Laura Ashley's profits on the rise

Home furnishings chain Laura Ashley yesterday forecast better-than-expected profits despite the impact of Arctic weather and the sluggish economy.

The group, which has 221 stores in the UK and Ireland, said like-for-like sales were up by 2.7 per cent in the 19 weeks to 11 December, which is a slowdown from the 6.2 per cent growth in the first half-year to 31 July.

Laura Ashley blamed factors outside its control for the weaker sales trend but said efforts to streamline its estate, including the closure of 12 of its less profitable stores and the opening of two new sites, had boosted margins.

The company added: "Despite the current economic uncertainty and adverse weather conditions in the UK, we remain confident that full-year trading will be ahead of the board's expectations."

Laura Ashley, which also sells fashion, decorating and furniture products, reported growth of 28.7 per cent in internet sales in the 19 week period.

The shares were given a boost after Numis Securities raised its profits forecast from 14.4 million to 15.8m for the year to the end of January. The company recently reported profits before tax and exceptionals of 10.5m in the first half of its year, up from 1.1m a year earlier.

The retailer opened its first gift and accessories store at London's Liverpool Street station last July and plans to roll the concept out to other locations this year.

Laura Ashley made 7 per cent of its sales from the internet last year.

It has improved the website, increased the product offer and launched an iPhone application as part of plans to expand online.