Budget fashion brand Matalan boosted profits and revenue last year despite a “tough” retail climate which has seen other retailers forced to launch store closure programmes.
Revenue was £1.1bn in the year to 23 February 2019, up from £1.06bn in the previous year driven by a 31 per cent rise in online sales.
Gross profit before exceptional items was £128.4m, down from £136m, as the year suffered from the impact of the post Brexit weakness of the pound, Matalan said.
Operating profit fell from £73.1m to £67.4m and profit before tax was £30.1m, up from £20m.
The retailer spent £33.8m on additions to property, plant and equipment compared to £63.7m the previous year.
The firm said £18.1m of intangible assets include investment in supply chain reconfiguration, store refurbishment, online enhancements and the purchase of intellectual property.
Why it matters
The company, which has 231 UK stores and 32 overseas franchises, outperformed the market in what it described as a “tough retail climate”.
High street giants such as Marks & Spencer and Philip Green’s retail empire Arcadia have been forced to announce store closure plans as shops struggle with the rise of internet shopping and high rents.
Matalan refurbished 47 branches in the year and re-commenced a store opening programme with a new shop in Belfast city centre. The company said it plans to continue the programme and also has plans to open additional overseas franchises.
What Matalan said
Jason Hargreaves, Matalan chief executive, said: “The business has performed very well this year, outperforming the market in what remains a tough retail climate.
“In uncertain times, we are well positioned in offering the great design, quality and value that appeals to savvy customers.
“A very strong underlying sales, margin and cost management performance has enabled us to absorb a £39m currency headwind. This has delivered stability of Ebitda and an increase in profits before tax”