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Poundland bolsters case for £800m float with record Christmas sales Poundland bolsters case for £800m float with record Christmas sales
(about 4 hours later)
Poundland has trumpeted record Christmas sales as it bolsters the case for a potential £800m float on the London Stock Exchange. Poundland has unveiled record Christmas sales to whet investors appetites ahead of a potential £800m float on the London Stock Exchange.
The discount retailer, which sells a cornucopia of products ranging from biscuits to dog food and washing-up liquid, said total sales increased 12.4% to £348.8m in the three months to 31 December. The discount retailer, which sells products ranging from biscuits to dog food and washing-up liquid, said total sales increased more than 12% to nearly £350m in the three months to the end of December.
Its chief executive, Jim McCarthy, said the retailer won new trade over the Christmas period as even well-heeled shoppers turned to its stores for low-cost decorations, Advent calenders and stocking fillers. "Poundland's single price point and our amazing value clearly resonated with shoppers everywhere," he said. Its chief executive, Jim McCarthy, declined to comment on speculation about the business's future which some predict could make its stock market debut as soon as March. But he said trading over the important Christmas period was strong, with record sales in the five weeks to 5 January. He did not give an underlying sales figure – a key measure that strips out new store openings – but said the discount chain saw "good, positive like-for-like sales" growth.
Poundland, which is controlled by private equity group Warburg Pincus, is understood to be seeking a stock market valuation of £700m-£800m with some analysts predicting it will debut as soon as March with investment banks and advisers already in situ to oversee the process. Poundland, which is controlled by American private equity group Warburg Pincus, is understood to be seeking a stock market valuation of £700m-£800m. The retailer has already lined up investment banks and advisers to oversee the process.
Poundland did not give a like-for-like sales figure – a key measure that strips out new store openings – but said the important Christmas period was strong, with record sales achieved in the five weeks to 5 January. Its bestselling lines included 1.2m advent calenders and 750,000 Christmas gifts for pets. McCarthy said the retailer won new trade over the Christmas period as even well-heeled shoppers turned to its stores for low-cost decorations, advent calenders and stocking fillers. "Poundland's single price point and our amazing value clearly resonated with shoppers everywhere," he said. Its bestselling lines included 1.2m advent calenders and 750,000 Christmas gifts for pets.
The discount chain has filled the gap left by the demise of Woolworths and sees scope to double in size to 1,000 stores. In the Republic of Ireland it trades as Dealz. The discount chain, which is chaired by former Tesco finance director Andy Higginson, has filled the gap left by the demise of Woolworths and sees scope to double in size to 1,000 stores. In the Republic of Ireland it trades as Dealz.
Poundland's success has been underpinned by the middle classes, who turned to discounters, including Aldi and Lidl, to save money during the recession and have not looked back. In the year to 31 March 2013 Poundland made pre-tax profits of £23.1m on sales of £880m. Poundland's success has been underpinned by the middle classes, who turned to discounters, including Aldi and Lidl, to save money during the recession and have not looked back. In the year to 31 March 2013 Poundland made pre-tax profits of £23m on sales of £880m.
McCarthy said one in five of its shoppers are now drawn from the AB demographic. "There are structural changes under way in consumer shopping behaviour and I'm very pleased that Poundland continues to play a leading role in the growth of the discount sector." McCarthy said one-in-five of its shoppers are now drawn from the AB demographic. "There are structural changes under way in consumer shopping behaviour and I'm very pleased that Poundland continues to play a leading role in the growth of the discount sector." He batted away the suggestion that Poundland would slip out of fashion once Britain had fully recovered from recession. "There has been a change in shopping behaviour, customers recognise the importance of shopping for value," he said. "ABs are shopping with us in greater numbers and that is growing the market. The behaviour is sticky and our research suggests that is the case."
The chain is one of a growing band of privately held retailers looking to cash in on the recovery in the IPO market this year, with fashion chain Fat Face and Pets at Home among the other hopefuls. The chain is one of a growing band of privately held retailers looking to cash in on buoyant equity markets with Appliances Online, Phones4U, Card Factory and Pets at Home among the other hopefuls. In the event of a successful listing McCarthy, who has been running Poundland since 2006 and has a stake in the business, is expected to stay at the helm. The former Sainsbury's executive ran listed convenience group T&S Stores prior to its sale to Tesco in 2002.