THE owner of Poundland has reported higher half-year sales helped by store openings, but warned that tougher recent trading has continued as consumer spending comes under pressure.
Pepco Group, which also owns the Pepco and Dealz brands, reported a 23 per cent jump in revenues at constant currency to €2.8 billion (£2.4 billion) in the six months to March 31, with turnover in the UK up 3 per cent at €896.3 million (£771.5 million).
Like-for-like sales lifted 11.1 per cent across the group, up 15.8 per cent at Pepco and 4.9 per cent higher for Poundland, which has almost 30 stores in Northern Ireland.
But it said that an "uncertain trading backdrop" had continued into April and May with "signs of lower consumer confidence" and a clampdown on discretionary spending due to sky-high inflation, particularly in Central Europe.
"Evidence of this is being seen through lower frequency of visits and customers making different purchasing decisions," Pepco said.
Despite this, the group said it was keeping its full-year outlook unchanged as it is looking to speed up shop openings and given expectations for cost pressures to begin abating in the second half.
Results for the first half showed pre-tax profits down 9 per cent on a constant currency basis to €111 million (£95.5 million), weighed down by higher costs and investment in its store expansion programme after it opened 166 new stores.
The group added that it had not passed on all of the higher inflation it has been facing to customers.
But it said it is expecting commodity and shipping costs to ease back as the year goes on, which is set to boost its profitability.
Trevor Masters, chief executive of Pepco Group, said: "As we highlighted previously, inflation remains at elevated levels in Central Europe, against which trading in Pepco stores has remained challenging during the third quarter to date.
"Despite this, we have continued to do the right thing for customers on a budget by maintaining our price leadership and growing our market share, while focusing on the cost of doing business in these inflationary times.
"We remain well positioned and in the second half will see gross margins trending upwards, as we benefit from the tailwinds on certain input costs, including commodity and freight."
The firm said it is on track to open or relocate 47 stores in the UK over 2022-23, across high streets, shopping centres and retail parks.
Overall, it is aiming to open at least 550 new stores on a net basis across the group in the current financial year.
