Struggling Matalan makes sales progress
Tuesday, 31 Oct 2006 10:59
Matalan cut its losses in the first half of 2006
Highstreet chain Matalan said that its sales had fallen by one per cent during the half year ending August 26th this year.
The clothing and homeware retailer saw its pre-tax profits fall from last year's £30.7 million to £28.7 million this year, having been hit by difficult conditions on the highstreet throughout the first half of 2006.
Despite this, however, the one per cent drop in like-for-like sales was an improvement on 2005's equivalent results, which saw a 6.3 per cent fall. Core clothing profits grew by 0.5 per cent, significantly up from last year's drop of 1.5 per cent.
"Trading conditions remain challenging. However, our agenda of focusing on improving profitability and cashflow is now beginning to bear fruit," Matalan's chief executive, John King, said.
"Our gross margin is now improving, we have tightened controls over costs and stocks and our working capital improvements will see the company in a healthy net cash position by the year's end."
Matalan said its net debt has reduced from £36.3 million last year to just £10.5 million last year, while basic earnings per share had improved from 4.6 pence in 2005 to 4.8 pence today.
Shares in Matalan rose by 0.13 per cent on early morning trading.