PLND.L Regulatory News (PLND)

7 January 2016

POUNDLAND GROUP PLC

THIRD QUARTER TRADING STATEMENT

Poundland Group plc ("Poundland" or "the Group"), Europe's leading single price retailer, today announces its third quarter trading statement for the 13 weeks ended 27 December 2015 (''Q3'').

Financial Highlights

\* The range of market expectations for pre-tax profit for the financial year ending March 2016, excluding trading losses from the combination of 99p Stores and converted stores, and before any non-underlying costs relating to Spain and the acquisition and integration of 99p Stores, is £39.8 million to £45.8 million. Consensus is for pre-tax profits of £42.6 million

Strategy Highlights

Sales Performance

Total revenue, excluding Spain, in Q3 increased by 30.1% on a constant currency basis. Within this, Poundland's sales grew by 9.0 percentage points, including 3.0 percentage points from converted 99p Stores, whilst the acquired 99p Stores' trading throughout the period under their own fascia contributed 21.1 percentage points.

On an actual currency basis, total revenue, excluding Spain, was £424.9 million (2014: £328.4 million), which represented total growth of 29.4%.

Total revenue in Spain was £4.5 million during the period (2014: £2.3 million), with constant currency growth of 121.9% and actual currency growth of 102.1%.

As previously reported, Q3 trading was volatile. Whilst our Christmas and Halloween product offer was our strongest ever and December saw an improvement in sales growth, UK high street footfall remained below last year and this has impacted our overall sales growth.

From April 2016 onwards, we will report Poundland sales as a single entity, highlighting the sales performance of the outstanding non-converted 99p Stores estate in H1 2016 as appropriate.

Strategy Progress

We are in a strong position to execute our growth plans. The 99p Stores' conversion programme has commenced well and at pace with 25 stores converted. The vast majority of the estate will be converted to Poundland by the end of April 2016. Sales growth in the converted stores is in line with plan and we continue to expect to generate incremental EBITDA of at least £25 million from the acquisition.

The acquisition is principally a property deal for the Group, adding 40% to our estate and nearly 160 stores in the South of England, where we are under-represented and where prime property assets have historically been difficult to acquire.

We opened a net 14 stores in the UK and in Ireland during Q3 which, together with the 25 stores converted from 99p Stores, takes our Poundland store numbers to 628 in the UK and 51 Dealz stores in Ireland (2015: 519 and 34 respectively). We also have 227 stores in the remaining 99p Stores estate. We expect to open around a net 70 new stores in the year as a whole and around 60 new stores in the next financial year.

We continue to develop our Dealz trial in Spain and are making good progress in refining an offer that is carefully tailored for the Spanish consumer. We recently opened our tenth store and we now trade as planned from four location types. As previously announced, we will continue to fine-tune our offer and will update the market further at our preliminary results in June.

Our plans to use the acquired Family Bargains stores to launch a new multi-price format are well advanced. We are developing a comprehensive range of exceptional value products. We are excited by the opportunity that this presents. The trial starts in April and we will give more information on progress and future plans at our interim results in November.

Financial Position

The Group generated strong cash flow during the period and ended Q3 with net cash of £35.4 million (2015: net cash of £33.9 million).

Commenting on Poundland's performance, Chief Executive Jim McCarthy, said:

"Total sales in the third quarter increased by 30.1% on a constant currency basis and our Christmas and Halloween ranges were our best ever. However, the trading conditions that we experienced in November continued through the third quarter, with high street customer numbers down year on year and this has impacted sales growth.

"I am very encouraged by the sales uplifts of converted 99p Stores and by the speed and efficiency of the conversion process. I expect the store conversion programme to be substantially complete by the end of April and still expect to generate incremental EBITDA of at least £25 million from the transaction. In addition, we remain on track to open around 70 net new Poundland and Dealz stores in the UK and Ireland in the full year."

Poundland will publish its Q4 trading update for the year ended 27 March 2016 on 14 April 2016.

A call for analysts and investors will be held today at 9.30am. Please use the following conference call details: Dial in: +44 (0)20 3003 2666. Password: Poundland

For further information please contact