Boots has been battling against competition from supermarkets

The group has been trying to turn its fortunes around in the face of supermarket competition, a UK retail sales slump and a major restructuring.

Year-on-year sales at core Boots The Chemist pharmacies were up by 2.4%, as it continues with its price-cutting and store revamp programme.

Chief executive Richard Baker warned that "trading remained tough".

The company had announced a profits warning in March.

Mr Baker said a competitive environment and the High Street spending slowdown meant the business turnaround had not been easy - although the early signs were "encouraging".

As part of its restructuring programme, it has spent �390m on improving its stores and has cut 2,000 jobs.

'More competitive'

"Over the past year, we have made a number of price cuts," chief executive Richard Baker told BBC Radio 4's Today programme.

"We are substantially more competitive than we were two years ago."

Boots is picking up the bill for a major mistake it made a few years ago when they pushed up prices Richard Perks, Mintel Check Boots' share price

He said that over the past year Boots had made substantial investments in the business and cut 2,000 prices by 14% under a programme called Lower Prices You'll Love.

Mr Baker also said Boots had invested �200m in the programme over the two years since its inception.

He expected sales growth to fall back to between 0% and 2% in the current financial year, as announced in April.

"Boots is picking up the bill for a major mistake it made a few years ago when they pushed up prices," said Richard Perks, retail analyst at Mintel.

"The profits came through but people started walking away."

Shares in the retailer closed 13.5 pence, or 2.0%, higher at 610.5p.