DISCOUNT retailer TJ Hughes, which is being taken over by JJB Sports, has posted unchanged profits after staging a second-half trading revival.

The Liverpool group's start to the financial year was rocked by a hostile takeover bid and the discovery that stock had been overvalued.

But chairman David Winterbottom said the performance improved substantially in the second half, with like-for-like sales ahead 11 per cent in the last quarter. New marketing initiatives, better stock controls and strong consumer demand drove the turnaround, the company said.

Pre-tax profits for the year to January 26 were unchanged at £4.2m following a 23 per cent increase in group turnover at £192m.

Mr Winterbottom said: "This represents a significant achievement after the distractions and disruptions of the first half."

In October, the company reported half-year pre-tax losses of £1.3m, compared with profits of £2.6m for the same period a year earlier.

Figures were damaged by the cost of defending a hostile takeover and dealing with the discovery in April of a £3.6m stock overvaluation error.

During the year, selling space increased by 29 per cent with new outlets at Romford, Hull, Maidstone, Kettering, Coventry and Glasgow.

TJ Hughes has 36 department stores, including one in Middlesbrough, but will open others in Newcastle, Scunthorpe and Redditch in this financial year.

The group had been looking for a suitable site in Darlington, but rejected the former C&A store in the town's Cornmill Centre and the Dressers site in High Row.

Mr Winterbottom said like-for-like sales were up 3.1 per cent in the eight weeks to March 24.

JJB Sports, which earlier this month unveiled a £42.3m takeover of TJ Hughes, said it sees significant growth opportunities for the group.

The Wigan company intends to maintain the TJ Hughes brand and format if the deal goes through.