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Poundland to show drop in pre-tax profits
Poundland - Updates on Thursday 19/11

It is expected to show a drop in pre-tax profits to between £9m and £9.6m from £12.6m the previous year.

Poundland recently updated on weaker first-half trading in September against a tough equivalent last year and warned profits would be lower year-on-year.
Despite the fall, analysts are predicting Poundland’s total sales to be boosted by 50 new store openings. It is also set to launch its first TV ad as it pushes the brand in the run up to Christmas.

Poundland’s £55m takeover of rival 99p Stores was given the all-clear in September, boosting its footprint on the high street by 40pc with another 251 shops. A presence in Spain may also help boost the stock. With stores in Spain under its Dealz brand investors will be looking to see if further expansion is a good idea based on profitability there.

Shares in the company declined 36% from the highs in February to the lows in late September around the 268p – since then prices have hammered out a base but been capped at 300p and presently trades in the middle of the narrow range. The rise in the daily RSI indicates further bounce may be on the cards should momentum carry.
A push through the 50DMA at 290.66 would help cement a challenge on the 300p mark.

A double bottom may be in play here but will need confirmation of a break above the 300p mark. This would target (textbook) the 333p level which coincides with the trend line resistance from the February highs.

A break below support at 268 would implicate a move to 246p.

Average 12 month PT from 12 brokers is 357.22p. Rating Breakdown : Buy/hold/Sell = 7/5/0
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