The revival of Morrisons is continuing, thanks to record pre-Christmas sales.

The Bradford chain said the last week of trading before Christmas gave it a much-needed lift following "muted" business earlier in December.

It made sure like-for-like sales at Morrisons stores which have been open a year or more were six per cent higher in the six-week Christmas and New Year period than 12 months earlier.

A Morrisons spokesman said: "While trading in the run-up to Christmas was muted, the week immediately prior to Christmas saw a record performance."

The performance helped Morrisons sustain the thrust of the first half of 2006 when it sprang back from its £3 billion takeover of rival Safeway.

Morrisons said like-for-like sales were up 6.3 per cent for the 49 weeks to January 7, having grown 6.6 per cent in the first half, adding that performance since the interim results was better than expected.

"These sales results are slightly ahead of our expectations at the time of our interim results," said chief executive Marc Bolland.

"However, the group is in the early stage of its profits recovery and the trading environment remains highly competitive.

"The start of the year has been more competitive than ever before and I expect that will continue in the coming months," he said.

The company, founded as an egg and butter stall by Sir Ken Morrison's father, William, posted the first loss of its 107-year history last year as the problematic integration of Safeway took its toll.

But it recovered in the first half of last year, with better than expected pre-tax profits of £134.2 million for the 25 weeks to July 23.

City analysts are forecasting full-year profits to be around £289 million but Rob Mann, of Collins Stewart stockbrokers, said he expected figures to be upgraded. "On balance we would expect consensus for 2007 to move upwards," he said.

"Our existing forecast for the current year is £312 million, towards the top of the range, and we would expect market numbers to gather in that region."

Shares in Morrisons jumped more than four per cent to an all-time high yesterday. But Panmure Gordon analyst Philip Dorgan warned that "shares have run too far ahead of themselves" given his conservative outlook for profits.

e-mail: jonathan.walton@bradford.newsquest.co.uk