Pepco Group records strong FY24 financial results

European variety discount retailer Pepco Group, in its preliminary unaudited results statement for the 12 month period said that revenue of 6.2 billion euros, increased by 10.2 percent, driven by new store growth. Like-for-like (LFL) revenue declined by 3.2 percent during FY24.

Pepco revenue increased by 14.2 percent; Poundland by 0.2 percent and Dealz Poland was up by 39.5 percent. Pepco LFL was down 2.8 percent, with an improving performance through the year, and a positive LFL since September 2024. Poundland LFL was down 3.6 percent and Dealz Poland LFL declined by 4.8 percent impacted by clothing and GM transition to Pepco-sourced products.

Commenting on the preliminary results, Andy Bond, non-executive chair, said in a statement: “We grew underlying EBITDA by a quarter to 944 million euros across the group, ahead of expectations, with a strong recovery in gross margin of almost 400 basis points, driven by the performance of our core Pepco brand.”

“I am pleased to have handed the reins of the business over to our new CEO, Stephan Borchert, effective 1st October 2024. Stephan brings a wealth of experience in retail businesses internationally alongside a strong track record of delivering results,” Bond added.

The group opened 392 net new stores during the year under review leading to a total of 4,948 stores in operation as at September 30, 2024. Pepco, Poundland and Dealz Poland added 331, 13 and 48 new stores, respectively.

Gross margin for the year improved 390 basis points to 43.9 percent, driven by sharp recovery in Pepco, up 530 bps. Underlying EBITDA of 944 million euros improved by 25.2 percent, with EBITDA margin up 180 bps to 15.3 percent.

The company saw strong Pepco EBITDA growth of 41.7 percent to 785 million euros. While Poundland EBITDA was down 21.5 percent to 153 million euros; Dealz EBITDA increased by 242.9 percent to 24 million euros. Pepco Group reported an underlying PAT of 179 million euros, up 14 percent year-on-year.

Commenting further on the trading performance, Stephan Borchert, said: "Within the Group, I see the Pepco concept itself as our key engine for future strategic and financial growth, particularly in Pepco's CEE heartland. Pepco's like-for-like performance has been positive since the start of September - an encouraging start.”

The company is initiating a new capital returns policy and inaugural FY24 full year dividend.