Shares in Dealz owner Poundland dive on update
Shares in UK discount retailer Poundland - which trades as Dealz in Ireland - plunged more than 14pc yesterday after it warned that its full-year profits to be at the lower end of market expectations.
It also said that reduced footfall highlighted in its third quarter statement had persisted over Christmas.
Headed by Jim McCarthy, Poundland opened its first store in Ireland in 2011 under the Dealz name. It now has 51 outlets here.
In a third-quarter trading update yesterday, Poundland said that total sales in the period, excluding its nascent business in Spain and the recently acquired 99p Stores chain, rose 29.4pc to £424.9m (€569.3m). Based on the same exclusion, constant currency sales were up 30.1pc.
"The trading conditions that we experienced in November continued through the third quarter, with high street customer numbers down year on year, and this has impacted sales growth," said Mr McCarthy.
"Despite these conditions," the company added, "as a result of strong cost and margin control, we expect pre-tax profit for the year to March 2016 to be towards the lower end of the range of market expectations."
The current market consensus is for Poundland to generate profits of between £39.8m and £45.8m.
But investors didn't succumb to the spin, with Poundland's shares diving over 10pc in early trading before closing down 12.5pc in London. They have halved in the past year. Analysts also moved to cut their profit forecasts yesterday.
Mr McCarthy said that the group remains on target to open a total of 70 more Poundland and Dealz stores in the UK and Ireland in the current full year.