Profits at Halfords, the car parts and bicycle retailer, rose 11 per cent last year on the back of a surge in cycle sales as customers were reluctant to pay high fuel prices and have became more environmentally aware.

The group also plans to open branches in Eastern Europe, where potential growth is stronger than in Britain.

The company said that sales climbed 7.2 per cent to £797.4 million with a 4.3 per cent increase at stores that have been open at least a year. Net income rose from £57.4 million to £64 million in the year ended March 28.

The retailer reported strong growth in all its businesses, including car maintenance, car enhancement and leisure. Nick Wharton, the joint acting managing director, said that sales of auto parts rose as more people chose to repair vehicles rather than buy new ones.

Mr Wharton said cycle sales were assisted by an endorsement agreement with Chris Boardman, the former Olympic cycling gold medallist. The price of the group's premium range of cycles starts at £399 and rise to £1,499, and sales of the Boardman range have exceeded forecasts. The Boardman bikes will also be used by the British Olympic team at this summer’s Games in Beijing.

"Beautifully for us, the only place you can buy a Boardman bike in the UK is a Halfords store," Mr Wharton said.

He added: “There is now little doubt of a resurgence of the cycle market in the UK." Reasons for increased cycle sales include increased awareness of carbon emissions and their impact on the environment, and record oil prices, convincing some motorists to switch from four wheels to two.

Pre-tax profit rose 11 per cent to £90.2 million, beating the average analyst forecast of around £87.6 million.

Halfords said it can see the potential for opening at least 100 more stores in the UK, at a rate of between 15 and 20 a year. The retailer also announced that its first store in Poland will open this autumn in Wroclaw, with plans to open three shops in the Czech Republic. Slovakia and Hungary were also targets for expansion, Mr Wharton added.

Halfords shares rose 8.5p this morning, or 3.2 per cent, to 275p.

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