Poundland owner rebrands as it leaves door open for float or sale

THE owner of Poundland has kept open the possibility of a flotation or sale as it moves to become entirely independent from crisis-stricken parent company Steinhoff.

Pepco, which announced its rebrand from Pepkor Europe yesterday morning, said the new title was “nothing to do” with immediate float plans, but admitted its future was in the hands of the South African firm.

Andy Bond, chief executive of Pepco, said “who knows what will happen” regarding a future sale or initial public offering (IPO), but said the firm had completed paying off debts to Steinhoff to become financially independent from the retail giant.

Mr Bond added that Poundland has faced difficulties with some UK suppliers over securing credit insurance due to its relationship with Steinhoff.

Steinhoff, Pepco’s majority shareholder, has said it needs to offload “some of its assets” as part of its recovery from a 6.3 billion euro accounting scandal which rocked the company in 2017.

Steinhoff, which also owns UK furniture retailer Bensons for Beds, bought Poundland for £610 million in 2016 and combined the retailer with its European discount business Pepkor Europe.

The group has now rebranded to Pepco, the name of one of its European retailers, as it seeks to become Europe’s largest cross-category discounter.

Pepco said it expects group earnings before tax and income to have jumped 18 per cent in the year to September 30. It added that Poundland was profitable during the year but would seek to reduce costs through rent negotiations.

Nick Wharton, the chief financial officer of Pepco, said the company was looking to reduce rents by around 25 per cent when leases come up for renewal or end leases in order to move to larger retail premises.

Mr Wharton said the company could save up to 20 million euros (£17.8 million) through improvements on rent over the next five years.