Poundland takes £639million hit to value as profits crash and costs soar
POUNDLAND is facing an uncertain future as tumbling profits have prompted its owner to admit it was considering what to do with it.
Polish owner Pepco has taken a £639million writedown on the value of the discount retailer, which has 836 shops in the UK.
It comes amid weak profits and rising costs.
Stephan Borchert, chief executive, yesterday said: “It is important to look at every option to bring it back on track.”
His comments have raised speculation that Poundland could be ditched by its Eastern European-focused parent and put up for sale.
When asked if Poundland would continue to be part of Pepco, Mr Borchert said he would reveal more on the group’s strategy in March.
Poundland is grappling with falling sales and a multi-million-pound whack from the Budget, with changes to employers’ NI contributions likely to send costs soaring.
Bosses yesterday admitted that its strategy to push clothing into its stores had backfired and it needed to focus on the basics of selling items for £1 again.
The chain had raised most of its prices above £1 as inflation piled pressure on the business.
Poundland’s underlying earnings have slumped by two-thirds in the past year from £61million to £23million.
Meanwhile parent Pepco, which has 3,781 stores in Europe, is faring significantly better and, on the back of record sales of £5.1billion, announced its first dividend since listing three years ago.
WARHAMMER’S ON PRIME TV
GAMES WORKSHOP, the fantasy miniature model-maker which leapt into the FTSE 100 last week, has reached a final agreement with tech titan Amazon for a film and TV series of its Warhammer 40,000 franchise.
The Nottingham-based business, valued at £4.56billion, is working with former Superman actor Henry Cavill, who is a big Warhammer enthusiast.
The Hollywood star, 41, posted a picture on Instagram yesterday of himself outside the shop on his home island of Jersey where he first bought Warhammer figures as a boy.
He said of the Amazon deal: “Our combined efforts have led us to a fantastic place to start our Universe.”
RETURN TO OFFICE IS ON RISE
MORE than half of workers are heading back to the office five days a week as more bosses ask them to return, mobile data from O2 suggests.
The most popular day of the week to commute is now Wednesday, with 74 per cent making the journey to work.
Over the summer the biggest increase in trips to the office was among Gen Z staff, perhaps suggesting they were keen to socialise after work.
A growing number of employers are calling on staff to attend at least three days a week.
Boots ordered all its staff back to headquarters five days a week in September while Amazon has told staff that it expects them to return full-time from the new year.
Bosses have said it is harder to make fast decisions while juggling a mix of WFH and people in the office.
Meanwhile, half a million civil servants work just over two days at their workplaces.
ENERGY BILL FEAR
ENERGY bills are expected to rise again in the new year by £24, say respected analysts Cornwall Insight.
The price cap for average use is predicted to go up by 1 per cent from £1,738 last month to £1,762 in January owing to higher wholesale electricity and gas prices.
And analysts warn the prospect of further reforms by regulator Ofgem, including covering suppliers’ bad debts, could add another £20 to bills.
CITY’S HEAVY HIT
HEAVY equipment rental company Ashtead has dealt a £27billion blow to the City by saying it will shift its listing to New York.
Ashtead yesterday said it belonged in the US as almost all its profits were made there.
However, its decision to follow the likes of Paddy Power owner Flutter and plumbing group CRH is a setback for the London Stock Exchange.
French media group Canal+, behind the latest Paddington film, this week confirmed a spin-off into a London listing but it will not be eligible for the FTSE 100.
MOONPIG has swung to a loss of £33million after it wrote down the value of its “experiences” arm, as consumers plumped for cheaper gifts.
The greetings cards firm’s total sales rose to £158million but shares slumped by 15 per cent yesterday.
CAR CLAIM RISK
MILLIONS more drivers are in line for compensation over a motor finance scandal, the City regulator told MPs yesterday.
They could benefit from a court ruling in October which found they should be told beforehand about lenders giving commissions to car dealers for brokering contracts.
It was highlighted by FCA general counsel Stephen Braviner Roman, who told MPs: “I think it would be premature to say it’s not on the scale of PPI now.”
The new scandal could top estimates of £30billion.
Banks such as Lloyds and Santander are the most exposed.
BONUSES ON TAP AT THAMES
THE boss of troubled Thames Water has tried to defend a huge performance bonus — despite it running out of cash and sewage spills soaring by 40 per cent.
Chris Weston, who started as chief executive in January, bagged £195,000 in March on top of his £850,000 salary.
He said yesterday the award was performance-related and said if competitive packages were not offered no one would come to work for Thames.
The under-fire chief accepted performance had lagged after 259 pollution incidents but blamed a wet spring and summer.
And he said eliminating all pollution was “almost an impossible task and would take a huge amount of money”.
Thames Water is swimming in £16billion of debt.
It is relying on a £3billion lifeline from its creditors and fresh fundraising after warning it could run out of cash in March.