Matalan cash management "beginning to bear fruit"
31 October 2006 09:23
Under-offer clothing retailer Matalan has seen an improvement in its sales and a reduction in net debt. Like-for-like sales for the 26 weeks ended 26th August were down 1%, compared with a 6.3% fall in the same period last year, and net debt was reduced from £36.3 million to £10.5 million. However, profit before tax fell to £28.7 million from £30.7 million in 2005 and the company has not declared an interim dividend. John King, chief executive of Matalan said: "Trading conditions remain challenging, however our agenda of focusing on improving profitability and cashflow is now beginning to bear fruit. 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 end." Despite the tough market conditions, Matalan maintained its market share and renegotiated terms with overseas suppliers to save an anticipated £25 million by the end of the financial year. Matalan announced that it had accepted a 200 pence per share offer from its chairman John Hargreaves earlier this month.
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