Poundland, which faces an investigation into its takeover of rival 99p Stores, said its annual sales topped £1 billion for the first time.

The West Midlands-based firm, which has 547 UK stores and 41 outlets in Ireland, reported a rise in sales of 11.4 per cent to £1.1 billion for the year to March 29th.

It said same store sales lifted by 2.4 per cent during the period, adding that it opened 60 stores in the UK and Ireland as planned, ten fewer than last year. The group said its full-year sales growth was lower than last year’s 13.3 per cent rise due to strong trading the previous year and fewer stores opening.

The group faces a competition probe from the Competition and Markets Authority (CMA) into its £55 million takeover of rival 99p Stores, which could see it having to sell off a clutch of outlets. The planned merger, announced in February, would create a network of 800 shops.

Last week the CMA said the deal could mean ”substantial lessening of competition in 80 local areas where the companies overlap” and 12 where they would compete ”in the near future”.

Today, Poundland said it continued to “carefully consider” the CMA’s announcement and “will make a further announcement in due course.” The retailer added that it has a strong pipeline of openings for the current financial year and it is on track to meet full-year underlying pre-tax profit forecasts of £43.8 million.

Chief executive Jim McCarthy said: “After a solid quarter of sales growth, Poundland’s revenue for the 2015 financial year was over £1 billion for the first time.” He added that despite “tough trading conditions Poundland continues to perform well.”

The group said it was pleased with the progress of its Spanish trial format, which saw it reach a total of five stores in the final 13 weeks of its year. Discount stores such as Poundland, and grocery discounters including Aldi and Lidl have eaten away at the market shares of major grocers, sparking the ongoing supermarket price war.

Grocery prices are 2 per cent lower than they were last year, according to the latest 12-week data from research group Kantar Worldpanel. Lewis Sturdy, a dealer at London Capital Group, said: "Poundland has proved that if you look after your pennies the pounds will look after themselves — £1 billion worth of revenue for the first time. "Investors may shrug off the competition probe into

Poundland’s takeover of rival 99p Stores as operations are cashing up fine.”

PA