Pepco Group said on Thursday it would open at least 600 new stores across western Europe between 2027 and 2030 after reporting a 17.5 per cent rise in first-half underlying EBITDA to €516 million.

The discount retailer said revenue increased 5 per cent to €2.5 billion in the six months to 31 March, while underlying pre-tax profit climbed 52.3 per cent to €198 million. Group like-for-like sales, excluding fast-moving consumer goods, rose 3.6 per cent.

Pepco said stronger profitability in Spain and Italy had prompted it to accelerate expansion plans in western Europe, where the new openings would double its presence. Stephan Borchert, chief executive, said: “The accelerating store economics we are seeing in Western Europe give us the conviction to expand on our ambitions there.”

Pepco remains on track to open 250 stores this financial year and is preparing a small trial launch in Ukraine. Borchert said the Ukrainian pilot represented “a potentially significant new growth opportunity for the group over time”.

The Warsaw-listed retailer has been reshaping its business since selling the struggling Poundland chain last year to focus on the Pepco brand. Pepco said the separation of the Dealz business would be completed by the end of the financial year, although Dealz revenues fell 6.6 per cent during the first half.

Pepco brand revenues rose 6 per cent to €2.3 billion during the period, which the company attributed to the implementation of a transformation plan introduced in March 2025. Borchert said: “I remain confident in the growth potential of this business.”

The company raised its full-year forecast in April and said disruption from the Iran war had so far had only a limited effect on its supply chain. The company announced a one-off capital return of up to €400 million and said it planned to increase its dividend payout ratio progressively towards 40 per cent of underlying profit over the coming years.

Pepco operates more than 4,000 stores across 18 countries and has become one of Europe’s fastest-growing discount retail chains.

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