Poundland to cash in with IPO

IPO WATCH: The discount retailer is among the first companies to get in on this year's flotation frenzy.

by Rachel Savage
Last Updated: 14 Apr 2015

Poundland has finally announced plans to float on the London Stock Exchange in March, months after rumours first started flying. It’s the first big retailer to announce an IPO, as investors queue to snap up consumer stocks.

The £1 store (everything’s a pound, obvs) has 530 outlets in the UK and Ireland and is expected to be valued at around £700m. That’s a pretty sweet deal for private equity group Warburg Pincus, which bought 76% of the company in a deal that valued it at £200m in 2010 when it had just 250 stores.

Poundland has been cashing in on consumers scouring the high street for bargains in the economic downturn, with sales up almost 13% annually to £758m in the 39 weeks to December 29.

Both Warburg Pincus and Poundland’s senior management, who own the rest of the company, will be able to sell shares. Poundland expects at least 25% of shares to be sold, it said in a statement.

The flotation will help to fund the discount chain’s ambitious expansion plans. Chief exec Jim McCarthy has said he wants to have 1,000 stores in the UK ‘in time’ and the company is trialing its Irish Dealz chain in recession-hit Spain, with 10 outlets being opened there over the next couple of years.

‘The value retail sector has been through a period of profound change in scale, customer perception and financial performance,’ McCarthy said in a statement. ‘The sector is now a mainstream feature of the UK retail market and Poundland has been a central architect of that change.’ Basically, it’s not that embarrassing for people to spend their one quids in pound stores anymore.

Poundland also announced that it has beefed up its board with some City-pleasing non executive directors: former Sainsburys CFO and Carpetright chief exec Darren Shapland, Mondolez International (formerly Kraft Foods) president Trevor Bond, former Travelodge chief exec Grant Hearn and Tea Colianni, HR director of Merlin Entertainments, which floated in November.

The discount retailer’s flotation follows Lloyds schmoozing potential TSB investors ahead of an IPO in a few months time. Other privately-owned retailers eyeing up the stock market include Pets at Home, Game Group and Fat Face.


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