Arcadia, the Topshop-to-Bhs British retail group owned by the family of billionaire Philip Green, posted a 25% rise in underlying year profit as a drive to increase efficiency boosted margins.

The group also said that sales at stores open over a year, including VAT sales tax, were up 0.7% in the first ten weeks of its new financial year.

It owns the Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans brands.

Arcadia made a pre-tax profit before one-off items of £166.9m in the year to 25 August, up from £133.1m last year when they had fallen 38%.

Arcadia's total sales from about 2,500 UK stores and 615 franchised outlets in 39 countries were flat at £2.68bn, while like-for-like sales were down 0.7% and down 3.2% in the UK.

However, margins rose 1.2% points.

Mr Green said the group's focus in 2013 would be to drive expansion in the United States and its international on-line business.

E-commerce sales rose 22% in the 2011-12 year.

Arcadia, which generated cash of £330.4m during the year and ended the period with bank debt of £308.9m, said trading conditions "remain challenging".

However for the seventh year running Mr Green, whose family ranked 17th on the 2012 Sunday Times UK rich list with an estimated fortune of £3.3bn, did not pay himself a dividend.

In 2005 Mr Green geared up the business to pay his family a £1.2bn dividend.