Pepco Group (PCO) H2 2025 earnings summary

Executive summary

• Achieved a transformational year with strategic execution, including the sale of Poundland, exit from FMCG, and focus on the core Pepco brand, driving higher margins and profitability.

• FY25 revenue grew 8.7% to €4,523m, with underlying net earnings up 19.7% to €219m and underlying EBITDA up 10.3% to €865m.

• Enhanced shareholder returns through a 9.6 cents/share dividend, €100m share buybacks executed/underway, and €334m free cash flow.

• Significant progress in digital transformation, operational efficiency, and ESG initiatives, including gender balance and emissions reduction.

• 247 net new stores opened, with strong expansion in CEE and Western Europe.

Financial highlights

• Group revenue reached €4.5bn (+8.7% YoY); gross margin improved 100bps to 48.0%.

• Underlying profit after tax rose 19.7% to €219m; underlying EBITDA (IFRS 16) up 10.3% to €865m.

• Free cash flow (unlevered) was €334m (+16.4% YoY); capex reduced to €108m.

• Dividend per share increased 57% to 9.6 cents; ongoing share buyback program up to €200m through FY27.

• One-off IFRS 16 impairment charge of €38m impacted EBIT.

Outlook and guidance

• FY26 revenue growth expected at 6–8%, with gross margin at least 48% and underlying EBITDA growth of at least 9%.

• Underlying net earnings expected to exceed 25% YoY growth in FY26.

• Targeting 250 net new stores, mainly in CEE and Western Europe.

• CapEx guidance €160–180m, with free cash flow expected to exceed €200m.

• Upgraded mid-term guidance: gross margin at least 48.5%, free cash flow over €250m, net earnings CAGR at least 15%.