Growth slows at Poundland
Discount retailer Poundland cautioned that it expects first half trading to be subdued after sales growth slowed.
The firm, which sells all its products at the single price point of £1 from 588 stores in the UK and Ireland, said it made an underlying pre-tax profit of £43.7m in the year to March 29.
That was up 19 per cent and in line with analysts’ average forecasts, while sales grew 12 per cent to £1.12bn.
But sales on a constant currency basis for the 11 weeks to June 14 grew 4.1 per cent, a slow down from growth of 7.1 per cent in the fourth quarter of the firm’s 2014-15 year and growth of 10.2 per cent in its third quarter.
With recession-era shopping habits entrenched, discount retailers, both in general merchandise and food, are taking sales from Britain’s “big four” supermarkets - Tesco, Asda, Sainsbury’s and Morrisons.
However, there are signs major price cuts and service improvements by the big four have started to stem the flow of shoppers to the discounters.
Poundland said it expects the seasonally less important first half to be relatively subdued, reflecting tough comparative numbers and the weak euro.
It said the outlook for the second half was better, reflecting softer sales comparables, a very strong first half opening programme of at least 40 net new stores, against 28 stores last year, and the annualisation of last year’s new store programme.
In February Poundland said it had agreed to buy smaller rival 99p Stores for £55m. However, the deal is currently subject to a probe by the competition watchdog, with its findings not due until October.