Matalan unveils 30% increase in profits

BUDGET fashion and homewares chain Matalan shrugged off consumer concerns as it posted a 30 per cent leap in earnings and said growth plans remained on track.

The group pledged its commitment to an ambitious store- opening programme, which could see a further 100 out-of-town outlets in coming years, and increased investment in its online offering. Matalan posted underlying operating profits up 30 per cent to 132.9 million in the year to 27 February.

Like-for-like sales rose 6.7 per cent – a slowdown on the previous year's growth but resilient compared with many high street rivals, as hard-up consumers have turned to discount stores to save money.

The company expanded last year, opening three new stores in Elgin, Manchester and London, to take its UK portfolio to 205.

The group, which also has three overseas franchise stores, is accelerating its UK outlet expansion by between six and nine stores this year and up to 15 next year. It is also seeking to drive up web sales.

Chief executive Alistair McGeorge said: "This has been an exciting year for us, delivering very strong sales growth in what remains a challenging market."

He added: "We remain convinced of the continuing relevance of Matalan's offer to UK consumers and have recommenced our store opening programme and increased our investment in our online business to reach out to new customers."

The business, which employs about 15,000 staff, secured a 525 million funding package earlier this year from investors after abandoning attempts for a sale.

It is putting the proceeds of the deal into its growth strategy, while also financing an estimated 250m payout to its founder, John Hargreaves.