The group, which runs the HMV music and games stores as well as the Waterstone's book chain, said its turnaround plan was ahead of schedule as same-store sales growth at its UK and Ireland HMV stores was even further ahead at 11.4 per cent.

Total group sales in the 12 months to April 28 were up 10.3 per cent on the year before, with a 4.7 per cent improvement for Waterstone's.

In a trading update, the management was confident that underlying pre-tax profits for the year would be towards the upper end of expectations.

In the previous year, the group – which operates around 700 stores in the UK and Ireland – saw like-for-like sales dip 3.5 per cent as sales struggled amid tough high street and competition and growing digital sales.

Chief executive Simon Fox launched a revival plan at the beginning of 2007, which included store revamps, a focus on big-selling games and consoles, and a digital music and online push.

He said yesterday: "As we complete the first full year of our three-year turnaround plan, we are ahead of where we expected to be."