‘New’ Pepco Group posts strong Q3 when Poundland negative impact is excluded

Pepco Group’s Q3 trading update on Thursday saw the three months to the end of June for ‘New Pepco Group’ enjoying “record” revenues of €1.1 billion and constant currency revenue growth of 7.7% versus last year.

The new group is what’s left after the firm recently sold its troubled Poundland UK and Dealz Ireland operation. What’s left is Pepco across mainland Europe and Dealz Poland.

And the negative impact of Poundland can be seen if we include its figures. On that basis total group revenue was €1.424 billion with constant currency revenue growth of only 2.7% and like-for-like (LFL) revenues up just 0.1%. That came as revenues at Poundland fell 10.3% with a 7.1% LFL drop.

So, looking at New Pepco Group, LFL revenues grew by 2.6% in the third quarter, with growth across both the Pepco and Dealz brands. The Pepco brand delivered Q3 LFL revenue up 2.4% – its third consecutive quarter of LFL growth.

Performance “was driven by continued strategic execution, with benefits from better availability, a sharper price focus on our best-selling items and improved product ranges, which helped drive volume growth in the period”. And the LFL performance excluding FMCG (which it’s exiting), grew even more strongly by 4.8%.

Dealz reported a strong quarter, with LFL sales up by 5.8%, with positive demand in food and GM.

And the newly-reshaped group’s overall gross margin improved by 180 basis points year-on-year in Q3 FY25, with continued strong progress in Pepco.

It saw net new openings of 45 Pepco and Dealz stores in Q3, largely representing Pepco openings in the CEE region. Overall, New Pepco Group operated 4,276 stores at the end of the third quarter.

And the board announced that it’s set to start a share buyback of up to €50 million.