Pepco reports 16% decline in profit before tax
DURBAN - Steinhoff International’s subsidiary, Pepco Group, reported a 16 percent decline in profit before tax to €89 million (R1.73 billion) for the six months to end March, reflecting the Covid-19 impact which significantly reduced store trading footprint and footfall.
In the five months to end February and before the impact of Covid-19, profit before tax was up by 21.8 percent.
The Pepco Group is the fast-growing pan-European variety discount retailer and it owns PEPCO and Dealz brands in Europe and Poundland in the UK.
Group revenue increased by 9.7 percent to €1.91bn, driven by the ongoing expansion of the Group’s PEPCO and Dealz formats and by continued like-for-like growth of 0.7 percent.
However, PEPCO’s revenue was up by 15.4 percent while Dealz and Poundland reported revenue growth of 4.8 percent during the period.
Chief executive Andy Bond said the group was pleased to report continued strong operational, strategic and financial progress by all parts of the Pepco Group before the impact of Covid-19.
“We continued our store expansion programme, delivered compelling like-for-like sales growth and converted sales to profit, while at the same time investing in infrastructure and maintaining our price leadership position within the European discount variety retailing sector,” Bond said.
The group trading stores were 2 844 at the end of March, an increase of 15 percent after opening 371 new stores in the last 12 months.
The group said its financial position remains strong with positive cash resources in excess of €400m in mid-June.
Looking ahead, Bond said the consumer outlook remains uncertain and their plans reflect their expectation of a ‘new normal’ trading environment once the world emerges from the Covid-19 virus.
“However, it is likely that consumer demand for discount retailing will increase in a period of prolonged economic uncertainty and we are extremely well placed to take advantage of this trend. We remain confident that we have the vision, the strategy and the business model to continue to deliver attractive long-term sales and profit growth,” he said.