Pan-European variety discount retailer Pepco Group has reported that its underlying profit before tax (PBT) in fiscal 2023 (FY23) was down 33.7% year-on-year (YoY) on a constant currency basis to €202m ($253m).

Total revenue was €5.64bn in FY23, up by 17.7% YoY on a constant currency basis compared to FY22.

Like-for-like revenues of Pepco and Poundland grew 6.3% and 5.6% respectively.

During the 12 months ended 30 September 2023, Pepco’s underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 3.1% on a constant currency basis to €753m, compared with €731m in FY22.

Pepco delivered a gross profit of €2.26bn in FY23, up 15.3% from €1.96bn a year previously.

The retailer’s net debt at the end of FY23 was €411m, against €275m in FY22.

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Pepco Group opened 668 net new stores in FY23 and was operating 4,629 stores at the end of the fiscal year.

In fiscal 2024, the retailer plans to open at least 400 net new stores across all formats.

Pepco Group executive chair Andy Bond stated: “Despite a challenging market backdrop, we delivered another year of strategic progress and record sales of €5,649m, against a strong prior year comparative.

“Looking ahead to 2024, while we expect industry-wide short-term sales challenges to continue, we are cautiously encouraged by recent third-party data pointing to an expected easing of certain pressures on household budgets, particularly in Central and Eastern Europe.

“We also continue to expect gross margin recovery throughout the year, and are already seeing encouraging signs here. The group has a market-leading customer proposition, a strong balance sheet and resilient operating cash flow to continue success across Europe”.

“The opportunities in our core markets remain significant, and we will leverage them in a more targeted way, with an enhanced emphasis on capital, returns and free cash flow, helping to grow the business in line with our renewed strategy.”