HMV, the music and book retailer, has unveiled better-than-hoped profits in its first six months as a public company and healthy Christmas sales.

The group, which runs the HMV music chain and Waterstones book store, listed on the London stock market in May. It said the six months to 26 October had seen profits jump to �6m against a loss of almost �16m in the same period a year earlier.

Despite an uncertain consumer outlook...I am optimistic about the group's future growth Alan Giles, HMV chief executive

The group's Christmas performance also hit the right note, with sales in stores open for at least a year up 4.6% on the festive period in 2001.

"Following a successful Christmas, when every one of the group's businesses performed well, we are on track to meet our financial targets," said chief executive Alan Giles.

Future harmony?

Analysts had predicted a rise in Christmas sales of around 3% for HMV, after the group reported unspectacular sales when it updated the market in October.

It shares listed at 192p in May but fell sharply in the subsequent months amid news of poor trading. They rose 7% to 123p on the back of their latest update.

We are not selling furniture or wide-screen televisions......I think we would be relatively protected in a downturn Alan Giles

Mr Giles said that "despite an uncertain consumer outlook" he was "optimistic about the group's future growth" .

Waterstones showed a turnaround in performance with sales in stores open for a year or more up 5.6% in the five weeks to 4 January.

Mr Giles said "rapidly growing DVD software markets" had also boosted sales in HMV.

Best-sellers

HMV said best-selling CDs from artists such as Robbie Williams, Blue and the Red Hot Chilli Peppers had all fuelled Christmas sales while popular DVD titles included Minority Report, Lord of the Rings and The Office.

Mr Giles was also confident in the event of any slowing of consumer spending.

"We are not selling furniture or wide-screen televisions, the things we sell cost �10 to �15 so I think we would be relatively protected in a downturn."

The group was formed four years ago when EMI spun off HMV and Dillons, and the Waterstones chain then bought from WH Smith.

It now operates a total of 542 stores, including 155 HMV shops in the UK & Ireland and 197 Waterstones outlets.