UK department store chain House of Fraser has announced a big rise in annual profits.

Boosted by 25% sales growth at its flagship Oxford Street store, which recently underwent a refurbishment, pre-tax profits rose to �25.6m, from �17.8m the previous year.

The profits marked the chain's best performance since 1998, but it insisted that 2002 was already showing signs of being even better.

"The economic fundamentals are good for a business like ours," deputy chief executive and finance director David Adams said.

"There is still very strong demand for brands and consumer confidence is high."

Mr Adams said he was confident that the company would meet analyst forecasts of �29m profit for 2002.

House of Fraser plans to open eight-10 stores over the next four years and will spend �50m refurbishing about a dozen stores over the next four to five years.