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Poundland is weighing up the closure of up to 80 shops following the integration of the 99p Stores estate.

A list of locations across the country is in the hands of property agents as the business looks to offload some of its 900-strong base, according to reports. The news comes just a few months after the completion of the £610m takeover of the discount chain by Steinhoff International.

It’s been an of upheaval for Poundland following the troubled acquisition of 250-plus outlets from 99p Stores. The deal was finally approved in November 2015 after a six month investigation by the CMA.

Shares in Poundland plunged in value when it eventually took control of 99p Stores and discovered the credit insurance had been lost, with sales falling and stock levels non-existent.

In June this year, Poundland revealed that its own pre-tax profits had slumped 84% to £5.9m last year as the problems surrounding the acquisition of 99p Stores took their toll.

The retailer accelerated the conversion process of the 99p Stores estate and transformed 235 into Poundland stores and sold or closed 17 others. Former Poundland CEO Jim McCarthy said at the time of the 99p Stores takeover that some of the stores would be sold off where there was already a Poundland.

Analysts at Peel Hunt said this morning that the potential closure of 80 Poundland stores was “terrific news” for B&M Bargains and the rest of the discount sector.

Jonathan Pritchard and John Stevenson at the broker added they had expected the Poundland store opening programme to be reduced to virtually nil and for Pep&Co to take up floor space in existing shops.

“We had not envisaged this scale of closures though,” the pair said in a note. “There will be outlets that are of interest to the likes of B&M, but we would imagine that the majority will leave the discount sector.

“One of the key bear points surrounding B&M has been the amount of capacity going into the space. Demand is now significantly outstripping supply and good companies like B&M will take advantage.”

Morning update

It is another quiet Monday morning, with no grocery news of note on the stock exchange. The FTSE 100 has dropped 1% since markets opened to 6,775.79 points. B&M European Value Retail (BME) has opened 0.6% down at 247.9p despite brokers at Peel Hunt flagging up the stock as “undervalued” (see above).

There are not many risers to take note of this morning, with Tesco (TSCO) down 1.8% to 208.5p, Ocado (OCDO) dropping 1.5% to 271.6p, Marks & Spencer (MKS) down 1.4% to 330.6p and Sainsbury’s (SBRY) 1.4% in the red at 232.8p.

This week in the City

It’s looking a little busier on the markets this week after a very quiet morning. Travel concession group SSP and ingredients and flavour manufacturer Treatt report annual results on Tuesday morning.

Soft drinks supplier Britvic (BVIC) will give an indication on Wednesday of what impact the weather and the war on sugar has had in the past 12 months. Analysts at HSBC expect a solid year – with sales up 5.4% to £1.4bn thanks to the acquisition in Brazil, although down 0.9% on an underlying basis – but worry about the outlook due to sterling weakness post Brexit and underlying increases in commodity prices for sugar and orange juice.

Wednesday also brings the monthly GFK Consumer Confidence index, which is unlikely to bring much festive cheer, as well as interims from Greene King.

McColl’s updates the City with quarter four trading on Thursday, with AGMs from Hotel Chocolat and PureCircle.

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