Upmarket fashion and handbag retailer OrotonGroup Ltd (ASX:ORL) has booked a 24% rise in profit to $15.4 million for the six months to January 23, 2010.

Despite the result, which reflects a 9.8% rise in group revenue to $81.6 million, the company is expecting a challenging second half.

CEO Sally Macdonald says the positive result was achieved in what was generally considered to be a competitive retail climate.

Ms Macdonald says that while trading has remained robust, she expects it to struggle in the clothing market in the second half.

Earnings before interest, tax, depreciation and amortisation increased 21.8% to $24.5 million.

The company says its focus on cost management continued to drive expenses down to 41.8% of revenue in the first half of 2010, compared to 46.1% in the first half of 2009.

Strong cash flows were maintained, with OrotonGroup reporting an operating cash flow of $17.9 million for the period.

The board has declared an interim fully franked dividend of 22 cents a share.

OrotonGroup posted a profit of $19.44 million for the 12 months to July 30, 2009.