M&S is looking to the crucial Christmas period
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Marks and Spencer has seen profit rise before tax and exceptional items, up 19.6% at £308.2m, from £257.8m.
M&S, which saw sales fall by 5.4% in the first quarter but rise by 1.3% in the second quarter, warned the trading environment remained "difficult".
It said it was looking ahead to the "important Christmas trading period" and would deliver "quality and value".
Overall, UK sales were down by 0.2%, but international sales rose 8.6% to £348.5m.
M&S said designer George Davies, who announced last month he would leave the company's Per Una division, will stay on and become chairman of the fashion unit next July.
Stock management
The company has been selling more items at full price, and has also streamlined its supply chain and stock management so that it has less unsold items in its store rooms.
It has also been squeezing the price suppliers get for food and goods.
Last month M&S reported its first quarterly sales rise in two years, following new ranges and a store revamp under a revival plan launched by chief executive Stuart Rose, appointed in May 2004.
The new figures are a further reflection of the measures introduced by Mr Rose.
"We have tightened up our costs," Mr Rose told BBC Radio Four's Today programme.
"The improving trend on sales is very encouraging."
But he warned it was "not a recovery yet" and that it is "difficult out there".
Mr Rose said the company had a large market share and was a solidly run business. Overall, sales rose by 0.6% to £3.65bn in the 26 weeks to 1 October.
Analyst Simon Irwin of JP Morgan said it was a good performance in light of the current weak High Street trading climate.
"In terms of what they've produced over the year it's pretty impressive and the improvement in margins is pretty credible at the moment," he said.
New directors
M&S also announced the appointment of Steven Sharp to the board as executive director for marketing, e-commerce, store design and development.
The firm said it is to accelerate its store modernisation programme next year, as part of its continuing recovery push, with Mr Sharp set to play a major role in that.
Mr Rose said that £500m of capital expenditure had been set aside to pay for the refurbishment, already under way, of its 416 stores.
"Our first priority has been to get the product right, then to get the stores refurbished," said Mr Rose.
Two additional non-executive directors - Lady Patten and Jeremy Darroch - are also to join in February 2006.
Last year, retail entrepreneur Philip Green offered 400p a share for M&S before he dropped his £9.1bn attempted takeover.
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Our first priority has been to get the product right, then to get the stores refurbished
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