Toy chain The Entertainer suffered a fall in profits last year as it invested in the business.

Pre-tax profits fell from £1.4m to £1m in the year to January 29 as the retailer incurred costs after opening a new distribution centre.

However, like-for-likes in the year were up 1.2%, while turnover increased 8.4% to £71m. Since year end, like-for-like growth has strengthened, rising 1.6%.

The Entertainer managing director Gary Grant said the £1m profit was ahead of expectations.

He said: “We relocated our warehouse in the year from Amersham to Swindon. It’s three times bigger to accommodate 100 stores. We incurred costs and had actually budgeted to make £750,000 profit.”

Grant also said the VAT rise in January 2010 had a “marginal” impact on profit as the retailer absorbed some of the rise.

Grant said that he was pleased with the sales growth in the year, particularly in light of the snow that hit sales last Christmas. “It had a severe impact on our online sales. We would have had double-digit growth if it hadn’t been for the snow,” said Grant.Grant was confident for this crucial festive season: “We’ve got the best range of toys in the market.”

The 59-store retailer opened eight new shops in the year, and rebadged 30, which Grant said has had a positive impact on sales.

The Entertainer will open 12 shops this year, in locations including Bluewater and Metrocentre, as well as a smaller concept store in Bromley.

It will cover 1,800 sq ft compared with the usual 3,000 sq ft and offer 2,000 SKUs rather than 4,000. Grant said the subsequent reduced property costs were appealing.