Clothes and home furnishings retailer Laura Ashley has remained on the road to recovery, posting a 62% rise in pre-tax profits for the first six months of the year.

Supporting the rise in profits to �2.1m was a gain in sales of 11% to �131.4m.

But the company was cautious about the rest of the year, saying the prevailing weakness of the world economy meant the outlook was uncertain.

The company, which went nearly bankrupt following mismanagement and overconfidence in the 1990s but was rescued by a Malaysian company, Malayan United Industries, returned to the black last year.

Laura Ashley in 2000 recorded its first full-year profits for four years.

The group shifted its focus away from the conservative, floral-print garments which made the Laura Ashley name famous in the 1980s.

Instead, it put home furnishings to the fore.

Two-pronged showing

The performance in the first half of the year was the result of a solid showing both in women's clothing and in home furnishings, according to company chief executive Ng Kwan Cheong.

"Both give us confidence that the action we have taken to improve our ranges and increase competitiveness is beginning to take effect," Mr Ng said

Despite 11% sales increases, variability still reigned in the women's clothes market, but the improved ranges and a decision to trim margins by 2% should protect improvements, Mr Ng said.

Wary going forward

But looking ahead, things were less rosy, given the parlous state of the world economy.

The first seven weeks of the second half, to 15 September, like-for-like retail sales were up 17%.

But women's fashion sales were unmoved.

"Overall, we are encouraged by the current trading pattern," Mr Ng said.

"However, in view of present uncertain economic conditions we remain cautious about the outlook for the year as a whole."

In the City, Laura Ashley shares closed 2.25p lower at 25.75p.