Matalan - What a gross margin!
All,
Matalan even beat our relatively high expectations this morning. The company clearly prioritised full price sales over volumes, achieving a lower turnover, but at higher margin in return. Slightly elevated expenses and CapEx meant net cash production was on target.
By our estimates LfL sales must have come in at -1% for Q1, but the company has clearly adjusted to that level.
Sales came in £-5m lower than model, but COGS were lower by £9m.
SG&A and Logistics expenses each came in at £-1m higher than model.
Thus pre-IFRS 16 EBITDA was @3m higher.
WC outflow of £-12m and minimal taxes were right on target.
CapEx of @14m was E-3m higher than model.
So Cash of £71m was £1m higher than model.
Plenty of IFRS 16 noise to sink one’s teeth in. But overall a very strong set of results.
The call is a 3pm: +44 (0) 2030 576 571.
Wolfgang