DISCOUNT retailer Matalan has reported another profits surge, but added that sales growth had slowed in recent weeks.

Pre-tax profits in the 26 weeks to August 25 rose 41 per cent to £49.4m following like-for-like sales growth of 10.1 per cent.

However, that figure dipped to 5.2 per cent in the nine weeks to last Saturday, while gross margins have also been lower because of a higher proportion of homeware sales and changes to the promotional calendar.

John Hargreaves, chairman, believed the outlook for the remainder of the year was still positive.

He said: "In the longer term Matalan is well placed in the market as a result of its outstanding value for money proposition."

Matalan, based in West Lancashire, is one of the country's fastest growing retailers after a rapid increase in profit levels and store numbers