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Halfords gets a boost from Brits on bikes

HALFORDS, the car maintenance and bicycle retailer, yesterday reported a 2.4 per cent rise in full-year profits to &pound;92.4m as the demand for bikes and camping equipment surges in the downturn.<br /><br />Finance director Nick Waller said: &ldquo;The demand for bikes is sustainable, people are using cycling to beat congestion, for economic reasons and increasingly to help the environment.&rdquo;<br /><br />Halfords currently sells 1m bikes a year, equivalent to one in three bikes in the UK.<br /><br />However, the group yesterday posted its first fall in revenues in 20 years, largely due to softening demand for in-car satellite navigation systems. <br /><br />The group reported a 0.3 per cent drop in revenue to &pound;794.7m for the 52 weeks in 2008 with like-for-like sales declining by 3.3 per cent. <br /><br />The group said that while the recession took its toll, with sales falling in the third quarter, trading has since improved.<br /><br />Chief executive David Wild said: &ldquo;We naturally remain cautious given the continued fragility of the economy and consumer confidence. <br /><br />&ldquo;There are, however, clear indications that Halfords is well positioned to deliver further earnings growth in the year ahead,&rdquo; he added.<br /><br />The group is also benefiting from its car maintenance division, as repair their own cars more often. Halfords generates sales of &pound;6m from its in-store fitting service alone. <br /><br />The group said it plans to open 10 to 15 UK stores in the next year, and is confident about long-term European expansion.<br /><br />Sat Navs have been hit by a drop in demand for big-ticket items, leading to price cuts of around 20 per cent, which has put margings under pressure. Yesterday the group raised its final dividend by 5.3p to 15.9p.