Poundland Plunges as Sales Turn Volatile Ahead of Christmasby and
Discounter's shares fall to lowest since last year's IPO
Concern grows over sales during crucial Christmas period
Poundland Group Plc fell the most ever in London trading after the U.K. discount retailer said business conditions are “highly volatile” as it approaches the peak holiday season.
The stock slumped as much as 22 percent to 216 pence amid concern that a drop in first-half sales will extend into the most important period of the year. The price was the lowest since the company sold shares at 300 pence in a March 2014 initial public offering.
“The volatile current trading introduces uncertainty over their second-half profits,” Fraser Ramzan, an analyst at Nomura, said by phone.
Results for the year depend more than ever on the six weeks leading up to Christmas, Chief Executive Officer Jim McCarthy said in a Bloomberg Television interview. Shoppers have been holding back on spending to save for Black Friday bargains, the CEO said. Poundland will participate in Black Friday for the first time this year “in a small way,” he said.
The retailer also said the recently-acquired 99p Stores chain will lose money in the second half of the financial year. The loss before interest, taxes, depreciation and amortization will be in the range of 6 million pounds ($9.2 million) to 8 million pounds, it said of the business that it bought in September after a review by the U.K. Competition and Markets Authority.
During the five-month review by the antitrust regulator, 99p Stores suffered a further drop in sales due to reduced availability of products.