Poundland cautions on profit as launches £50m placing

Single price retailer Poundland on Thursday launched a £50 million share placement to fund its purchase of smaller rival 99p Stores, and cautioned that first-half profit would fall short of last year's level.

The £55 million acquisition of the 251-store 99p Stores, announced in February, was cleared by Britain’s competition regulator last week. Poundland expects to complete the acquisition on September 28th.

Shares in Poundland, which listed at 300 pence in March last year, fell up to 5.9 per cent after the company also warned that "indications are that 99p Stores' financial position has weakened somewhat since our original due diligence". Poundland said this finding did not impact the strategic rationale for the deal. The company also announced four new Dealz stores in Dublin, Cork, Wicklow and Cavan. – (Reuters)