High Street chain Woolworths has said it had a "satisfactory" Christmas after it recorded a modest rise in sales.

In the six weeks to 11 January, like-for-like sales at the group - which strip out the effects of new store openings - grew by 1.5%, and increased by 1.2% over the half-year.

Woolworths took on thousands of extra staff and hundreds of additional cash tills in order to meet demand over the crucial Christmas period, which accounts for a about a third of the firm's annual turnover.

The company added that it anticipated a "significant" improvement in profitability this year.

Woolworths shares closed up 2 pence, or nearly 7%, at 34.25p.

'Encouraging progress'

"The potential for further improvement to the Woolworths business is clear," said chief executive Trevor Bish-Jones.

"While there is still a lot to be done, we are encouraged by the progress that has been made to date."

Underlying sales at the main Woolworths chain grew by 0.9% in the half-year to 11 January.

Sales at its Big W warehouse stores grew by 3.4% while its MVC music store chain saw sales jump by 8.6%.

Finance director Christopher Rogers said the company was "in line" with forecasts that it would report full-year profits of about �50m for the year to February.

Turnaround

Woolworths has had a tough time since it was split off from the Kingfisher retail group in August 2001.

Following the demerger, the company was saddled with about �200m in debt and �100m of unsold stock.

Poor sales forced it to abandon its Woolworths General Stores format, and it pulled out of merger talks with retail chain BHS in June last year.

While the latest figures suggested the company's fortunes have improved, analysts remained concerned that the firm could be hit by any downturn in consumer spending.

"These figures will go a long way to reassuring investors they're managing the business at the current sales level," said John Stevenson, a retail analyst at ING Financial Markets.

"But the jury's still out on where they go from here."