Poundland, the biggest single price store chain in the UK, is set to launch an initial public offering on the London stock market next year, expected to value the company at between £700 million and £800 million. As a result, US private equity firm Warburg Pincus, who paid just £200 million in 2010 for a 76% share of the company, could be on course for a windfall. According to the Sunday Telegraph, the company has appointed investment bank Rothschild to manage the listing, and will bring other advisors on board in the coming weeks.
The move follows a recent rise in global IPO activity as firms take advantage of improving stock market conditions, including the high-profile IPO for postal service company Royal Mail. In the last fiscal year to 31st March, 69 new Poundland stores were opened in the UK and Ireland, bringing the total number of stores up to 488. In that time, pre-tax profits increased by 29% to reach £23 million and sales were up 15% to £880 million.
Starting out as just a single store in Burton-upon-Trent, Staffordshire, in 1990, the company sells all its products for one pound and has benefited from the upsurge of customers turning to discount retailers in the economic downturn. Predicting half a million new customers by the end of the year, Poundland aims to eventually more than double in size to 1,000 outlets in the UK, as well as pursue expansion in Europe.
