DISCOUNT retailer Poundland has unveiled plans to create 1,000 jobs over the coming year after its first set of results as a listed company showed “savvy customers” have helped it rack up almost £1 billion in annual sales.
With 528 outlets across the UK and Ireland – where it operates under the Dealz banner – the chain has a long-term goal of growing its estate to more than 1,000, and today revealed sales growth accelerated in recent months.
The firm, which has also made its first foray into the Spanish market this week with the opening of a Dealz branch in Torremolinos, said it aimed to open at least 60 sites this year as budget-conscious shoppers continue to hunt for bargains despite the recovery. Industry data earlier this week showed cut-price grocers Aldi and Lidl grew their sales by 35 per cent and 22 per cent over the past three months.
Chief executive Jim McCarthy said the expansion into Spain as part of a two-year pilot targeting ten stores, combined with growth in its home market, could see it win about 750,000 more customers a week.
He added: “We are planning to open at least 60 net new stores during the next financial year, including Dealz stores in Ireland and Spain. As a result, we estimate that we will create a net 1,000 jobs.”
McCarthy’s comments came as Poundland, which raised about £375 million when it made its stock-market debut in March, reported an annual underlying pre-tax profit of £36.8m, up from £29.8m a year earlier.
Total sales for the year to 30 March grew 13.3 per cent to £997.8m, helped by the net opening of 70 stores, and McCarthy said sales in the first three months of its new financial year had benefited from the late Easter, jumping 18 per cent on the same period last year to £262.6m. He added: “After a pleasing start to 2014-15 we are confident of further progress through the year whilst recognising our critical third-quarter lies ahead of us.”
Darren Shirley, an analyst at house broker Shore Capital, said today’s results were ahead of its forecasts, highlighting the chain’s appeal “to consumers from all socio-economic backgrounds and increasing support from manufacturers and suppliers”.
“That said, we do not anticipate the outstanding first-quarter momentum will be maintained as comparatives toughen, particularly through the second half,” he added.
Shirley said Poundland’s underlying pre-tax profits for the current year are expected to rise to about £44m, boosted by stronger margins.
The retailer, which sells goods such as Cadbury’s chocolate and Fairy washing-up liquid for £1, opened its first store in Burton-on-Trent in 1990. Its growth will be supported by a purpose-built 350,000 sq-ft distribution centre in Essex, due to open in August.
McCarthy said: “We believe shopping behaviours adopted during the last five or six years will continue as the economy and consumer confidence improve and that Poundland is well placed to benefit further from increased footfall and discretionary spending.”
Bottom-line profits fell by 40.7 per cent to £13.9m due to an increase in charges, primarily associated with the group’s stock-market flotation.