Dealz ramps up Irish expansion with 20 new stores on the way

Dealz owner Poundland is set to open up to 20 new stores in Ireland over the coming year as it says that some 300,000 Irish customers now visit its stores every week.

In its annual results published on Thursday, the British discount retailer said it would open 20 to 30 net new stores, “primarily in the Republic of Ireland and in retail parks”. Dealz operated some 53 stores - eight of which are in retail parks - in Ireland as of March 2016, up from 41 in the prior year. The chain has some 300,000 weekly customers in Ireland it said.

Underlying sales across the UK and Ireland increased 9.3 per cent to £1.21 billion, while, sales at stores open over a year fell 3.9 per cent. The retailer, which in the UK sells everything for a pound or €1.49 in Ireland, made an underlying pretax profit of £37.8 million in the year to March 27. That was below analysts’ forecasts which ranged from £39.9 million to £51.8 million and was down from £43.7 million in 2014-15. Europe’s biggest single price discounter said it was hurt by subdued trading, adverse currency moves and the distraction of integrating the 99p Stores chain it bought last year.

Steinhoff has bought 23 per cent of Poundland and is considering a full cash bid. Poundland has told shareholders to take no action. Under British takeover rules, Steinhoff has until July 13th to announce a firm intention to bid for all of Poundland.

Poundland completed the £55 million purchase of the 251-outlet 99p Stores chain in September and has since converted the entire estate to the Poundland format.

Poundland said underlying sales in the 11 weeks to June 11th increased 28.6 per cent. Thursday’s results are the last to be presented by Jim McCarthy, Poundland’s chief executive for the past decade. He retires next month and will be succeeded by former Kingfisher executive Jim McCarthy.

Shares in Poundland closed Wednesday at 200 pence, valuing the business at £534 million.

(Additional reporting: Reuters)