Halfords puts faith in its bikes after a wobble

Halfords struck a bullish tone on the boost this summer's Olympics is set to give its cycling sales, as it unveiled annual profits down by about a quarter.

David Wild, the chief executive of the bikes and car-accessories retailer, also said the South-east of England was its best-performing region and that it wanted more stores inside the M25, where it is "under-stored" in London.

Halfords, which sells about one million, or one in four, bicycles bought in the UK, hopes to reap the rewards of changing and updating its bike ranges over the past 18 months ahead of the Games. In addition to the bikes it sells endorsed by former champion Chris Boardman, Halfords last month introduced three lines from Victoria Pendleton, the world and Olympic cycling sprint champion.

Mr Wild said: "I think there is huge interest in the Olympics. Everyone is talking about it."

Halfords said it expects its pre-tax profits to come in at between £90m and £93m for the year to 30 March, following £125.6m in 2010-11.

This was driven by falling underlying revenues on car maintenance and enhancement products, as hard-pressed customers cut back. But its cycling-dominated leisure business grew like-for-like sales by 5 per cent.

The group forecast its revenues were down by 1 per cent to £861m.