By James Davey
LONDON (Reuters) -European discount retailer Pepco Group reported an annual net loss of 662 million euros ($699 million) citing a non-cash impairment charge of 775 million euros for its Poundland business in the UK on a weak performance and outlook.
The Warsaw-listed group, whose shares have fallen 39% this year, said on Tuesday the Poundland impairment charge was primarily goodwill. It followed a slump in its performance in the 2023/24 year and a weaker profit outlook for the British variety store chain amid “increasing competitive and cost challenges.”
Poundland saw its like-for-like sales fall 3.6% in the year to Sept. 30, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 21.5% to 153 million euros.
It ended the period with 836 stores.
Poundland was “impacted by declines in clothing and general merchandise following the transition to Pepco-sourced product ranges at the start of the year,” new Pepco Group CEO Stephan Borchert said.
“We are taking swift action to get Poundland performance back on track,” he said.
The group as a whole reported underlying EBITDA, its preferred profit measure, of 944 million euros in 2023/24, in line with guidance of at least 900 million euros and up from 754 million in 2022/23.
Revenue was a record 6.2 billion euros, up 10.2%, driven by 392 net new stores.
It announced an inaugural full-year dividend of 6.2 euro cents per share.
($1 = 0.9469 euros)
(Reporting by James Davey; editing by Varun H K, Jason Neely and Bernadette Baum)
