Ahead of the publication of full-year results from single price retailer Poundland, operator of the Dealz banner, next week, Shore Capital's Clive Black has said that he anticipates the group's Irish business to be a positive in an otherwise 'challenging' set of results.
"We expect the narrative from Poundland to be positive with respect to its Dealz business in Ireland," Black said in a trading statement preview.
"A good store opening programme is in place, that now embodies the exploration of tighter hinterlands with correspondingly smaller outlets. We sense that Dealz Ireland will also be benefiting from what is a very strong rebound in the Irish economy, reflected in the latest GDP figures that recorded year-on-year growth of 9.2%."
In the UK, Shore Capital is anticipating 'year-on-year group headline sales growths, which includes the contribution from both converted and unconverted 99p Stores, but further negative like-for-like (LFL) sales in the core chain'. This could be by as much as 4% to 5% lower than last year, it estimated.
Shore Capital believes that the Poundland's UK performance has been impacted by the takeover and integration of the 99p Stores business, which has meant management has had 'all hands to the pumps' in terms of the conversion process of said stores.
"With Poundland UK likely not to be firing on all cylinders at the moment, we sense that everyone involved within the business will be looking forward to the company working off a standard fascia and procurement file as soon as possible," said Black, "so permitting a necessary return to the day job, harvesting the benefits of what we assert remains a good asset deal. whilst seeking to return the underlying business to necessary underlying stability and growth."
Poundland publishes its full year and Q4 results on 14 April.
© 2016 - Checkout Magazine by Stephen Wynne-Jones
