The retailer, which sells household goods, confectionery, and CDs, had lost �34.9m in the first half of 2003.

First-half sales rose to �1.1bn and the firm said it was well placed to deliver an improved performance over the key Christmas trading period.

Chief executive Trevor Bish-Jones said the firm had "continued to make progress" in the first six months.

This was down to "better systems, better buying and cost control underpinning the improvement in our margins", he said.

"We are well placed to continue to deliver an improved performance over the key Christmas trading period and have a successful store investment programme in place which will drive growth in the business over the medium term."