FASHION and home furnishings group Laura Ashley has bounced back after years of losses to post a £10.2m profit.

The group, which was on the brink of collapse two years ago, had last recorded a full-year pre-tax profit in 1997.

The profit figures, for the year to January 27, compare to a £4.1m loss the previous year.

Chief executive Ng Kwan Cheong, the Malaysian boss who has driven the turnaround, said: "This year has been an important one for the group as we have now returned to profitability and have put in place a platform for future development."

He said the group was "cautiously optimistic" that it could continue to deliver a solid performance this year.

Turnover had also improved - rising from £247.3m to £259.1m.

Sales of its home furnishings leapt ahead, with like-for-like sales rising 20 per cent, while it said it had improved its clothing ranges, bringing them more in line with target customers' expectations.

Response to its spring range had been "very encouraging" with jewellery, shoes and handbags being snapped up.

Laura Ashley said this financial year had started well, with like-for-like sales up 14 per cent in the first nine weeks.

The City cheered the figures and shares rose nine per cent in early trading.

Mr Ng's success in rejuvenating Laura Ashley followed a turbulent time for the firm.

The group, which was founded in the 1950s by Laura and her husband Bernard Ashley, was a hit in the 1970s and 1980s, with its traditional English floral style.

But the 1990s saw problems emerge, following a number of poor management decisions and a succession of chief executives.

Mr Ng took charge in February 1999, becoming the group's seventh boss in a decade.