Hard-up shoppers on the lookout for a bargain have helped Poundland to a 47 per cent surge in annual profits.

The retailer - which sells everything for £1 - made £11.8 million in the 12 months to the end of March, up from £8 million the previous year.

Bosses capitalised on the economic downturn by opening 41 new stores. They plan to continue the expansion at a similar rate, with 250 outlets forecast by the end of 2009.

Chief executive Jim McCarthy said: "Consumers are having a tough time at the moment. Having a single price strategy is a big benefit, as it means they can budget easily as they shop."

The company, based in Willenhall in the West Midlands, employs more than 6,500 staff and currently has 212 stores nationwide. It plans to recruit an additional 1,200 employees.

The firm has also benefited from the collapse of its high street rival Woolworths.

"We have helped to mitigate some of the Woolworths closures this year, taking on 150 ex-Woolworth's staff and plan to open a significant number of ex-Woolworths retail units during the coming year," Mr McCarthy added.

Poundland opened its first store in Burton-upon-Trent in 1990. Since 2002, the firm has been owned by the private equity firm Advent International.

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