Halfords has revealed its sales grew over the past year as the retailer modernised its garages and tapped into demand for e-bikes.
Shares in the company soared by about 14% following the update.
The motoring and cycling retailer said revenues totalled £1.8 billion in the year to April 3, up 4.8% compared like-for-like with the previous year.
This was driven by a 4.1% uplift in retail sales and 5.8% jump in sales for its autocentres.
Halfords said its consumer garages business – which includes car repairs and MOTs – had been boosted by the opening of dozens of Fusion garages, which integrate retail and garages together.
It has opened more than 100 of these garages and is aiming for another 35 this year.
More than half of the company’s revenues come from its service-related sales.
The firm has been taking steps to make its workforce more efficient and reduce labour costs in the face of higher wages and national insurance increases, including redeploying staff to busier garages and reducing reliance on more expensive agency workers.
It also flagged efforts to modernise the network by bringing in specialist EV servicing equipment into most sites and is planning to give staff tablets to support vehicle inspections.
Chief executive Henry Birch said: “We have countered £40 million worth of inflation, £32 million of which was effectively wage inflation – a combination of national insurance, minimum wage, and the knock-on impact.
“So the fact that we are reporting profit growth even with that inflationary backdrop… I think is a fantastic result.
“That hasn’t been a result of us implementing job cuts, that has been about driving the business better, doing more sales and improving our growth margins.”
In the retail business, which sells products including bikes and car parts, Halfords said sales grew despite a subdued consumer environment.
It said a highlight within its cycling segment was e-bikes, with plans to significantly expand its range, including mountain and hybrid e-bikes as demand grows.
Halfords said trading had continued to be strong in the past few months and that it had not seen any change to customer behaviour stemming from the Iran war, although it was “sensitive” to any impact on spending which could show up in the months ahead.
Mr Birch said the early hot summer weather had helped lift sales of some products like air conditioning and accessories to keep people cool in their cars.
“Or it’s associated with staycations, so people buying roof boxes, roof racks, cycling does well – anything where people are getting out and about in the UK.
“There seems to be a growing trend for people holidaying in the UK, which I think is ultimately really good for our business over the long term.”
The company revealed it returned to a pre-tax profit of £43.6 million for the year, from a £30 million loss the year before.