Discount retailer Poundland has announced plans for a stock market flotation next month which is expected to value the company at up to £750 million.
The chain has seen sales rise as squeezed consumers hunt for a bargain, including well-heeled shoppers increasingly on the look-out for savings.
Since opening its first store in Burton-on-Trent in 1990, Poundland has grown to nearly 500 outlets in the UK and plans to double that number. It also operates more than 30 stores under the Dealz brand in Ireland.
Founder Steve Smith netted £50 million from selling his stake in the business more than a decade ago. US private equity firm Warburg Pincus bought the group for £200 million and now looks set to net a windfall as it floats for nearly four times that value.
The retailer, which sells goods such as Cadbury's chocolate and Fairy washing-up liquid for £1, will now rub shoulders with some of the City's most well-established names as it lists on the London Stock Exchange.
Poundland describes itself as the largest single-price value general merchandise retailer in Europe, with revenues of £880.5 million in the last financial year to the end of March, and underlying earnings of £45.5 million.
Revenues for the nine months to the end of December were £758.3 million, and underlying earnings £45.2 million.
The retailer says the value general merchandise market in which it operates is one of the fastest growing segments in UK retail, benefiting from a "structural shift in consumer behaviour towards value".
It says around 22% of shoppers now come from the wealthiest section of the population.
Poundland plans to open a new 350,000 sq ft distribution centre in Harlow, Essex, later this year as it continues its growth.
There are plans to expand into Europe, with a trial of up to 10 Dealz stores - which sells most products for 1.49 euros (£1.22) - targeted to open in Spain over a two-year period, while the group said there was also potential for online sales.
Chaired by former Tesco executive Andrew Higginson, the group has appointed a raft of new directors as it prepares for the float, including former Carpetright chief executive Darren Shapland.
Chief executive Jim McCarthy said: "The value retail sector has been through a period of profound change in scale, customer perception and financial performance.
"The sector is now a mainstream feature of the UK retail market and Poundland has been a central architect of that change. Our single price point and our amazing value are appealing to an increasingly broad section of shoppers."
Directors of the company will be able to cash in part of their stock as part of the flotation.
Last month, Poundland revealed that it served more than seven million shoppers in the peak Christmas trading week and said it saw a record performance in the five weeks to January 5.
Its widely-expected flotation plans follow a similar announcement by online appliance retailer AO and also come in the wake of share offers by Madame Tussauds operator Merlin and estate agents Foxtons last year.
There has also been strong speculation about plans by over-50s specialist Saga and online property site Zoopla.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article