Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

'How much is this?' - Poundland reveals March IPO plans

Only institutional investors will be able to buy the shares via the IPO, so retail investors will have to wait until the debut which is scheduled next month.
'How much is this?' - Poundland reveals March IPO plans

“How much is this?” Apparently it is the most asked - and least original - question posed by customers in ‘pound’ shops.

And it is likely one of the questions investors are asking themselves as they read confirmation that the ‘single price’ retailer Poundland will float on the London Stock Exchange

The regulatory announcement stopped short of revealing how much each share would be sold for however, given the sale will be of existing shares only, those marketing the IPO won’t necessarily have the flexibility to give it a gimmicky 100p price tag.

It is expected that at least 25% of the group’s shares will be in the free float following the IPO, which will see private equity investor Warburg Pincus sell a portion of its stake along with some directors and other individual investors.

Only institutional investors will be able to buy the shares via the IPO, so retail investors will have to wait until the debut which is scheduled for next month.

Poundland is the biggest of the UK’s ‘pound shop’ chains, according to the announcement, with twice as many stores as its nearest ‘single price’ competitor.

Against a backdrop of the global recession Poundland has rather unsurprisingly shown good growth, with revenues growing to £880.5mln at the end of the last financial year, from £641.5mln two years earlier. In the time frame earnings (underlying EBITDA) increased to £45.5mln from £31.1mln.

"The value retail sector has been through a period of profound change in scale, customer perception and financial performance,” Poundland chief executive Jim McCarthy said in a note.

“The sector is now a mainstream feature of the UK retail market and Poundland has been a central architect of that change.”

Stockbroking firm Hargreaves Lansdown says this is the latest in a long list of anticipated IPOs that reflect a “growing confidence”.

“During a time when the High Street is under threat, Poundland is aiming to increase its retail presence,” said Richard Hunter, head of equities at Hargreaves Lansdown.

“To date, the company has certainly captured the imagination of a cash conscious consumer who, although excluded from the float, has been responsible for a strong growth in revenues and profits.”

Jamie Ashcroft
February 18 2014 Jamie Ashcroft


Register here to be notified of future PLND Company articles

Timeline

Article
March 12 2014

Related Articles

October 02 2014

The addition of a new hotel to the development pipeline is an example of the flexibility of Action Hotels’ model.

© Proactive Investors 2015