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'How much is this?' - Poundland reveals March IPO plansFebruary 18 2014, 11:03am
“How much is this?” Apparently it is the most asked - and least original - question posed by customers in ‘pound’ shops.
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”.
“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.”