Safe Speed Forums

June 9 (Bloomberg)Halfords Group Plc, the U.K.'s largest retailer of auto parts and bicycles, said annual profit almost tripled as the company opened stores to boost sales.

Net income for the year ended April 1 rose to 39.9 million pounds ($73 million), or 18.5 pence a share, from 13.5 million pounds, or 8 pence, a year earlier, the Redditch, England-based company said today in a statement. Sales increased 8.6 percent to 628.4 million pounds and remain positive this year, it said.

The retailer, whose private-equity owners raised 267 million pounds in an initial share sale last year, opened 18 stores in the year, taking the total to 398. Halfords also added mezzanine floors to 38 stores to increase their selling space.

``Mezzanines have been a fantastic trick, but once you've done the trick once you've got to go and repeat it to keep the City happy,'' said Andy Brough, a fund manager at Schroders Investment Management, which oversees assets worth about $6.5 billion. ``The outlook for retailing looks pretty tough.''

Shares of Halfords rose 3.5 pence, or 1.2 percent, to 291 pence at 8:07 a.m. in London, giving the company a market value of 661 million pounds. The stock, which was sold to investors at 260 pence a share, has dropped 6.5 percent this year.

Chief Executive Ian McLeod said Halfords is ``trading positively'' at a time when U.K. consumer spending is slowing.

`Challenging' Market

``We know that the market in overall terms might be a bit more challenging, but we're still quite encouraged by our own performance,'' he said in an interview. McLeod was promoted from his post as chief operating officer in March when the previous chief executive, David Hamid, stood down because of ill health.

The earnings benefited from a reduction in interest costs to 14.7 million pounds from 35.4 million pounds a year earlier as the company used proceeds from its share offer to cut borrowings. Net debt in the year fell 51 percent to 169.7 million pounds.

Sales at stores open at least a year rose 8.9 percent in the year, helped by demand for the latest car accessories such as speed-camera detectors and satellite navigation systems, Halfords said. Demand for speed-camera detectors is growing because of the increased proliferation of cameras on U.K. roads.

Founded as a local hardware store in Birmingham in central England in 1892, Halfords today ranks as the U.K.'s largest retailer of auto parts and bicycles, with about 9,200 employees.

About two-thirds of the company's sales comes from automotive products such as spare parts, audio systems and alloy wheels. The rest is generated from cycles and cycle parts.

The company plans to pay a second-half dividend of 8.3 pence a share, taking the total for the year to 12 pence.