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Matalan reports "satisfactory" first half

Matalan has reported a “satisfactory” first half performance and confirmed that Alistair McGeorge has stepped down as chief executive.

Matalan said that total sales rose 1.6% to £539.8m in the 26 weeks ended August 28. Like-for-likes were up 0.5% during the period, but this equated to a 9.6% like-for-like increase when compared with the same period two years previously.

First half EBITDA was £77.3m, up from £71.4m the year before.

Operating profit before exceptionals was £60.5m, compared with £53.5m in the first half of 2009.

“The group has delivered a robust performance against very strong growth in the same period last year. This is in the context of a highly competitive market, continued economic uncertainty and widely reported margin pressures.”

Matalan finance director Paul Gilbert

McGeorge in non-exec role

Matalan, which axed a £1.5bn sale process in February, confirmed in a statement that McGeorge had moved to a non-executive role at the chain and that finance director Paul Gilbert had taken on the chief executive duties on an interim basis.

In a statement Gilbert said: “The group has delivered a robust performance against very strong growth in the same period last year. This is in the context of a highly competitive market, continued economic uncertainty and widely reported margin pressures.

“Our new store opening programme continues to make good progress and we have delivered encouraging results with a number of strategic growth initiatives.”

Operational growth

Matalan, which has 205 stores in the UK and four overseas franchises, said that its online arm had continued to grow and that the chain had opened two stores during the period with a further five planned to open during the remainder of the year.

Matalan added that IT initiatives had been introduced during the period to improve stock availability, reducing the need to mark down stock and also helping to increase sales. It said that the benefit of the changes would be felt in the next financial year.

Outlook

Matalan said it remained “cautiously optimistic” for the rest of the year and that trading conditions were “likely to remain very challenging as long as the outlook for the UK economy and for consumer’s disposable income remains uncertain”.

Chairman John Mills thanked McGeorge for his contribution to the business since it was taken private in 2006 by founder John Hargreaves, who completed a £525m refinancing of the business in April, paying himself a £250m dividend.

Mills said: “In the last four years, we have made immense strides in developing and growing the business, and Alistair’s clear and decisive management of the business has been a key contributor to this. We are pleased he is staying with the business as a non executive and look forward to his continued involvement.”

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