Pepco Group suffered a more than 16 per cent slide in profit in the first half of its 2020 financial year, damaged by a lack of sales during the coronavirus pandemic.
The owner of Poundland reported an income of €89m (£80m) in the six months to March, having posted €116m in profit up until February. Profit growth swung from a rise of 21.8 per cent to a fall of 16.3 per cent, as lockdown restrictions halted shopper activity.
Meanwhile revenue rose 9.7 per cent in the six months to March, having been up 14.4 per cent in the five months to February. The group also operates the Pepco and Dealz brands in Europe.
Pepco said its revenue is now returning to pre-coronavirus levels with 99 per cent of its stores now open for trading, though its like-for-like sales remain in negative territory.
It added that its “financial position remains strong”, with positive cash resources of more than €400m as of mid-June.
“When Covid impacted, the group reacted quickly, protecting both our teams throughout the supply chain and our customers in our stores while protecting our cash position,” said chief executive Andy Bond.
“Our actions ensured we had sufficient liquidity to operate through this wave of the virus but also by, for example, maintaining our store expansion programme, leave us positioned strongly to thrive once we are through this period of reduced consumer demand.”
He added: “Looking forward, the consumer outlook remains uncertain and our plans reflect our expectation of a ‘new normal’ trading environment once we all emerge from the Covid 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.”
Pepco’s owner Steinhoff had been seeking a sale of the group earlier this year, but it was postponed due to market volatility. Bond said in February its sale was “almost inevitable”.