Poundworld has announced a 34% drop in pre-tax profits to £1.9m, blaming events such as the Queen’s Diamond Jubilee and London 2012 for keeping shoppers away from the high street.

Total sales increased 42% to £294m in the year to 31 March 2013, according to accounts filed at Companies House.

The single price discounter opened 46 new stores during the period, which MD Chris Edwards admitted had also hit profits.

It is the second year in a row that profits have fallen at the discount retail chain. Profits fell 28% to £2.8m the year before.

Edwards maintained Poundworld was moving in the right direction and said the business had started the new financial year strongly, with like-for-like sales consistently above 4% over the last six months.

“The start to the current financial year has been very positive and there are signs that consumer confidence is returning to the high street,” he said.

“Major developments to the IT infrastructure, positive cost-saving exercises, plus investment to personnel in the Far East and in the UK have all been part of the advances we’ve made during the financial year. We will see this investment really come to fruition and benefit our operations in 2014.”

In November, The Grocer revealed Poundworld was set to rebrand its entire DiscountUK portfolio to ‘Bargain Buys’ in an attempt to compete more closely with rivals such as Home Bargains and B&M Bargains.

It plans to open 20 new Bargain Buys stores this year and will finish rebranding all 35 DiscountUK stores over the next six months.

It will also open a further 50 Poundworld stores in 2014, bringing its total estate to more than 290 stores.