Fox reported annual pre-tax profits up from £45.2million to £52million on sales up 11 per cent to £1.87billion at the end of the first year of a three-year transformation programme.

Games, driven by Nintendo’s Wii console and hits such as Grand Theft Auto, accounted for 21 per cent of sales at the HMV chain, helping fuel the rise.

Waterstone’s bookshops’ sales were up more than 3 per cent, aided by a loyalty card with 1.5million users.

The shares fell 17p to 112dp, partly on news of delays in changes to the Waterstone’s warehouse and distribution system.

HMV also launched a new social networking website, getcloser.com