Matalan unveils a rise in profits

Value retailer Matalan surprised the market with interim results ahead of expectations on Wednesday.

Analysts had feared disappointing figures from the store group, but after the announcement said the news from Matalan was 'pretty positive'.

Pre-tax profits of£53.6 million were up 9 per cent, on turnover up 28 per cent to£492.2 million for the 27 weeks ended August 31.

Like-for-like sales rose 4 per cent, compared to a 10 per cent rise last year. In the seven weeks ended October 19, like-for-like sales were up 8.9 per cent.

Broker Numis said trading patterns at Matalan are good but the future is uncertain. 'We remain cautious longer term as comparatives get tougher and we are not convinced, following a few weeks of robust trading,' the broker said.

Numis's forecast of£130.7 million profit for the year is likely to be cut to£120 million. Seymour Pierce reduced its forecast from£129 million to£125 million.

Matalan, headed by Paul Mason, opened 13 shops during the period and will add a further 13 in the second half. The retailer said its organisational structure is being streamlined.

Matalan's IT function has been outsourced following the decision to invest£25 million in improving systems.