Poundland IPO: Everything you need to know about Poundland

Pepco, the owners of low-cost retail chain Poundland, are set to go public on the Warsaw Stock Exchange. Take a look at the important information ahead of the IPO as the European retailers seek a £3.9 billion valuation of their company.

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What is Poundland and where do they operate?

Poundland was established in 1990 as a type of variety store selling wide ranging fast-moving consumer goods (FMCG) in the UK for £1. Over the past thirty years, Poundland has consistently evolved its business model and range of products to gain an advantage offer competitors in the market and is now firmly established as a staple of the UK high street.

The business model has since been passported into several EU territories, predominantly Ireland, Spain and Poland under the brand names Pepco and Dealz.

What we know about the Poundland IPO

When the Poundland IPO was officially announced, many potential investors were keen to learn about the location of the floating before making any trading decisions. The assumption was that it would take place on the FTSE as the company looks to achieve its £3.9bn valuation. However, CEO Andy Bond confirmed that it would be floated on the Warsaw Stock Exchange (WIG), which operate on similar stock market hours to the FTSE.

The given reason was cited as being due to the companies intend future growth into the Eastern European market, and the success of their Pepco and Dealz chains within Poland itself. It is also possible that Brexit may have contributed to this decision as many firms are still navigating the waters with regards to European expansion.

At the time of the Poundland IPO announcement, Bond said: ‘Today’s announcement of our intention to float on the Warsaw Stock Exchange marks an important milestone for the Group.

’We are strongly positioned to deliver significant long-term growth, given our market leading customer proposition in the most attractive sector of retail, the scale of opportunity ahead of us as we expand across the entirety of Europe and the investment in strengthening the infrastructure of the business over recent years’.

What makes Poundland shares interesting?

30 years of success for Poundland and its continued growth throughout the Covid-19 pandemic may have led to the company being publicly floated, but it is the company’s intentions for the future that make it interesting for traders.

Having already established 3200 Pepco, Poundland and Dealz stores in the UK and Europe, the firm has outlined plans to open a further 8000 stores over 20 years. Whilst this may sound like an ambitious target to reach, Poundland’s track record of business has proven to be sound, as has its ability to develop its business model, product range and offering.

There are concerns over Poundland’s lack of online presence. However, given their approach to trade, this may not be the stumbling block that other retailers have suffered from.

Even though Poundland will be floating on the Warsaw Stock Exchange, companies that operate in the UK have garnered much attention from traders, including Deliveroo which floated for the first time recently.

Is Poundland currently profitable?

It depends on which brand you are referring to and in which territory. The group of companies under the Poundland umbrella, including Pepco and Dealz, saw a 3% rise in their full year revenue (year-on-year) figures to £3 billion. This was mainly due to Poundland stores being considered as an essential retailer during the global pandemic – benefiting from remaining open, but also from others being closed. However, this was not extended to the wider range of stores, as Pepco stores sold predominantly clothing and homeware so were not considered essential.

Despite this, in the five months leading up to February 2021, the firm saw a 17.8% increase in underlying EBITDA.

However, it is worth noting that these figures were released ahead of Poundland becoming a publicly traded company, and therefore may not be kept to the strict reporting standards that are required.

Who are Poundland’s competitors?

Within the UK, one of Poundland’s main competitors is B&M. Like Poundland, B&M sell a wide range of FMCG’s and are considered to be within the same discount range of stores. However, B&M does not have the same pricing structure of Poundland.

In Europe, Carrefour would be classed as a similar style of competitor, albeit, Carrefour has a wider variety of stores including hypermarkets and cash and carry formats. The majority of Carrefour’s stores are in France, a territory that Poundland/Pepco is yet to enter, but they do have stores worldwide, as far reaching as Brazil.  

Who is on the Poundland board?

The aforementioned Andy Bond has a proven track record in the FMCG sector, including adding new product ranges to existing brands. In his former role as at ASDA, Bond oversaw the launch of the George clothing brand, a new string to the ASDA bow that added an approximate £1bn in revenue to the company. Bond had risen the ranks within ASDA, starting as a marketing manager in 1994, before ultimately leaving the company as CEO in 2010.  

In addition to CEO Andy Bond, Poundland have also acquired the services of Richard Burrows as its chairman. Burrows has a strong proven track record in this role having served as the chairman of British American Tobacco (BAT), the world’s largest tobacco company, since 2009. The firm has also announced that it will appoint four non-executive directors to the board to steer them into their planned expansion.

Currently the board members are:

  • Richard Burrows – Chairman
  • Andy Bond – CEO
  • Sean Cardinaal – COO
  • Barry Williams – Managing Director
  • Tim Bettley – Trading Director
  • Dave Williams – Finance Director
  • Tim Goalen – Distribution Director

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