* Core profit rises 15.6 pct to 45.4 mln stg in 2012-13
* Revenue up 15 pct to 880 mln stg
* Trading in 2013-14 is ahead of expectations
* Targets doubling number of UK stores to over 1,000
* Plans to expand Dealz into other European countries
By James Davey
LONDON, Oct 1 (Reuters) - Poundland, Britain's largestsingle-price discount retailer, is considering an initial publicoffering (IPO) in the first half of next year, two sourcesfamiliar with the situation told Reuters.
The group is also targeting a doubling of its British storesto more than 1,000 as well as expansion in Europe, giving it agrowth story to sell should it choose to press the button on aLondon listing on the back of a successful Christmas.
Discount retailers have outperformed the market in theeconomic downturn as consumers, battling inflation rising fasterthan wages, have sought to make savings. On Monday, Aldi posteda more than doubling in 2012 profit.
Poundland is 76 percent owned by private equity groupWarburg Pincus, with the balance owned by the retailer'smanagement, led by chief executive Jim McCarthy, a 30-yearveteran of the retail sector.
Speaking after the 458-store firm posted a 15.6 percent risein underlying earnings for 2012-13, McCarthy said he understoodthe strong performance "would prompt some of the questions"(about an IPO) but declined to be drawn on the issue.
A Financial Times report in May said an auction amongprivate equity firms was more likely than a flotation.
McCarthy said of Warburg Pincus, "They're private equity andthey buy and sell businesses. Management's job is to keepdriving the numbers and we'll continue to focus on that."
Warburg Pincus declined to comment.
Stronger equity markets have helped revive new listings inEurope this year. European firms have raised $15.9 billion fromflotations in the first nine months, three times the year-agolevel, according to ThomsonReuters data.
Independent retail analyst Nick Bubb said the British quotedretail sector is short of plays on two of the fastest growingareas of the industry, namely discount retailing and onlineretailing, so a Poundland IPO should be well received.
"But Poundland has a lot of faster-growing discountcompetitors and it will need to convince investors that it isnot showing some signs of maturity," he said.
The group made underlying earnings before interest, tax,depreciation and amortisation (EBITDA) of 45.4 million pounds($73.5 million) in the year to March 31, up from 39.3 million.
Total sales rose 15 percent to 880 million pounds as itsoffer of over 3,000 products and over 1,000 branded goods fromfirms such as Cadbury, Heinz, Coca Cola and Kodak - all at theprice of one pound - found favour with consumers.
"We're very good in austere times but we're even better ingood times," said McCarthy, noting the appeal of the Poundlandbrand is broadening across all socio-economic groups, attractingan average of 4.5 million customers a week.
Poundland said trading in its new financial year was aheadof internal expectations.
The group opened a net 69 new stores in Britain and Irelandin 2012-13 and plans 50 net new stores in 2013-14, havingalready opened 30.
"Over time I'm confident that we will have over 1,000Poundland stores in the UK," said McCarthy.
He also sees potential for further international expansionafter a profitable first full year of trading at the firm'smulti-price format Dealz business in Ireland.
He said Poundland was close to taking Dealz into newEuropean markets but declined to identify them.
- Warburg Pincus