Poundland is on course for an £18m profit in the year to September, sources close to the company say — a more-than £100m swing from last year's £85.2m pre-tax loss, achieved while its owner moves towards a break-up of the retailer.

The unaudited profit figure is projected to rise above £20m once the audit is complete, according to the sources. The result undermines the position of US investment firm Gordon Brothers, which insists the business remains financially fragile even as it rejects solvent offers for the whole company.

Gordon Brothers said on Thursday: "In spite of our efforts and the tremendous efforts of management to deliver a turnaround, the business remains challenged and vulnerable to any potential downturn in future trading."

What do the numbers show?

The scale of the reversal is stark. Poundland slumped to an £85.2m pre-tax loss in the year to September 2024. An £18m profit this year would deliver a swing of over £100m in a single reporting period.

Revenue stood at £1.5bn in the year to September 2025. At that level, an £18m profit implies a margin of roughly 1.2 per cent — thin by most retail standards, but positive for a chain that many had written off.

Steve Smith, who founded Poundland with his father Kevin Smith in 1990, told City A.M. the retailer has "turned a corner" under Gordon Brothers' ownership. He said internal projections point to a £21m profit for the year.

"Even with all this going on, the staff are performing, the company is performing. It's turned the corner. So why are they putting it into administration?" Smith said. "People are willing to put in offers to buy Poundland. So these bidders don't think it's vulnerable. They wouldn't be putting their cash in if they did."

The recovery is credited to managing director Barry Williams, who has pushed the return of the signature one-pound price point across more of the retailer's ranges.

Why is administration still on the table?

Gordon Brothers filed a notice to appoint administrators last week, casting doubt over the futures of 12,000 staff and 600 stores. The move drew criticism that the firm is steering the retailer towards collapse to extract more money from it.

The investment firm refused a solvent offer for the whole company from Irish firm Martin Property Group because it could not provide up-front funding for a £30m loan that Gordon Brothers bought from Pepco, Poundland's previous owner, for one pound. Other rejected whole-company bidders include Innovest and Xyra Group.

Smith warned the job losses could extend well beyond Poundland's own payroll. The retailer supports around 30,000 jobs in its supply chain, many of which he said could be lost in an administration.

Who is stepping in?

Liam Byrne, chair of Parliament's business select committee, said Gordon Brothers is in "active talks with several credible buyers about selling Poundland as a going concern". Byrne had ordered the owners to appear before the committee next week, but will now let those talks proceed in private.

"We want those talks to succeed and we want to understand what I know will be highly sensitive commercial information in detail," he said.

Political pressure is building from several directions:

• Robert Jenrick, Reform UK's economic spokesman, said on Monday he has been supporting multiple Poundland bidders and attacked "corporate raider" Gordon Brothers.
• Greater Manchester mayor Andy Burnham said on Wednesday the owners must work with the government on a "practical solution" to secure the future of workers and shops.

If the chain does collapse, rivals are circling. Lidl, Tesco, Iceland, B&M, The Range and Poundstretcher are among the retailers hoping to pick up Poundland stores from any break-up.

Gordon Brothers declined to provide further comment. Poundland declined to comment.