Poundland, N Brown and Purplebricks

“The FTSE 100 opened firmly in the red as Wall Street ended lower overnight and Asian markets got off to a shaky start. The US Federal Reserve decided to leave interest rates unchanged in the face of uncertainties in the jobs market and Japan refrained from taking further stimulus measures to steady the yen. The EU referendum and the wider impact of a possible Brexit continues to weigh on sentiment,” says AJ Bell Investment Director Russ Mould.

“Poundland’s pre-tax profits slumped due to the cost of absorbing 99p Stores, which it bought last year. Poundland faced a massive integration programme but now has a unified estate of more than 900 stores. Pre-tax profits were down by 84% and the group has trimmed its dividend but its shares were stable in early trading with the prospect of takeover by South Africa’s Steinhoff in the wings.

“Steinhoff, which has already been thwarted in attempts to buy Argos and Darty, has increased its stake in Poundland to more than 22% and confirmed a possible offer is being considered.

“Clothing retailer N Brown is on track to meet full-year guidance despite subdued trading in the first quarter. The group, which focuses on plus-size and more mature customers, saw a small drop in group revenue but continued growth in its online sales. Its three ‘power brands’ - JD Williams, Simply Be and Jacamo - continue to outperform the wider group and its systems transformation programme, Fit 4 the Future, remains on track.

“Online estate agency Purplebricks is eyeing the £3.3bn Australian market after continued momentum at home. Full-year losses more than doubled to £11.9m but revenues jumped to £18.6m from £3.4m. Its instruction to sales conversion rate is above industry norms at over 77% and the group is confident its UK business will move into profit in the current financial year. The group plans to launch in Australia this year.”

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