John Lewis Partnership today reported “strong” half-year results after its department stores and supermarkets continued to grow market share.

The employee-owned partnership, which has 39 John Lewis shops and 294 Waitrose supermarkets, including a joint Waitrose and John Lewis at home store in Ipswich, racked up £4.7billion in sales in the six months to July 27, an increase of 7% despite comparisons with strong trading last summer.

Underlying profits were 4% higher at £115.8million, although a payment of £40m to staff following the miscalculation of holiday pay over the last seven years meant bottom-line profits fell 38.5% to £68.5m.

Partnership chairman Sir Charlie Mayfield said trading conditions were showing signs of improvement and that John Lewis and Waitrose had grown sales “well ahead” of their respective markets during a strong first half.

He added: “Looking ahead, I’m encouraged by progress this year and am confident of the plans we have in place for Christmas.

“Despite a strong second half last year, both during the Olympics and at Christmas, I expect us to trade positively in the second half.”

In the first six weeks of the second half, John Lewis sales rose by 5.1% on a like-for-like basis, while Waitrose was 4.4% higher.

The partnership said Waitrose had outperformed the sector for more than four years and that its market share stood at 4.9%, 0.3% higher than a year ago. Its sales in the first half rose by 7.8% to £3bn, or 6.9% on a like-for-like sales basis, as operating profits climbed 12.8% to £160.2m.

Department store profits grew bu 10% to £50.1m after sales growth of 6.6% to £1.71bn, an increase of 5.1% on a same-store basis.

Investment costs of £53.2m, including in store refurbishments and IT, meant the division’s overall profits fell 24% to £34.7m.

In March, the business announced that employees would receive 17% of their salary as part of an annual bonus, equivalent to nearly nine weeks pay.

The business created a net figure of 800 new jobs during the first half, taking its headcount to around 85,500 staff.