Poundland’s profit was slashed by almost £33m during its latest financial year despite its sales rising by nearly £200m, it has been revealed.
The Walsall-headquartered discount brand, which is owned by Pepco, made a pre-tax profit of £680,000 for the year to October 1, 2023, according to newly-filed accounts with Companies House.
The total comes after Poundland made a pre-tax profit of £33.9m in its prior 12 months.
The new results also show that its sales increased from £1.586bn to £1.771bn over the same period.
Poundland’s UK revenue rose from £1.402bn to £1.569bn and from £179.2m to £198.1m in the Republic of Ireland. Its sales remained at £4.3m in the Isle of Man.
The accounts filed with Companies House also show that the average number of people employed by Poundland in the year fell from 15,820 to 15,517.
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Poundland’s “defiance” to economic challenges
In a statement signed off by the board, Poundland said: “The macro-economic environment in which the company operates continued to offer up challenges during the period.
“The long-term impact of Covid-19 and the Russian invasion of Ukraine on the cost of living crisis and the subsequent unprecedented inflationary increases to input costs posed significant challenges for the business.
“In defiance of these obstacles and challenges the company continued to make strong progress, delivering a 12 per cent increase in revenue year on year.
“In the main, this was due to our like-for-like revenue growth of 5.5 per cent reflecting an enhanced value proposition and customer perception.
“We also continued to improve our market footprint throughs sourcing better store locations, opening 53 and closing 51 stores during the year.
“Key to this sustained growth has been a focus on increasing the volume of our new stores, an increase in our multi price offerings, our continued devotion to offering a wide produce range and a sustained commitment to providing families on a budget with value led offerings amidst the heights of cost of living pressures.
Poundland owner “cautiously optimistic”
The figures come after Poundland’s owner Pepco said it was cautiously optimistic for the year ahead, as it recorded a 17.1 per cent surge in revenues for the full year to €5.6bn – despite profit problems mounting.
Demand for budget goods has surged amid the cost of living crisis as shoppers seek out cheaper alternatives, according to its preliminary results, which were release in December 2023.
For the full year to September 30, 2023, the firm said its underlying EBITDA was largely flat growing just 3.1 per cent to €753m (£645m).
It also said there had been a 33.7 per cent drop in underlying profit before tax, with its executive chair Andy Bond, “our overall performance was mixed with a disappointing profit outturn.