HMV operates about 520 stores across the world

The retailer said sales grew by around over 3% during the all-important Christmas period at its UK and Ireland music stores and Waterstone's bookshops

Pre-tax profits grew to �10.7m ($19.69m), compared with analysts' forecasts of �6m-�9.2m.

Overseas trading also improved, with sales up 5.3% in HMV North America.

Festive cheer

New stores opened at a steady rate, with nine new outlets in the UK, seven in Japan and two in Waterstone's in the first half of the year.

HMV declared an interim dividend of 1.3p a share, up from 1p a share.

"The strong Christmas trading, coupled with pleasing performance in the first half, leaves us well placed to deliver our targets in the Group's second full financial year since flotation," said chief executive Alan Giles.

HMV makes about 90% of its profits in the second half of its financial year, which covers the Christmas trading period and ends in April.