Paramount, owner of the Chez Gérard and Bertorelli restaurant chains, has reported a return to profitability in the year to 27 June.
Pre-tax profits came in at £1.8m, against a loss of £230,000 a year earlier.
This was despite a drop in sales from £32.86m to £31.77m as the group reduced in size from 26 to 21 restaurants.
Paramount said like-for-like sales had risen by 5.6%.
Chief executive Nick Basing said: "The strong financial performance reflects our success in turning around the business. We are now positioned to deliver a controlled growth plan."
He added that like-for-like sales in the first 11 weeks of the new financial year were ahead by 8.3%.
Better use of space within existing restaurants has been a major factor contributing to the improved performance, Paramount said.
It has converted several redundant storerooms, offices and annexes into dining areas, resulting in the addition of more than 300 new seats.
And the company claimed it had improved the quality of its food and wine by bringing in new suppliers or re-specifying contracts with existing ones.
A programme of improving the fascias of its restaurants is also underway, with the aim of pulling in more passing trade.
The flagship Chez Gérard in London's Covent Garden is being redeveloped with the addition of a new patisserie and café offering called Le Petit Chez Gérard.
Paramount is also looking for more restaurants in central London.
Said Basing: "We currently operate 15 London restaurants, which leaves a number of prime areas within the capital where we are not represented."
Outside London it is also planning selective new openings and is testing two scaled-down formats: Brasserie Chez Gérard and Caffe Bertorelli.
These have been adapted for all-day trading and need less capital investment.
A new retail format has also been developed, Deli Bertorelli. The pilot will open in London's Charlotte Street this month.
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