Pepco Group annual profit jumps 14.3% on store expansion

LONDON, Dec 13 (Reuters) - Pepco Group (PCOP.WA), owner of European discount retailer brands PEPCO, Poundland and Dealz, reported a 14.3% rise in annual core earnings on Tuesday, helped by the opening of 516 new stores, and forecast more growth in its new financial year.

The group, which listed on the Warsaw stock market last year, said it made underlying earnings before interest, tax, depreciation and ammortisation (EBITDA) of 731 million euros ($771 million) in the year to Sept. 30, up from 647 million euros in 2020-21.

Revenue rose 17.4% to 4.82 billion euros, with like-for-like sales up 5.2%.

"Macro-economic conditions continue to be challenging, driven by inflationary pressures, but the group continues to outperform the wider market," Pepco said, noting it was benefiting from economies of scale with suppliers due to its size.

"We are driven by maintaining and improving our price leadership position through which we can grow our market share," it said.

Pepco in October outlined plans to accelerate its expansion in 2022-23, opening at least a net 550 stores, including taking the PEPCO brand into Greece and Portugal. It ended the 2021-22 year with 3,961 stores.

The group said it had seen a strong start to its new financial year and was on track to meet guidance for 2022-23 of EBITDA growth in the mid-teens, assuming constant foreign exchange rates and absence of any further significant deterioration in the macro environment.

It forecast revenue growth in the mid to high teens, driven by the new store openings, store refurbishments and like-for-like sales growth from the existing store estate.

Pepco also forecast it would deliver EBITDA of 1 billion euros in under five years' time, ahead of its target outlined at the time of its IPO.

($1 = 0.9480 euros)

Reporting by James Davey; Editing by Rashmi Aich, Kirsten Donovan

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