The UK discount clothes retailer Matalan has announced a sharp increase in earnings for the first six months of the year.

Pre-tax profit was up 72% to �35m, with like-for-like sales rising 33%.

Chairman John Hargreaves said: "The business has continued to grow strongly in the first half of this year, driven by strong like-for-like sales and sales from new, extended and re-sited stores.

"In addition, margins have continued to improve resulting in substantially higher pre-tax profits and earnings per share compared to last year."

Turnover increased 58% to �256.3m in the period.

Fastest growing

Matalan is now the UK's sixth largest clothing retailer - up from 10th last year - and the fastest growing in terms of sales.

The chain plans to open 16 new stores in the second half of the year.

Three extensions and four re-sites will provide a further 87,000 square feet of space, Matalan said.

Total space growth for the year will be 41.5%.

"The outlook for the remainder of the year is positive in terms of our sales performance and continued growth in our membership, with additional TV advertising compared to last year," Mr Hargreaves said.

Credit card initiative

"Over the longer term we are confident that development of our home selection, e-commerce and personal finance initiatives, whilst only at a trial stage, will lead to further growth."

Matalan's credit card - a joint venture with National Australia Group Europe - will be trialled soon.

A personal loans trial will be launched in January 2001.

Matalan was floated on the stock market in 1998 at 235 pence a share - equivalent to 47p following a four-for-one bonus share issue in February.

The share closed at 650p on Tuesday and put on a further 7p in the first five minutes of trading on Wednesday.