Laura Ashley predicts higher profits

Laura Ashley said annual profit would exceed market expectations, thanks to improved sales and margin growth. As a result, the British fashion and furnishings chain saw its shares increase by nearly 9 percent. On Tuesday the company said it expected full year profits to exceed analysts' forecasts by 10 percent. Like-for-like sales gained 8.7 percent for the 50 weeks ended 13 January, while total UK sales increased 12.5 percent during the same period.

"The sales performance of the business improved in the second half of last year, which has resulted in slightly reduced like-for-like sales reported in this announcement," Laura Ashley said in a statement. However, sales in home accessories, decorating, furniture and fashion grew across the board.

Analyst Richard Ratner of Seymour Pierce called the results "encouraging" and changed his recommendation from 'hold' to 'outperform'. He also raised his full year pre-tax profit forecast from £10.5 million to £12 million. Furthermore, the group continued its realignment plans with the opening of 17 new stores across the UK and the closure of 10 underperforming stores. Laura Ashley said the performance of the new stores had been encouraging thus far.