Shares in Halfords surged by more than 11% on Wednesday after bike sales helped power the retailer to a better than expected trading performance.
The upbeat update came just two months after new chief executive Matt Davies unveiled a £100 million package aimed at turning around a business which has been severely impacted by the trend towards online shopping.
The company which is using collateral from a slashing of the dividend to fund the restructure saw pre-tax profits after exceptional items fall by almost a quarter in 2013, down 24.5% from £94.1m in 2012 to £71m.
However, the company yesterday revealed an improved trading performance in the first quarter of the 2014 financial year.
Total group revenues were ahead by 8.7% in the period, with a 9% uplift from its retail division and its autocentres business seeing a 7.8% increase.
On a like-for-like basis, group revenues were 7.5% ahead of the year before a not unexpected return considering the comparable quarter last year had been weak given the washout start to summer.
However, the performance in the 13 weeks to June 28 was still ahead of market expectations, and strong investor activity on the back of the update yesterday saw shares surge in early trading.
The company’s cycling range, which includes brands endorsed by stars Chris Boardman and Victoria Pendleton, was the biggest contributor to the upturn with a 15.5% increase in revenues in the quarter.
Premium bicycle sales led by its own Carrera brand did especially well in the period, with sales up 22.8%.
Halfords also pointed to increasing female interest in cycling with the launch of a new traditional-style women’s bicycle helping the Pendleton range to post a 70% sales increase year-on-year.
In other areas of the retail business, car maintenance was up 11.8% while the company’s technology and travel solutions offering, which includes everything from tents to child car seats, both took a hit.
Mr Davies said: “We are in the early stages of our Getting Into Gear 2016 plan … Our focus is on delivering this plan over the medium term to drive sustainable and profitable revenue growth.”
Analysts Investec moved to increase its full-year expectations for pre-tax profits by 11% to £60.1m on the back of the update.