Poundland to list on London Stock Exchange

British discount retailer Poundland plans to list its shares on the London Stock Exchange in March, joining a surge of store groups seeking flotations as the outlook for consumer spending improves.

The company, which operates the Dealz chain in Ireland, said the offer will comprise a partial sale to institutional investors of the holdings of majority owner Warburg Pincus and senior management.

Warburg Pincus owns 76 per cent of Poundland, with the balance owned by the retailer’s management, led by chief executive Jim McCarthy.

Poundland, which has more than 500 stores, said it will not be issuing any new shares to investors in the offer.

The listing of Poundland is one of many expected in Britain’s retail sector in 2014. Russian hypermarket chain Lenta, newsagent and convenience store McColl’s and online domestic appliances retailer AO, have all announced intentions to float in recent weeks.

Pets at Home, Fat Face, House of Fraser and Boohoo.com are also expected to come to market later this year, seeking to capitalise from the UK’s gradually improving economy.

Discount retailers outperformed the market in the economic downturn as consumers, battling inflation rising faster than wages, sought to make savings.

Poundland made underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of £45.4 million (€55 million) in the year to March 31 2013, up from £39.3 million in the previous year. Revenue rose 15 per cent to £880 million.

Poundland is targeting a doubling of its British stores to more than 1,000 as well as further international expansion after a profitable first full year of trading at the firm’s multi-price format Dealz business in Ireland, with Spain next on the list.

The firm, which is chaired by former Tesco finance director Andrew Higginson, also said it had strengthened its board, with trading director Richard Lancaster named as an executive director and four independent non-executive directors appointed, including former Carpetright CEO Darren Shapland.

Reuters