Comment: Will Jim McCarthy stay at Poundland after an IPO?

Corporate action is on the cards at single-price retailer Poundland. An IPO is widely expected by City observers.

The retailer, majority-controlled by private equity giant Warburg Pincus, has been doing well. You have to shift a lot of items at a quid to make a living, and last year it sold almost a billion - an easy calculation to make given sales of £880m, a 15% increase on the previous year - to deliver a 29% increase in profits.

Poundland has a pretty consistent track record. It has certainly benefited from the shopping habits bred in the recession and downturn. However, Poundland has been run well. That’s testament to the nous of down-to-earth chief executive Jim McCarthy, who brings a lifetime of experience from retailers such as T&S and Sainsbury’s.

There is no cause to assume he would not remain at Poundland following an IPO. However, having led the retailer since 2006 and taken it through one sale, it would not be entirely surprising if he felt ready to pass on the baton.

Ruling out that possibility in the near future and detailing what succession plan is in place would further strengthen Poundland’s appeal to investors.

Any business should be bigger than one person of course, but the question of leadership matters. Poundland rival B&M is also pondering flotation.

In each case, valuations could be around the £1bn mark. While some investors will no doubt back both horses, others will prefer to make a call on which one looks best positioned to win out over the other in future.

A toast to Conviviality

Conviviality Retail modestly led the way on a new round of IPOs when it floated on AIM in July. On Monday the Bargain Booze owner issued an encouraging update, its first since listing. A performance in line with expectations and the so-far smooth integration of recently acquired Wine Rack should help build confidence in the sector as more retailers seek to come to market.