* H1 profit up 3.2 percent, FY forecast unchanged
* Underlying sales in H2 so far point to slowdown
* H1 div up 5.3 percent
* Shares up 5.7 percent at 0927 GMT
(Adds detail, analyst comment, shares)
LONDON, Nov 20 (Reuters) - Halfords Group, the car maintenance and cycles retailer, on Thursday posted a 3.2 percent increase in first-half profit and forecast full-year profit in line with expectations despite a slowdown in second-half sales.
"Halfords' ongoing product and service developments together with continuing cost management provide the board with confidence in the delivery of full year (to end-March 2009) profit before tax, from trading activities, in line with expectations," said Chief Executive David Wild, who was poached from Wal-Mart in August.
Prior to Thursday's statement, consensus expectations stood at about 91.5 million pounds ($137.9 million), according to Reuters data, up from 83.5 million pounds a year earlier.
Halfords, which trades from 455 stores, also announced plans to expand its operations in Central Europe after a successful initial pilot in the Czech Republic.
It plans to open a store in Poland in December and a further 10 to 15 stores in Poland and the Czech Republic in the year to end-March 2010.
Halfords also plans to test a revised stand-alone cycle shop format across Britain, believing there is potential for up to 50 stores.
At 0927 GMT shares in Halfords were up 5.8 percent at 236 pence, valuing the business at 468 million pounds.
Before Thursday the stock had lost 28 percent of its value over the last year but had outperformed the FTSE All Share General Retailers Index by 66 percent.
For the six months to Sept. 26 the group made a profit before tax of 49.1 million pounds, slightly ahead of forecasts of about 48 million pounds and comparing with 47.6 million in the same period last year.
First-half revenue was up 1.6 percent at 407.1 million pounds, but sales on a like-for-like basis -- which strips out the impact of new store space -- were down 1.1 percent.
The fall in underlying sales was offset by an increase in the gross profit margin of 70 basis points to 51.6 percent, reflecting a higher proportion of sales of higher-margin car maintenance products and tight cost control.
Car maintenance products, such as wiper blades and light bulbs, are regarded as "needs driven" and as such are relatively resilient to the consumer downturn.
"The short period since the end of the half-year has seen some further slowdown in like-for-like sales performance. However gross margin percent continues to improve," Halfords said.
Freddie George, analyst at Seymour Pierce, said he would not increase his top-of-the-range current year pretax profit forecast of 94.5 million pounds.
"The business is partly counter-cyclical and the company is approaching easier comparatives in the third quarter. Management is rightly focused on at least maintaining gross margins and cost control," he said.
Halfords' interim dividend rose 5.3 percent to 5.0 pence.
(Reporting by James Davey; Editing by Chris Wickham, John Stonestreet)