Discount retail chain Matalan failed to meet the high expectations of the City despite notching up strong sales and announcing further shop openings.

Shares in the group, which has a branch in the John Allen Centre, Cowley, Oxford, slipped after a trading statement that showed pre-tax profits set for the lower end of market forecasts.

Matalan said the figure for the year to February 24 would be no less than £82m, a significant improvement on £54.1m last time.

The City, however, has pencilled in a profit line of £82.8m for full-year figures to be announced on May 9.

Matalan, based at Skelmersdale, Lancashire, has become the darling of the London Stock Exchange over the past year after consistent growth in profits and store numbers.

It confirmed it would open a further 19 outlets and bring its tally of out-of-town stores to 142 by February 2002.

Analyst David Liston, of stockbroker Gerrard, believes Matalan's share dive was caused by its own recent success. But he said the company remained one of the sector's strongest performers, bettering most discount and mass-market operators.