Matalan fell to £100m loss before takeover, filings reveal
It comes as the cost-of-living crisis drove an ‘unprecedented hit’ to the business
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Matalan fell to a pre-tax loss of £103.4m in FY23, widening from a £7m loss the prior period, in a year that saw the group rescued by a group of investors.
According to newly-filed accounts with Companies House, EBITDA fell to £124.1m in the year ended 25 February 2023, down from £197.5m the prior year.
It comes as the cost-of-living crisis drove an “unprecedented hit” to the business, with consumer spending “severely curtailed”.
Despite this, revenues rose to £1.15m, up from £1m in FY22, driven by movements in selling price and range mix. The group said sales grew “strongly” year-on-year, in part due to FY22 sales still being affected by lockdown.
Shortly before the period’s end, Matalan was acquired by a group of investors that included Invesco, Man GLG, Napier Park and Tresidor. Following the takeover they agreed to provide Matalan with £100m in new growth funding.
In its latest Companies House filings, the company said: “Despite the operating company delivering strong revenue growth, the inflationary pressures faced by the business in terms of escalating inbound supply chain and staff costs severely impacted its level of performance.
“In addition, the deterioration of the currency exchange rate of sterling against the dollar and the need to significantly invest in promotional activity to stimulate sales volumes and to clear excess inventory meant the company saw a significant degradation in the level of its profitability.”
The group added that management focus was primarily on refinancing the group’s debt structure and the subsequent strategic sales process.
