Entertainment retailer HMV has reported a rise in full-year profits, helped by strong demand for video games.
HMV said pre-tax profits had risen by 25.5% to £56.6m in the year to 26 April, not including income from its Japan business which it sold last year.
Like-for-like sales grew 7.3% across the group, rising 11.4% at HMV UK & Ireland. Its bookselling business Waterstone's saw sales rise by 3.3%.
Efforts to revitalise HMV were paying off, the company said.
In 2007, HMV began a three-year programme to turn around the business, after being hit by falling profits.
The firm - which operates 379 HMV stores worldwide and 313 Waterstone's outlets - has come up against strong competition from supermarkets and music downloads.
Chief executive Simon Fox said that one year into transformation plans, the firm was "ahead of where we expected to be".
"We still have much to do, and whilst we are mindful of the challenging economic outlook, the current financial year has started in line with our expectations and I remain confident that we are building a better and stronger business that can prosper in a rapidly-changing market," he said.
HMV also announced that following last July's sale of its Japanese business, it had ended the year "broadly debt-free".
The firm said it had clearly benefited from a strong games market - with this making up 21% of UK and Ireland sales, up from 14% the previous year.
Nintendo DS game More Brain Training topped its bestsellers chart, which also featured Fifa 08 for the Playstation 2 and the Nintendo Wii's Mario & Sonic at the Olympic Games.
HMV said it was to roll out more "next generation" stores, featuring a "social hub", entertainment websites and games zone.
It is also to start selling second-hand video games - which customers have traded in part-exchange for newer products.
"We continued to enhance our credibility with customers and suppliers in the fast-growing games console and software market," it said.
Though the firm's shares had been on a "rollercoaster ride", the market recognised "a small glimmer of hope" said Richard Hunter of Hargreaves Lansdown Stockbrokers.
"The figures are, in themselves, decent enough but the company remains embattled in its field.
"Digital downloads are firmly taking hold and, in any event, the presence of online retailers and the supermarkets is exerting severe pressure on their business model."