Poundland sales fall amid major store revamp
Poundland has reported a 4.9% fall in like-for-like sales in the second half of its financial year to 27 March.
The company blamed "difficult" market conditions over the last few months and the disruption caused by last year's takeover of 99p Stores.
The conversion of 99p Stores to Poundland shops will be completed by the end of April, which is "well ahead of plans", the company said.
It said that stores already converted were seeing "strong sales".
Poundland expects the converted stores to add an extra £25m in profits by the end of the current financial year.
For the year to 27 March, it expected underlying profits to be in line with expectations.
"It has been a tough quarter for the core business, which was impacted by difficult market conditions and disruption from the accelerated pace of delivery of the 99p Stores' conversion programme," the company said.
Including the purchase of 99p Stores, Poundland has added 336 stores over the last year, which increased its estate by more than 50%.
After opening higher, shares in Poundland closed down 3.6% at 142.25p.
Shares traded as high as 363p last year but more than halved in value after the company was hit by weaker demand and stronger competition.
Clive Black, head of research at Shore Capital, said that although the previous financial year "has not panned out as Poundland's management or shareholders would have liked", there was cause for optimism.
Mr Black sees a return to growth in the current financial year and "strong cash generation in due course, which could fuel sustained expansion".