Mothercare halved annual losses and said it boosted same store sales for the first time in five years as the babywear retailer begins to see the results of its turnaround plan.

The company, which also owns the Early Learning Centre brand, said like-for-like sales at its UK stores grew by two per cent in the year to March 28, compared with a 1.9 per cent fall 12 months ago.

It said it is making progress as it cuts stores, reduces discounting, introduces more contemporary stock and upgrades its remaining estate. Shares lifted more than four per cent.

The business said group underlying pre-tax profits jumped 37 per cent to £13 million, while its pre-tax losses narrowed to £13.1m, from £26.3m a year ago.

In the UK total sales slipped just under one per cent to £458.1m as it closed 31 underperforming outlets over the period to end the year with 189 stores.

As part of its modernisation plans it said it has converted or refurbished stores in Solihull, Gateshead, Peckham, Woolwich, Surrey Quays, Cheltenham and Livingston, West Lothian.

Its new look gives stores digital screens and video walls, iPads, customer wi-fi and click and collect enhancements.

It has also introduced new clothing ranges to go alongside its own Little Bird and Baby K brands, such as items from Converse Baby, French Connection, Joules and Mamas & Papas.

The business said it will refurbish between 35 and 40 stores next year and close 25 to 30 underperforming shops.

Mothercare has had a busy year, appointing new boss Mark Newton-Jones in July, fighting off a £266m takeover approach from US rival Destination Maternity in the same month, and raising £100m from shareholders in October.

Mr Newton-Jones said: "This has been an extremely busy year for Mothercare. During the year we have completed a successful refinancing and we have created a new strategy with our customers in mind to modernise and reinvigorate the Mothercare and Early Learning Centre brands."

Peel Hunt analyst John Stevenson said: "Retail disciplines are improving, with Mothercare now looking capable of lifting gross margin for the first time in eight years."

The broker lifted its 2016 pre-tax profit forecast for the retailer by around 10 per cent to £22.5m.