Halfords sticks to profit outlook after strong Christmas quarter

LONDON, Jan 19 (Reuters) - British bicycles to car parts retailer Halfords on Thursday maintained its profit expectations for the full 2016-17 year after beating market expectations for sales in its key Christmas quarter.

Halfords also announced a special dividend of 10 pence per share to be paid next month and said it had purchased a minority stake in TyresOnTheDrive.com, a UK mobile tyre fitting business, for up to 8 million pounds ($9.8 million).

The group said retail sales at stores open over a year rose 7.0 percent in the 15 weeks to Jan. 13, its fiscal third quarter, highlighting growth in new ranges.

That compared to analysts' average forecast of 3.6 percent and first half growth of 2.2 percent.

"There is no change to our expectation of group profit before tax for the current financial year, which is in line with market consensus," it said.

Prior to the update analysts were on average forecasting a pretax profit before one off items for 2016-17 of 74.2 million pounds, down from 81.5 million pounds in 2015-16.

In November, Halfords reported a 12 percent drop in first-half profit and said the fall in the value of the pound following Britain's vote to leave the European Union would remain a major challenge going forward.

"We have developed detailed plans in response to the increase in costs from adverse foreign exchange movement and we are confident that we will be able to fully mitigate the impact over time," it said on Thursday. ($1 = 0.8155 pounds) (Reporting by James Davey; editing by Sarah Young)