Arsenal manager Arsene Wenger has claimed that he is "optimistic" that winger Theo Walcott will finalise a new contract at the Emirates by the end of January.

The 23-year-old has so far delayed putting pen to paper on fresh terms but the French boss has revealed that discussions are progressing "smoothly".

"We are on a good road but in this situation as long as nothing is signed you are cautious, but I am optimistic we will get to a happy conclusion," Wenger said in a press conference.

"I was optimistic last week but I am a bit more optimistic this week. Discussions progress smoothly but slowly."

When asked if he expects a new contract to be signed by the end of this month, Wenger said: "Yes."

Walcott's current deal expires at the end of the season.