Matalan has achieved a significant reduction in pre-tax losses despite a decrease in sales revenue.
- The retail company reported a 44% reduction in pre-tax losses, amounting to £60 million for the fiscal year ending 24 February 2024.
- Revenue experienced a 6% decline, attributed to strategic decisions and challenging market conditions.
- Improved gross margins by 8% to £495 million were observed, driven by successful buying strategies and reduced discount levels.
- The business’s liquidity has notably improved, with unrestricted cash reaching £123 million.
Matalan has successfully reduced its pre-tax losses by 44%, bringing it down to £60 million for the year ending 24 February 2024. This improvement comes despite a 6% dip in revenue, underscoring the company’s strategic adjustments amidst challenging trading conditions. The decrease in revenue is mainly linked to considered strategic choices and the broader market challenges currently affecting the retail sector.
The company has seen a significant enhancement in its EBITDA, which saw a remarkable 92% year-on-year increase to £53 million. This boost is largely credited to improvements in gross margins, effective cost management, and operational enhancements. The gross margin has improved by 8%, reaching £495 million, primarily driven by optimised purchasing strategies and a reduction in discounting, which facilitated a rise in full-price sales.
Matalan’s financial position has been further strengthened by an improved cash flow, with unrestricted cash reserves increasing to £123 million. This development is attributed to the company’s focus on enhancing EBITDA and maintaining stricter stock level controls. The organisation highlights this improvement as a vital marker of its growing liquidity strength.
With a refreshed executive team, Matalan has taken assertive steps towards executing its transformation agenda. According to CEO Jo Whitfield, the company has commenced a comprehensive transformation amidst a demanding backdrop, focusing on capitalising full-price sales and rigorous cost management to drive profitability. Whitfield emphasises that while it remains early days in the transformation journey, the initial steps have already demonstrated tangible impacts.
In a move to bolster its strategic objectives, Matalan appointed Dave Williams, former finance director at Poundland, as the new CFO to succeed the long-serving Stephen Hill. This change marks a pivotal moment in Matalan’s leadership restructuring aimed at strengthening both online and in-store operational efficiencies.
Matalan’s strategic efforts and leadership adjustments have fostered marked improvements in its financial health despite enduring market adversities.
