Matalan EBITDA fell 41% to £91.1m in its full year.
EBITDA plummeted after the retailer decided to take a margin hit and not pass on escalating production costs onto consumers. Fashion retailer Primark fell 8% in its financial year to September 17 after it absorbed the cost of rising raw material prices.
Like-for-like sales slipped 0.4% according to Matalan’s unaudited figures for the year to February 25. Total sales edged up 1.9%.
The fashion and homewares retailer expects its EBITDA performance to stabilise at £85m to £95m for the last twelve months at its half year point in August.
Matalan closed the year with a cash position of £96.2m, up from £83.1m last year.
It said: “Matalan continues to be a highly cash generative business and we maintain a positive outlook for our cash balances.”
The retailer, which had agreed to reset the covenants on its revolving credit facility, was unable to come to an agreement with one of its banks so decided to cancel the £20m facility held by the bank in question.
It said: “We are confident that we have sufficient levels of liquidity in our business from cash balances, the £30m revolving credit facility that remains and the ongoing support of our shareholders.”