Matalan has recorded a 10% surge in EBITDA to £100m for the full-year as online sales surged 45% but the retailer “remains cautious” of the trading outlook.

In the 52 weeks to February 23 total sales at the discount fashion and homewares retailer edged up 0.7% to £1.1bn.

Matalan ended the year with £120.7m in cash.

Matalan said it “remains cautious” about the outlook for consumer spending and confidence while it “expects challenging trading conditions to continue”.

The retailer said that since the year end the first quarter has been “challenging” but “broadly in line with expectations”.

But Matalan chief executive Darren Blackhurst said the retailer is “well-positioned for the coming 12 months” due to its growing customer base and multichannel capability.

Matalan online sales increased 45% in the period and it enhanced its multichannel capabilities by rolling out click-and-collect.

Blackhurst added: “Our focus remains the delivery of outstanding value to our customers through the development of our offer and a tight control of costs and cash given the prevailing economic backdrop.”