We've got this stock problem behind us ...we've come back very strongly

George Foster T.J. Hughes Boss

The company had previously predicted a one-off charge from the flawed stock control system of about �2.8m, but upped this by a further �800,000 in Monday's results.

The company's chief executive George Foster admitted that the increase was "pretty harsh news for the market" but remained upbeat about this year's growth.

"We've got this stock difference behind us, we've got six stores to open, sales are up and we've come back very strongly," said Mr Foster.

Volatile shares

Shares in the retailer plummeted when the sizeable accounting error was discovered, falling from 320p to 206p in a single day in March.

T.J. Hughes results 2000

Pre-tax profit �4.2m Earnings per share 10.7p Sales increase 4.2% Mistaken stock pricing �3.63m

TJ Hughes was tipped as a good investment by some Sunday papers this weekend, considered to be a cheap buy.

But investors reacted negatively to the extra charges, and fell 3.5p to 151.5p in Monday trading.

Nevertheless, brokers estimate that the firm will more than recover its losses next year, with profits forecast to bounce back to �6m.

Slowdown bonus

And TJ Hughes says that it stands to gain from an economic slowdown, as shoppers move towards discount stores.

"Because we're a discount retailer and offer value for money, if people feel the pinch TJ Hughes is in the right position to do well from it," said Mr Foster.

The store has an ambitious expansion programme, launching new stores in Romford, Hull, Glasgow, Maidstone, Coventry and Kettering later this year.

If all goes to plan, it will have increased its selling space by 29% over the previous year by the Autumn.

Sales growth targets for 2001 are set for 4-5%, the same level as last year.

But sales growth in the first ten weeks of the year only reached 3.3%.