Poundland reports 34% jump in first half profits

A Poundland store in London.

A Poundland store in London. - Credit: PA

Poundland said today that its profits have jumped by a third as it continues to attract value-conscious-shoppers and adds new stores to its estate.

The West Midlands-based retailer, which has 556 stores in the UK and Ireland, opened its first outlets in Spain, called Dealz, in July and plans to have 10 over the next two years.

It added a net figure of 28 new stores in the UK and Ireland over the last six months and has long-term plans for 1,000 outlets, adding that it expects “to see many years of future growth.”

Its half-year results beat expectations today as total sales jumped 15% to £528.2 million, with like-for-like sales up 4.7% in the 26 weeks to September 28. Underlying pre-tax profits jumped 34.2% to £12.6 million.

Shares rose almost 4%.

During the period it launched its first celebrity-endorsed product range, called Jane Asher’s Kitchen, of cake mixes and baking accessories.

It has also launched a jewellery range, called Purple Ivy, and a Make-Up Gallery cosmetics range over the last six months.

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Chief executive Jim McCarthy said: “In addition to strong trading in the UK, our international expansion plans are well underway with three multi-price Dealz stores now open and trading well in Spain.

“While our full year outcome, as always, is dependent on delivering a good Christmas for our customers, I remain confident of further progress throughout the year.”

The business said it generates around half of its earnings in the third quarter of its financial year, which includes the key Christmas period.

It added it attracted a broad range of shoppers, with around 54% in the top ABC1 professional social category.

The firm said it was benefiting from a change in consumer behaviour, where people shopped more often and compared prices online. It said: “The transparency of our single price offer continues to serve us well.”

The growth is being supported by a third, purpose built 350,000 sq.ft. distribution centre at Harlow, which opened in September.

Poundland said it looked forward to the second half of the year with confidence.

The firm listed on the stock market earlier this year and sells goods such as Cadbury’s chocolate and Fairy washing-up liquid for £1. It opened its first store in Burton-on-Trent in 1990.