Discount retailer Matalan has reported a sharp rise in profits, fuelled by 20 new stores and a 45% rise in turnover.

Pre-tax profits soared 30% to �107.6m during the year to March 2002.

"I am pleased to report that we have produced another set of record results during this period," said chairman John Hargreaves.

"These have been delivered through providing our members with outstanding value for money and through continued store expansion."

New stores

Sales in the shops that it owned a year earlier rose 7.2%.

Looking ahead, the group said it would open 20 stores and extend 10 stores this year.

"By strengthening our management team and through further stores and product development, supported by a clear marketing message, I am confident the business will continue to prosper over the 53 week period ending March 1 2003," Mr Hargreaves added.

'Best kept secret'

Chief executive Paul Mason said the full-year figures were in line with forecasts as well as being the first time profits came in above �100 million.

The group, based in Skelmersdale, West Lancashire, plans to increase its advertising across television, the press and local radio.

Mr Mason said: "This business is the best kept secret in British retail and there are still areas of the county with low experience of what the brand is about."

Matalan will also target its membership directly - the group is classified as a members' club and customers must join if they want to shop at any of the stores.

Matalan currently has 8.2m members, up on the 6.3m it had a year ago.

Struggling shares

Shares in Matalan closed nearly 7% higher at 376.75p on Wednesday.

But the stock is still below its November 2000 peak of 800p.

"The current trading is better than expected," said Credit Suisse First Boston retail analyst Tony Shiret.

"The shares are not expensive but I think they will struggle to make headway after the disappointments last year."