Poundland eyes 1,000 UK shops as sales grow

Poundland aims to have 1,000 stores in the UK Poundland aims to have 1,000 stores in the UK

Related Stories

The discount retailer Poundland is planning to expand as its sales continue to grow.

The firm, which already has 458 stores in the UK and Ireland, plans to open 1,000 stores in the UK "over time".

The decision comes after the chain saw a 15% rise in total sales to £880m in the year to the end of March.

"The discount sector is now a mainstream feature of the UK retail scene," said Poundland boss Jim McCarthy.

"Over time I'm confident that we will have over 1,000 Poundland stores in the UK," he added.

Poundland, which sells all its items priced at £1 or less, served 4.5m customers each week in the 12 months to March, driving its pre-tax profit before exceptional items up 29 % to £23.1m.

It opened 69 new stores over the year, including 17 in Ireland where it operates under the Dealz brand and items are priced at 1.49 euros.

Mr McCarthy said its rapid expansion in Ireland - where it has gone from just two stores in 2011 to 26 now - demonstrated its potential for further international growth.

"We have the capability to generate positive financial returns in new geographies quickly," he said.

West Midlands-based Poundland was bought by private equity firm Warburg Pincus three years ago for around £200m.

It hired Andrew Higginson, Tesco's former finance director, as chairman last year.

Possible float?

There has been speculation that Poundland could float to become a publicly listed company. The strong results mean the possibility of an initial public offering (IPO) has been rumoured once more.

Mr McCarthy said he understood the strong performance "would prompt some of the questions" (about an IPO) but declined to comment further.

Neil Saunders, managing director at retail consultancy Conlumino, said he believed a flotation was a possibility, but not immediately.

"It's got to a size that's pretty impressive now and there has to be a next step whether it's sold on or goes public."

Discounters rule

Discount retailers have outperformed the market in the economic downturn as cash-strapped consumers have sought to make savings. On Monday, Aldi reported 2012 profit had more than doubled.

Mr Saunders said Poundland had done well because it was "very much in tune with the consumer mindset at the moment."

He said its low price point for all products was particularly attractive to consumers because it stopped them overspending.

"In other stores there is a temptation to overspend. At Poundland the low price point puts temptation out of the way and means people genuinely save money."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Business Live

  1.  
    08:19: House prices
    The sun illuminates property in the historic city centre of Bath

    Nationwide says house price growth got off to a weak start in January with property values up just 0.3% in the month and 3.8% higher than the same month a year earlier. That marks the lowest rates of house price growth for 14 months.

     
  2.  
    Saudi oil Via Email Neil Carter, Business live reader from Devon

    "In the eighties it was one to three dollars a barrel. Today I expect that it is in the region of six to eight dollars. Some newer fields may have higher costs due to higher exploration and extraction costs, so maybe ten to twenty dollars a barrel."

     
  3.  
    07:55: Diageo results Radio 5 live

    "The results today show we are seeing a pick up in momentum," Diageo's John Kennedy tells Radio 5 live breakfast. "If you look at the overall picture... we've seen an emerging market slowdown... but the big developed markets... are performing well despite a muted recovery particularly in Europe." India is performing strongly, as is Mexico, he adds.

     
  4.  
    07:51: Diageo results
    guinness

    Distillers Diageo say profit for the six months to the end of December dropped to £1.36bn from £1.65bn as the pound strengthened and they suffered "lower income from associates and joint ventures".

     
  5.  
    07:41: Shell earnings

    Shell's has also pulled $15bn of investment in oil exploration over the next three years. It says organic capital investment in 2015 is expected to be lower than 2014 levels. "Shell has options to further reduce spending, but we are not over-reacting to current low oil prices and keeping our best opportunities on the table," it adds.

     
  6.  
    07:24: New fund BBC Radio 4

    Nigel Wilson, chief executive of asset manager and insurer Legal & General, says the firm will put £1.5bn for a new infrastructure fund in the UK on Today. "We are very long-term investors - 20, 30, 40, 50, years," he says. Longer-term financing from fund managers like him are the future rather than shorter-term bank lending, he says. Will £1.5bn be enough? He's attracting outside investors and will borrow money to grow the fund to about £25bn.

     
  7.  
    07:15: Royal Mail chairman
    mail

    Donald Brydon will step down as chairman of Royal Mail, the company says. The company is looking for a new one. Mr Brydon will carry on until the firm's annual meeting in the summer.

     
  8.  
    07:10: Shell earnings

    Shell has reported full year earnings (on a current cost of supply basis) of $19bn compared with $16.7bn a year earlier. Fourth quarter earnings were also higher at $4.2bn compared with $2.2bn for the same quarter a year ago.

     
  9.  
    06:58: Eurozone union BBC Radio 4

    Bank of England Governor Mark Carney yesterday said the eurozone needs fiscal union to manage monetary union. James Bevan, an asset manager CCLA, tells Today "a root cause of the problem is absence of growth," low money rates alone won't get growth going.

     
  10.  
    06:48: Shell results
    Car lights are seen streaking past an oil rig extracting petroleum

    Some discussion here on the business livepage as to just how cheap it really is to extract oil in Saudi Arabia. So we thought we'd open it up to the floor. How much do you think it costs Saudi Arabia - per barrel - to extract oil from the ground. Send your answers to bizlivepage@bbc.co.uk or tweet @bbcbbusiness. Usual rules apply: no peeking at the internet.

     
  11.  
    06:38: Shell results Radio 5 live

    How does the lower oil price affect alternative ways of exploring for oil such as shale? Michael Hewson of CMC markets tells Wake Up to Money shale oil exploration is largely dead in the water. Getting shale oil out of the ground is still far more expensive than getting oil out of the ground in Saudi Arabia, he says. What pushed up Saudi Arabia's oil extraction costs was the welfare programme the country introduced when the Arab Spring broke out in 2011. He adds Saudi Arabia can live with a low oil price for a long time.

     
  12.  
    06:23: Shell results Radio 5 live

    "I think there is a good chance that we could see a reduction in [Shell's] dividend and that could affect pension funds here in the UK," Michael Hewson of CMC markets tells Wake Up to Money. He doesn't see that happening just yet, but if the oil price continues to fall, or stays low for a long time, then he thinks it is unavoidable.

     
  13.  
    06:11: Shell results Radio 5 live

    Michael Hewson of CMC markets tells Wake Up to Money he expects Shell's revenues will be slightly lower when it publishes results later this morning. He is, naturally, interested in how Shell is coping with the lower oil price. He doesn't think "we've hit bottom yet" in terms of oil prices. "The Saudi's have still got their foot to the floor in terms of market share," he says. "The low hanging fruit in terms of getting oil of out the ground is gone," he adds.

     
  14.  
    06:01: Apple analysis
    apple

    Apple caught up with Samsung as the world's biggest smartphone seller in the fourth quarter of 2014, thanks to booming sales of its new iPhone 6, market researcher Strategy Analytics said. Strategy Analytics said Apple flogged 74.5 million handsets in the fourth quarter, compared to 51 million a year ago. Samsung shifted the same number, which for them was a reduction from 86 million the previous year.

     
  15.  
    06:01: Matthew West Business Reporter

    Morning. Do get in touch at bizlivepage@bbc.co.uk or tweet us @bbcbusiness.

     
  16.  
    06:00: Howard Mustoe Business reporter

    Good morning everyone. Overnight, McDonald's has said Don Thompson will retire as chief executive of the fast food firm to be replaced by British-born Steve Easterbrook, the company's current chief brand officer. We have house price data from the Land Registry at 09:30 and Shell's results to look forward to. Stay tuned.

     

Features

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.