Matalan has reported like-for-like growth of 4.5 per cent across the year to February 28, ending a year in which the business met its goal of a return to ‘sustainable’ growth. Across the year, the business saw total growth of 12.6 per cent, with sales volumes up 8.1 per cent. As deflation continues to have an impact across the clothing sector, average selling price decreased by 3.6 per cent.

The figures show strong growth over the year February 2004, when Matalan saw total growth of just 2.3 per cent, with a like-for-like decline of 6.5 per cent. The group said sales across the year had shown “encouraging progress”, helped by an earlier launch of the spring/summer season, estimated to have boosted like-for-likes by 0.5 per cent. Residual stocks have also been much more closely managed, allowing them to be cleared “without the need for distress markdowns”.

Gross margin across the second half will be up by around 3.5 per cent year-on-year thanks to significantly lower markdowns, and up around 1.5 per cent across the year. Matalan said its expectations for the year are unchanged, with results likely to be in line with City forecasts of around £84m. The group is continuing the due diligence process on the planned sale of its Lee Cooper brand.

Chief executive John King said: “This year has been about returning the business to sustainable like-for-like growth, and we have delivered on that objective. Matalan is now on track to deliver profits for the year to February that are in line with analysts’ expectations.”