Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Poundland – as predicted a results shocker

By Chris Bailey of Financial Orbit

19 November 2015 04:59

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Back in September I confessed to the ShareProphets readers that I had been making some semi-regular visits to my local 99p Store. I also called a sell/avoid/short on Poundland (PLND) shares and it is the latter which has to interest us today following a litany of disasters in the company’s interim results statement today.

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Comments

David Russell

21 November 2015, 22:18

Sorry its a bit late but had some problems. I am a shareholder and also bought a load on the recent drop. I think all retailer have the same problems and also the grocers (supermarkets).In the past ten years I have lost a lot of money but found certain companies always come good and I hope poundland is one of these.I was not keen on the 99p deal because I did not know if 99p had any property liabilities in the form of long leases but I trust the management to do the best for the company and hope to double my money. Time will tell.:)
MrMoto

22 November 2015, 06:38

Mad to think post flotation, Poundland had a market cap of over £1 billion. Great business but I fear the 99p stores will divert their focus and the share price will suffer. Like many acquisitions – They look good on paper, but the lack of focus they create can ruin a business. Happens so often.
Chris Bailey

23 November 2015, 03:49

@David Russell – thanks for the comment. I like the longer-term focus you have…and this is what Poundland’s management need to have and the best way to do this is to stop the break-neck expansion and run the current estate better/improve the cash flow – and if they can hive off the more fledgling Irish/Spanish businesses then they should do so. Re 99p Store property liabilities there are some but it is not their biggest problem which is the aforementioned sharp drop-off in trading.

@MrMoto – totally agree. Ok idea but took too long and they paid too much/took their eye off the ball. Now they have got to try and pull it around before Xmas… A shabby post Xmas statement may be the nadir though. More on that in early-ish January.