Business

Poundland shares fall after sales slowdown

Poundland sign Image copyright Getty Images

Shares in Poundland have fallen after it reported slowing sales and said the first half of the financial year would be "relatively subdued".

The budget retailer said sales on a constant currency basis grew by 4.1% in the 11 weeks to 14 June.

But that was down from growth of 7.1% seen in the previous quarter, and below the 11.8% full-year growth rate.

The figures overshadowed news of an 18.6% rise in underlying profits to £43.7m for the year to 29 March.

Statutory profits jumped 68.3% to £36.2m, with the increase being helped by last year's figure being hit by costs relating to Poundland's stock market flotation.

Sales rose 11.9% to £1.12bn, the first time they have broken the £1bn barrier.

Shares in Poundland closed 3.5% lower.

Expansion plans

The first half of the last financial year was "an exceptional period", with factors such as the one-off "loom band" craze, Poundland said.

"This means that we expect the seasonally less important first half of the current financial year to be relatively subdued."

By the end of March, Poundland had 588 stores in the UK and Ireland, and the retailer said it expected to open at least 60 net new stores in the UK and Ireland in the current financial year.

It also expects to have 10 stores open in Spain - where it trades under the Dealz brand - by the end of the first half of the year.

Poundland chief executive Jim McCarthy said its stores in Spain had "got off to an encouraging start".

Earlier this year, Poundland said it agreed to buy the 99p Stores chain for £55m, but the proposed deal is currently being investigated by the competition watchdog.

The company said it had been "surprised and disappointed" that the Competition and Markets Authority (CMA) had not allow the deal to complete after the first phase of the CMA investigation.

The CMA decision on the deal is expected on 23 October, the retailer said, adding that its integration planning is "well advanced".

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