Renowned toy shop Hamleys, a familiar name to the millions of families who visit the capital, today showed it had just scraped a profit during the last half year.

This is despite a "depressed" toy market and fewer tourists.

The group, which has seen intense speculation this year over its future after takeover talks collapsed in July, said pre-tax profits had come in at £9,000 for the 26 weeks to September 23, against a £2.6 million loss last time.

Hamleys said the profits improvement had come in spite of disruption at its flagship store in Regent Street, London, which for five weeks was without escalators.

The number of overseas visitors to London this summer was well below last year, Hamleys added.

The toy shop said it had managed to boost profits by improving margins and cutting operating costs.

It said like-for-like sales were unchanged across the group and turnover came in at £16.6 million, against £17 million last time.

The improvement comes after a tough period for the group, which in June - after issuing four profit warnings in two years - revealed it had received a takeover approach.

But just a week later, the toy retailer saw its shares plummet after it said takeover talks had ended.

Although the identity of the predator was never confirmed by Hamleys, it was widely understood to be Charterhouse Development Capital.

Hamleys today warned that future trading in the retailing climate remained difficult.

A spokesman said: "Not least in the toy market, and against this background, achieving a strong Christmas result is a significant challenge".

But he said the business "continued to trade steadily".