Discount fashion retailer Matalan, which has a shop in West Swindon, posted a surge in profits as shoppers seeking out bargains helped drive up demand.

Underlying sales in the year to February 23 climbed 7.2 per cent, helping turnover jump 45 per cent to £847.4 million.

Chairman John Hargreaves said the group had opened 20 new stores during the year and extended 10.

But he added that the group's outstanding value-for-money policy had also driven demand, and pre-tax profits soared past the £100 million mark, gaining 30 per cent to £107.6 million.

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

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

Matalan also updated the City on current trading, and said like-for-like sales in the first nine weeks of the year were up 7.2 per cent.

Gross margins were also slightly ahead on improved sourcing and buying, the group added.

Mr Hargreaves said: "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 period ending March 1, 2003."

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 £100m.