JJB Sports, the sportswear retailer, said trading over the Christmas period was in line with expectations, as strong demand for replica shirts lifted like-for-like sales by 5.4 per cent.

Shares in the Wigan-based company gained 4p to 233p on the news, which prompted brokers to raise their profit forecasts for the year.

The company said a significant improvement in business at its retail stores helped it to a 6.3 per cent increase in like-for-like sales in the 22 weeks to December 31.

Total turnover in the period was up 6 per cent, although this slowed to 4.5 per cent in the last five weeks and margins at its retail stores and health clubs increased by 170 basis points.

The group, which has over 430 stores selling sports clothing, replica kits, bikes and golf equipment, said the biggest increase in profits came from its replica shirts division, with the major Premiership clubs and Glasgow Rangers being the most popular.

"I am pleased with JJB’s trading performance throughout the current accounting period, including around Christmas and New Year," said Roger Lane-Smith, chairman of JJB.

The company also played down talk of a takeover bid from Permira, with Tom Knight, chief executive, saying it was "news to me".

The group added that it would have been obliged to put out a statement if it had been approached, in line with takeover rules.

UBS, JJB’s house broker, is understood to have raised its profit forecast for the year to £40 million from £37.5 million previously, while Seymour Pierce is lifting its prediction to £40 million, up from £38 million.

Richard Ratner, at Seymour, said: "We remain sceptical about a bid but underlying performance is better than expected."

JJB said it would continue to roll out its health clubs and expand its combined health club and large retail store format.

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