Pepco Group announced today that it achieved record-breaking revenue in fiscal 2023, despite facing challenges in the market. The discount retailer, which is responsible for managing Poundland in the U.K. and Dealz and Pepco in continental Europe, reported a revenue of 5.65 billion euros ($6.0 billion) for the year ended September 30. This represents an increase from EUR4.82 billion in the previous year. On a constant-currency basis, revenue rose by 18%, propelled by a remarkable growth of 25% from Pepco and 8.4% from Poundland.
In the fourth quarter, revenue experienced a 12.5% year-on-year increase on a constant-currency basis, reaching EUR1.44 billion. However, on a like-for-like basis, the growth remained flat.
Pepco Group anticipates that its full-year underlying earnings before interest, taxes, depreciation, and amortization will rise to approximately EUR750 million, compared to EUR731 million in the previous year.
The company acknowledges that the business environment has become increasingly challenging in the last quarter, particularly in Central and Eastern Europe, resulting in weaker sales, a lower gross margin than expected, and higher costs. However, Pepco Group is taking necessary steps to address these issues. It plans to refocus its efforts on customers in the core Central and Eastern Europe market and implement a targeted growth strategy in other markets where it operates.
“Despite the market challenges we have faced, our extensive range of products continues to attract customers. With our strong balance sheet and resilient operating cash flow, we believe the Pepco Group is well-positioned for future success across Europe,” said Executive Chair Andy Bond.