Sunday, November 24

Poundland Stock Market Flotation

Poundland to Float on the Stock Market

Stop Press! For the latest news on Poundland and whether it's a good time to buy shares in it see - Poundland takeover of 99p land ! - click here
Poundland is said to have set in motion the process needed to float on the stock market in early 2014 and is valued at up to £800m. There's no news yet of whether Joe Public will be able to grab any, or whether the shares will be £1 too.

They are expected to send out letters of engagement to the float advisers this week - JP Morgan, Credit Suisse, Rothschild, and Shore Capital.

Warburg Pincus is said to be aiming at raising between £200m and £300m from the float. This would value Poundland at between £700m and £800m, which would be used to fund expansion in the number of stores. Poundland sales have surged in recent years as discount retailers have become more popular, even with the middle classes, and as shoppers have suffered the effects of declining real incomes.

Shares in many retail companies, however, have risen sharply in 2013 as investors bet on consumers starting to spend again.

Poundland intends to double in size in the UK to have 1,000 stores, and also open sites elsewhere in Europe.

Poundland sales rose 15% in the year to 31 March, to £880m, and pre-tax profits rose by 29% to £23.1m.

According to the company they have 4.5m customers every week, 200,000 of which are in the Republic of Ireland where it operates its Dealz brand. The best-sellers include CDs, confectionery, baby food and health and beauty products.

Poundland has bought 85 former Woolworths stores.

In the words of CEO Jim McCarthy, Poundland has “professionalised the single price-point market”. He has said discount retailers are now a “mainstream feature” of UK retail (along with charity shops and boarded up stores - ed.). Since launching in in the UK in 1990 Poundland has opened 500 stores and has expanded to affluent towns such as Stratford-upon-Avon, home of Shakespeareland.

Discount retailers have expanded sharply since 2008 and attract up to 20% of the key AB demographic.