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Halfords invests £8m in mobile tyre-fitting firm

Halfords has paid £8m for a stake in a mobile tyre-fitting service as it expands its motoring interests.

The autoparts-to-cycling retailer said its investment in TyresOnTheDrive.com included an operating agreement.

It made the announcement while revealing an 11.4% leap in group sales during its third quarter, which covered the crucial Christmas trading season. Its shares closed 9% higher.

It credited the performance, during the 15 weeks to 13 January, on a 13% jump in revenue at its retail operations - with growth across the board.

Only Halfords' Autocentres division endured a drop in business, of 0.6% on the same period in 2015/16.

The company, which has previously warned of a £6m impact from the fall in the value of the pound, said its new hedging strategy meant it expected to "fully mitigate" the effects over time.

The retail sector is among those under pressure to pass on higher import costs to customers - with official figures suggesting the process began in some areas, including food, before Christmas, leading to a rise in inflation and putting pressure on family budgets .

Halfords' annual profit guidance remained unchanged. The chain said its promotional activity was in line with the corresponding period in the previous year meaning its forecast profit margins were on track.

The firm also told investors that because it did not foresee any further acquisitions - in addition to its recent investments in a number of cycling brands - it would pay a special dividend next month of 10p-per-share.

Chief (Taiwan OTC: 3345.TWO - news) executive, Jill McDonald, said: "I am very pleased with the strong sales performance across our business in the important third quarter of the year.

"We continue to make good progress implementing our "Moving up a Gear" strategy which will enable us to capitalise on the long term growth opportunities in our markets.

"We benefited from growth in new ranges, our unique "wefit" services and great execution by our colleagues over the busy peak period."