In the six months to September, turnover increased year-on-year from £85.5m to £95.5m.

Profit before tax and exceptional items rose 18 per cent to £759,000. Profit before tax after exceptional items soared even further to £3.9m from £829,000, buoyed by a repayment for overpaid VAT.

Brian Carte, Caffyns chairman, said the company was halfway into its three-year recovery programme and that while the results were “encouraging” trading in the future would remain challenging. “Pressures on margins caused by external economic and competitive factors continue to restrict improvements in profits,” said Carte. “Recent announcements on the rate of inflation, together with indications that house prices have levelled off and are now possibly falling, will continue to influence retail demand in the short term.”