With Christmas fast approaching retailers are gearing up for their busiest time of the year, with many hoping that the festive season will allow them to put behind the woes of a particularly poor first half. However, at discount chain Poundland it is truly the season to be jolly, as its latest trading report has shown a huge growth in both sales and profit during the first six months of its financial year.
In the six months to the 28th of September, pre-tax profit climbed by 11.7 per cent to reach £9.3 million while like for like sales, excluding new openings, rose by 4.7 per cent.
In addition, profits excluding unique items rocketed up by 34 per cent to £12.6 million, contributing strongly to a total sales figure of £528 million – a growth of 15 per cent when compared to the same period last year.
As a result, Poundland’s share price has enjoyed a 3 per cent increase, reaching 319 pence per share. This will be the first Christmas Poundland will spend as a public company after joining the stock market early this year, meaning the pressure is on to deliver strong returns to shareholders.
Poundland chief executive Jim McCarthy believes that consumers are continuing to place a huge emphasis on value for money, which is causing footfall levels at the chain’s nationwide stores to soar.
He says; “The [discount] sector is performing strongly and other parts of the retail sector less so.That is about consumer behaviour.
“Increasingly, consumers have been pleased to buy products that previously they were paying more for at other retailers and we think Poundland is positioned to take advantage of those changes in consumer shopping behaviour.”
Poundland is not taking anything for granted, and has recently made the decision to expand its Dealz division in Spain as the high unemployment figures and unstable economic conditions have created the ideal environment in which to thrive. However, the chain has also confirmed that it will open a further 60 stores in its main market, the UK and Ireland, in the coming year.
In terms of full year results, the retailer is fairly confident that it will easily meet targets, as the second half has already begun to yield significant rewards. According to Mr McCarthy, sales of Christmas cards and wrapping, along with batteries and confectionary, have boomed in the run up to the festive season – a very positive indicator given that the retailer makes around half of its annual profit between the first of October and the 31st of December each year.
In conclusion, then, it seems that Poundland’s star is continuing to rise, with the changing dynamics on the high street continuing to benefit discounters in the run up to Christmas.
Mr McCarthy concludes; “We had a good Christmas last year and we plan for a good Christmas this year.
“Take up from customers has been good so we are pretty confident about it.”
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