UK supermarket chain and takeover target Safeway has reported a rise in quarterly sales, but said first-half profits were likely to be lower than in the year-ago period.

Safeway said like-for-like sales edged up 0.7% in the second quarter to 11 October, compared to a 0.6% decline in first-quarter like-for-like sales, reported Reuters.

"Safeway has delivered stable trading, solid results and strong cash generation," chief executive Carlos Criado-Perez was quoted by Reuters as saying.

The retailer, which is currently at the centre of a takeover battle, said its underlying pre-tax profits would be around £173m (US$294.7m) for the first half, compared to £187m in the year-ago period.