Shares in Shoe Zone increased by over 17% after the retailer reported that its cash and equivalents are set to be £7m ahead of its previous budget.

The firm said this increase was due to continued positive trading throughout July.

The footwear retailer had reported earlier this year that it had faced challenging trading conditions in Q1, due to a “continued weakening in consumer confidence”, following the government’s last two Budget announcements, and geopolitical issues in the Middle East.

As a result, it said it is set to record a loss of £1m in the current financial year.

While it has reiterated these profit expectations, it does not expect it to reach above a loss £1m in the year to 3 October.

The latest increase in its share price follows a 50% drop in the 12 months to 22 April, when Shoe Zone announced its initial full-year expectations.

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