Poundland bags a 12% profit despite European expansion costs

Discount retailer Poundland reported a 12 per cent profit of £9.3m in its first-half report despite launching pilot stores in Spain.

The profit comes despite Poundland dishing out £1.2m for a new distribution centre in Harlow. Additionally, the firm saw a net growth of 28 stores bringing Poundland's nationwide tally to 556.

In July, the firm expanded into Europe, staring a pilot store in Spain, Torremolinos, called ‘Dealz’. By the end of 2016, the retailer aims to have ten stores operating in the country.

Jim McCarthy, chief executive of Poundland, said: “I am pleased to report further growth in both sales and profits in the first half of the year. In addition to strong trading in the UK, our international expansion plans are well underway with three multi-price Dealz stores now open and trading well in Spain.

"As the structural changes in UK retail continue to redraw the landscape, we are building our reputation for offering amazing value every day to our customers and substantially broadening our appeal.”

McCarthy concluded that the firm was dependent on delivery a good Christmas for a healthy second half.