'Don't write us off ' - Matalan

By FIONA WALSH
Updated:

 

NEW Matalan boss Paul Mason came out fighting in his first report to the City since moving in as chief executive of the tarnished retail star four months ago. 'Contrary to rumours, Matalan is far from a broken company,' he said. 'All businesses go through life cycles and this is one company that is moving forward. Our sales are still growing strongly.'

Shares in the out-of-town discount fashion group peaked at 800p in 2000 but they more than halved as growth rates slowed. Former chief executive Angus Monro left abruptly a year ago.

Today the shares climbed 17 1/4p to 368p after chairman and founder John Hargreaves delivered results in line with City expectations. Profits for the year to 23 February rose 30% to £107.6m, on sales 45% higher at £847.4m. Earnings per share were 27% higher at 18.4p and the dividend total is raised by 37% to 7.2p a share. Margins slipped a little on promotional activity but the lost ground would be made up this year, said Mason.

Profits would have been £1.1m higher had it not been for a fraud by one of the group's customers, who was jailed for five years last week. But Mason said the company had discovered the fraud and that he had no worries over its internal controls.

Like-for-like sales on the retail side rose 8.3%, well below the previous year's 21.5%. Mason said: 'We always expected that growth rates would slow.'

Mason, formerly managing director of US-owned supermarkets group Asda, will target improvements in the supply chain, systems and brand development. Matalan has 8.2m active members but, said Mason, was still one of the best kept secrets in British retail: 'We need to work on our brand awareness.'

Last week Matalan bought the Wolsey socks and knitwear business, complementing its Lee Cooper and Falmers jeans. Mason said the group was still looking for famous brands. For the first nine weeks of the current year, overall sales were up by 33%. Retail sales rose by 25%, with a like-for-like figure of 7.2%. Margins were 'slightly ahead'.

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