Steinhoff subsidiary Pepco loses shine but still in black for first six months
Pepco said profit before tax tumbled 16 percent to 89 million (R1.73 billion) from 116m in the first five months of the reporting period.
The group said the pandemic hit its stores heavily during the period.
It said its operations were most affected in the first quarter, as it did not qualify as a retailer of essential products.
The group owns the Pepco, Dealz brands in Europe and Poundland in the UK.
It said Pepco traded from 856 stores during the closing week of the quarter, with nearly 44 percent of its 1 930 stores closed in seven countries, as the Pepco stores did not qualify as an essential services retailer.
However, the group said Poundland was able to trade.
It said the Covid-19 lockdown led to the temporary closure of 130 stores, and the remaining 700 stores traded through significantly reduced visitor numbers, with 60 percent of expected sales levels for four weeks.
Chief executive Andy Bond said when the pandemic hit its operations, the group reacted quickly and ensured it had sufficient liquidity to operate, but also maintained its store expansion programme.
“All of this was delivered while maintaining high levels of morale among colleagues, and ensuring other stakeholders, such as our suppliers, were treated with respect and fairness when negotiating new arrangements,” Bond said. The group had cash resources in excess of 400m in mid-June.
Group revenue increased 9.7 percent to 1.91bn, driven by the expansion of the Pepco and Dealz formats and by continued like-for-like growth of 0.7 percent.
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’s trading stores numbered 2 844 at the end of March, an increase of 15 percent after opening 371 new stores in the past 12 months.
Bond said the consumer outlook remained uncertain, and their plans reflect their expectation of a “new normal” trading environment once the world emerges from Covid-19.