Clothing and home furnishings retailer Laura Ashley yesterday reported a 113 per cent increase in first-half pre-tax profit to £6.4 million, compared with £3 million in the same period last year.

The retailer, which has outlets across the West Midlands, also forecast further growth in profitability during the second half.

However, excluding exceptional gains, including a large pension credit, pre-tax profit was actually £4 million, representing a more modest growth of 33 per cent. Improvements to its store portfolio were highlighted as a major factor in profit growth, while new openings also helped boost sales 6.9 per cent to £113.9 million.

The UK business is split into four main categories: home accessories forming 29 per cent, furniture 27 per cent, decorating 25 per cent and fashion 19 per cent.

UK retail sales increased 9.3 per cent to £89.2 million, with rises in home accessories, decorating and fashion.

However, it said that like-for-like sales, excluding the impact of its store improvement programme, were down by 3.9 per cent after flat furniture sales during tougher economic conditions on the high street.

Over the period, UK selling space increased eight per cent to 672,000 sq ft with 13 new stores opened, bringing the total to 196, up from 178 a year ago.

The group said the strong performance had been maintained into the second half with sales up by 4.5 per cent, although the ongoing store programme continued to impact like-for-like sales as moves to bigger sites resulted in more than one store open in certain areas.

It added that while retail conditions are set to remain tough, it believed that improvements to its stores and products, combined with increased operational efficiency, should lead to further growth in profitability during the remainder of the year.

Furniture sales, which account for 27 per cent of the business, were impacted as consumers held off buying "big ticket" items amid rising interest rates and a downturn in consumer confidence.

However, new ranges at the division, including the curved Collinton chair and extensions to its Devon bedroom range, helped boost performance.

Home accessories saw sales growth of 8.7 per cent on the back of price cuts on its bedding ranges, while also benefiting from strong gift, room fragrances, storage and mirrored

jewellery boxes sales. The division was also buoyed by an improvement in margins after a cut in promotions.

Linen and knitted dresses helped lift fashion sales, while improvements to styling led to higher trouser sales.

The group's fashion division has benefited from the conversion of home only stores into mixed product sites, while reduced levels of discounting and tighter stock control saw a pick-up in margins.

Printed wallpaper and silk curtains boosted decorating sales, which now account for 25 per cent of the company's revenues.

Franchising revenues continued to suffer from declining sales in the Middle East, falling by £200,000 to £9.6 million. There are currently 206 franchised stores in 28 countries worldwide.

Chairman KP Khoosaid: "Trading conditions on the high street, this year, have been difficult and we are not immune.

"We are, however, committed to continue our focus on store realignment, improved product offering and increased operational efficiency.

The interim dividend was maintained at 0.5p.