FRESH from expelling its Athena card and poster business from the

group, Pentos yesterday reported that sales in the second half of 1994

were ahead of the previous year with an encouraging final quarter for

booksellers Dillons.

Dillons' sales in comparable stores in the fourth quarter were 5.4%

ahead of the same period in the previous year. However, sales improved

markedly in the run-up to Christmas with Dillons up 8.6% helped by a

record Christmas week.

City analysts believe that Dillons could have made profits of #5m in

the second half compared with a trading loss of #13m in the first half.

In the third quarter, Dillons' sales were adversely affected by

earlier action to clear old and redundant stock. Pentos is pinning its

future growth prospects on the flagship Dillons chain, which could lead

to disposals of further businesses within the group. Bill McGrath, chief

executive of Pentos, believes that Dillons has the potential to be

''tremendously profitable''.

On Tuesday, Grant Thornton announced that the bulk of the Athena High

Street chain was to close after it failed to attract acceptable offers

for the business. It was put into administrative receivership on 28

December. However, all but one of the 30 franchised shops will continue

to trade including the four Scottish outlets.

In the fourth quarter, Athena sales, excluding sales by franchisees,

rose by 2.5%. Pentos said this result ''was below the level needed to

deliver a return to profit''.

Elsewhere in the group, the Ryman stationery chain recorded a sales

increase of 1% in the second half in a flat market where there was

significant competition. Underlying growth in stationery and service

sales was more than 5% in the fourth quarter and over 3% in the second

half.

The withdrawal from loss-making personal computer sales was offset by

stronger stationery sales. Second- half sales at Pentos Office Furniture

were 21% ahead of the previous year, after an 8% rise in the first half.

There was no mention yesterday of margins and likely profits at

Pentos. The company is currently in negotiations with its bankers about

refinancing the business.

Pentos has been attempting to restore its fortunes after the ousting

last year of founder Terry Maher. Last year, the group lost #70m and

this year City analysts expect it to lose about #45m after taking

account of the Athena closure costs.

Yesterday's trading statement saw Pentos shares dip a penny to

10[1/2]p.