Poundland profits fall amid talk of takeover
Takeover target Poundland, which has around 20 stores in Northern Ireland, posted a slump in annual profits after a "challenging but transformative" year as its suitor stepped up its pursuit with a 23% stake in the discounter business.
South African retail group Steinhoff - which owns UK furniture firm Harveys and Bensons For Beds - revealed late on Wednesday that it had bought 61.2 million ordinary shares in the budget retailer and confirmed any potential offer would be made in cash.
Its interest comes after a testing time for Poundland, which had seen its shares slump by a third in a year following tough trading and a difficult takeover of rival 99p Stores.
Annual results laid bare the group's sales woes as underlying pre-tax profits fell 13.5% to £37.8m in the year to March 27.
Bottom-line pre-tax profits crashed 83.7% to £5.9m, but this included converted 99p Stores.
Poundland advised shareholders to "take no action" following Steinhoff's announcement on Wednesday that it was considering a bid.
The move marked the latest takeover attempt by Steinhoff, after it lost out in a battle with Sainsbury's to buy Argos owner Home Retail Group in March and was outbid for London-listed white goods retailer Darty.
Steinhoff has until 5pm on July 13 to make a firm bid for Poundland or walk away under City takeover rules.
Jim McCarthy, outgoing chief executive at Poundland, remained tight-lipped on the Steinhoff interest.
He admitted the group had seen "difficult times", adding the 99p Stores were in a "very poor state" when it finally completed the £55m takeover after a lengthy competition inquiry.
But he assured the chain would "return to growth".