Poundland announces disappointing profits after surprise takeover offer from Steinhoff
Bargain basement retailer Poundland today announced a fall in sales, a day after South African giant Steinhoff said it was eyeing up the company.
Read more: Poundland shares have jumped after a surprise takeover offer
The figures
Like-for-like sales at the discounter were down 3.9 per cent, compared to a rise of 2.4 per cent in 2015.
Pre-tax profits in the year to 27 March also fell, down to £5.9m from £36.2m last year – a drop of 83.7 per cent.
The company has proposed a final dividend of 2p per share – down from 3p in 2015 – bringing the total dividend payment for the year to 3.65p per share.
Poundland opened 60 new stores this year and converted 190 99p Stores into Poundland shops, after the acquisition of 99p Stores for £55m last year.
Shares in the retailer rose 3.1 per cent to 206.2p in late morning trading – suggesting investors are pretty enthusiastic about that takeover offer.
What it's interesting
Poundland yesterday advised investors to take no action on the news South African conglomerate Steinhoff, which owns such illustrious brands as Harveys and Bensons for Beds, is considering taking over the UK retailer.
The discount retailer said there is no certainty a firm offer will be made by Steinhoff.
Last year, Poundland took over its rival 99p Stores in a deal that triggered a competition probe. Today, chief executive Jim McCarthy – who hands over to Kevin O'Byrne in two weeks – described the process as "an unprecedented integration programme at pace".
What Poundland said
Darren Shapland, chairman of Poundland, said:
This has been a challenging but transformative year for Poundland and the acquisition of 99p Stores has further strengthened our position as Europe's biggest single-price discounter.
With all of the 99p Stores now converted to the Poundland fascia, we are strategically well-placed for progress.
In short
Another transformative year could be on the cards for Poundland – watch this space.