as sole bookrunner and Shore Capital acting as co-lead manager. The pricing of the placing will be decided at the close of the bookbuilding process.
The discount retailer is buying its smaller - and slightly keener priced - rival 99p Stores for GBP55 million, in a deal which was approved by the UK Competition and Markets Authority last week.
The proceeds from the raising will be used to fund the cash portion of the consideration, and Poundland expects the acquisition to be complete by Monday next week.
Poundland added that its store opening programme is ahead of plan, expecting to have opened 50 net new stores in the UK and Ireland in the first half of the current financial year, and 70 by the end of the full year.
Sales for the 14 weeks ended September 20 increased 5.9% to GBP303.2 million from GBP286.2 million in the same period the year before, and grew 4.9% to GBP532.1 million in the 25 weeks to the same date from GBP507.5 million the prior year. Like-for-like sales however declined 2.9% in the first half, compared with 4.7% growth last year.
Poundland said it remains confident in the outlook for the full year and expects pretax profit for the core business to be in line with market consensus, although profit will be phased towards the second half of the year given tough comparables in the first half, the weak euro and softer sales comparables in the second half.
The retailer will also incur higher pre-opening costs in the first half, and therefore anticipates pretax profit for the first half to be lower than the first half of the year before.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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