LONDON (Reuters) - British discount retailer Poundland (>> Poundland Group PLC) posted a jump in profits, paid a maiden dividend and is expanding aggressively, illustrating the changing face of a sector that has seen giants Tesco (>> Tesco PLC) and Sainsbury's (>> J Sainsbury plc) cut payouts and store plans.

Discounters are growing in popularity in Britain even though the economy has improved, as habits formed in the downturn stick. Discount grocers Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] grew sales by 26 percent and 17 percent over the last three months, according to data published last week.

Poundland, which sells all its products at the single price of 1 pound ($1.58), floated its shares on the London Stock Exchange at 300 pence in March.

On Thursday they were up 8.8 pence, or 2.8 percent, at 319.2 pence at 1100 GMT, valuing the business at 786 million pounds.

Poundland posted a 34.2 percent rise in profit before tax and one off items to 12.6 million pounds in the six months to Sept. 28, beating analysts' forecasts, on sales up 15 percent to 528.2 million pounds and up 4.7 percent at stores open over a year.

CEO Jim McCarthy told reporters that 22 percent of Poundland's customers are now from the more affluent "AB" demographic.

"We're a central pillar now of the discount market in a fast changing retail environment," he said. "To be covered by Vogue (on a new make-up range) I think is a bit of a landmark."

Poundland is paying a maiden interim dividend of 1.5 pence a share. Last month Tesco slashed its payout by 75 percent, while earlier this month Sainsbury's signalled a lower full-year dividend. Both have cut their capital expenditure plans for new stores.

Poundland grew its UK and Ireland store base to 556 in the first half, opening a net 28 new stores. It sees scope for 1,000.

The firm is also trialling stores in Spain under the Dealz name. It has four and plans 10 by the end of the 2015-16 year.

Though Poundland's full-year outcome is dependent on a successful third quarter, which contributes 60 percent of annual profit, it is confident about Christmas prospects.

"The feedback we’ve had on the ranges is very strong and so far the take-up from customers has been good," added McCarthy.

(Reporting by James Davey; Editing by Paul Sandle and Vincent Baby)

By James Davey

Stocks treated in this article : Tesco PLC, J Sainsbury plc, Poundland Group PLC