The famous British toy store Hamleys has reported better-than-expected results, helped by its new teddy bear business, The Bear Factory.

The group's sales rose 9.3% over the year, with its famous store in London's Regent Street also putting in a good performance.

Operating profits before one-off items rose 4% to �4.9m.

But pre-tax profits slipped to �3.7m from �3.9m in 2001, after Hamleys absorbed the cost of closing down the discount retailer Toystack.

Hamleys' chairman Simon Burke said the company has now completed its restructuring programme.

"We can now focus on building growth in our core businesses, Hamleys and Bear Factory, " he said in a statement.

The Bear Factory, which began just over 18 months, made profits of �2.9m during the year, and Hamleys is now looking to expand the chain overseas.