Sports Direct has insisted it is starting to see green shoots of recovery at department store House of Fraser, which it purchased from administrators for £90 million last year.

The company, controlled by retail tycoon Mike Ashley, also said a 674 million euro (£561 million) tax inquiry into unpaid VAT in Belgium is also progressing well and bosses expect a decision on 491 million euro to be made by early next year.

The revelations come as the business, which has snapped up several under-performing high street names in recent years, saw sales jump 14 per cent in the six months to October 27 to £2 billion with pre-tax profits up 160 per cent to £193.4 million.

The last six months has been relatively stable for Sports Direct, compared with previous periods.

At the company's full-year results earlier this year, publication was delayed after management clashed with auditors over the Belgian tax bill relating to House of Fraser.

But Mr Ashley said the tax authorities have written to him saying “they are satisfied that they have all the information they require from Sports Direct and that they are satisfied that VAT has been correctly accounted for in the information they have reviewed so far”.

On House of Fraser’s performance, the company insisted “green shoots of recovery” are starting to emerge.

Mr Ashley added that recent sales have held up well during Christmas, but warned: "We are doing as much as we can to realistically save as many jobs and stores as possible however, despite our best efforts, there are still a number of stores which are currently paying zero rent and that are unprofitable and thus not sustainable."

Carlisle’s House of Fraser store had been under threat of closure until Sports Direct snapped it up through a pre-pack administration process last summer.

But it was thrown a lifeline when Sports Direct said it has agreed commercial terms for the store on English Street, in the process saving around 150 jobs.

Elsewhere,

Sales in its UK sports retail business, which includes Sports Direct, Jack Wills, Game Digital, Evans Cycles and Sofa.com, rose 6.7 per cent to £1.2bn, although this growth mainly came from takeovers.

When stripped out, sales fell 8.6 per cent, with bosses saying this was due to “the continuing elevation strategy”.

Mr Ashley used the results as an opportunity to attack his rivals, regulators and politicians over some of the scandals that have unravelled at businesses where Sports Direct had been a shareholder, including Debenhams and Goals Soccer Centre.

He also demanded that restructuring advisers should be regulated, adding the sector had “become the Wild West in terms of deceit, dishonesty and self interest”.