Poundland boss Jim McCarthy has brushed off the potential regulatory block on its takeover of 99p Stores, insisting the deal was not at the core of the chain’s ambitious growth plans.
The retailer was expected to issue a response to the Competition and Markets Authority’s decision to move the 99p Stores deal to a more in-depth investigation as The Grocer went to press.
Speaking after Poundland’s full-year update on Tuesday (14 April), McCarthy said: “Poundland’s growth is not dependent on acquisition of any company.”
Poundland’s rate of store openings slowed during the previous financial year, giving it 547 UK stores.
McCarthy said talk that the 99p Stores deal was needed to help Poundland hit 1,000 UK stores was off the mark. “If we do acquire 99p Stores, those 251 stores will be added to the 1,000 target so the target moves to opening 1,251 stores.”
Poundland revealed overall sales, excluding its trial in Spain, were up 11.4% to £1.11bn in the year to 28 March (up 2.4% like for like) - slightly down from the 13.3% growth achieved in 2013.
McCarthy said the chain faces tough trading conditions and headwinds from a weaker euro and strong comparables in the first half. He nevertheless expects to achieve 1%-2% like-for-like growth in the 2015 financial year, with much of that attributable to the second half of the year.
He also ruled out raising prices in Ireland and its Spanish trial, despite the weakening euro hitting reported sales in non-UK operations.
“There is likely to be more volatility with the euro, but it would be wrong to alter pricing as this can be naturally hedged by doing more of our purchasing in euros,” he said.