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- The potential Poundland IPO list price
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Many traders in the City are currently asking whether Poundland is about to make an initial public offering. Speculation is rife in the wake of the many recent IPOs that have been taking place in 2013, so could a Poundland IPO follow suit? Poundland is a chain of stores, each of which sells everything for £1. As of 2012 the company employed 10,020 people. The store was set up in 1990 by business partners Stephen Smith and Dave Dodd. It serves around 4.5 million customers every week and has plans to add 50 more stores to its retinue. A potential Poundland IPO could see the company valued at £800 million.
Banks have been hired to advise on whether a Poundland IPO would be a good move. If the IPO takes place it will do so in 2014. As of November 2013, the private equity owner of the store was Warburg Pincus. The firm was looking into hiring either Credit Suisse or JP Morgan to investigate potential steps that could be taken to enhance the future of the company. At the same time, Rothschild were advising Poundland on possible routes for further expansion. As of November 2013 neither JP Morgan nor Credit Suisse could comment on the Poundland IPO situation.
Traders considering the Poundland IPO will know that as of 2013, Poundland aimed to run 1000 shops within the near future. Jim McCarthy, the head of Poundland, spoke in 2013 of his ambitious plans for the future of the store. It was believed as of November 2013 that the store’s executives would much prefer a Poundland IPO to a sale to another private equity firm.
If you are interested in the Poundland IPO, it will be beneficial to learn that between December 2013 and the middle of 2014 it was expected that Poundland would rely on the strong equity market to carry it through. However, figures released earlier in 2013 proved promising for the store, with annual sales increasing by 15 % from March 2012 to March 2013, to a total of £880 million. EBIDTA rose by 15.6% to an impressive £45.4 million. Mr Mc Carthy stated in 2013 that 20% of Poundland customers are now from the AB demographic, a promising sign, and that the group was ready to capitalise on economic upturn. These facts go some way towards addressing the issue raised in the title of the piece, namely whether or not a Poundland IPO would be profitable.
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