Currys said price rises were “inevitable” as it told shareholders that it expected to face £32m in extra costs due to policies from the budget.
The electronics retailer, which runs 715 stores, revealed that group revenues increased by 1% to £3.92bn for the half-year to 26 October, compared with the same period a year earlier.
It said strong UK sales had helped to offset a modest decline in its business in Nordic countries.
The group also revealed that it reduced its pre-tax loss for the half-year to £10m, from a £44m pre-tax loss a year earlier.
The chancellor, Rachel Reeves, announced in her autumn budget that the rate of employer national insurance would rise from 13.8% to 15% next April.
The secondary threshold – the level at which employers start paying the tax on each employee’s salary – will also be reduced from £9,100 a year to £5,000.
Combined with a 6.7% increase in the minimum wage from April, that has led to a string of businesses saying they would be hit hard by increased costs, which they could end up passing on to employees and customers.
Alex Baldock, the chief executive of Currys, said: “We’re very encouraged by our progress. Currys’ performance continues to strengthen, with profits and cashflow growing significantly, and the group’s balance sheet is strong.
“Looking ahead, we’re confident of continuing our progress, and expect to grow profits and cashflow as promised this year. This is despite new and unwelcome headwinds from UK government policy.
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“These will add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable.”
Garry White, the chief investment commentator at the stockbroker Charles Stanley, said the results gave confidence that the chain may soon resume paying dividends. “Against many gloomy predictions, it shows there’s still life left in the UK high street yet,” he said.