Halfords’ Autocentres business is expected to offer “attractive medium-term earnings benefit” to the car parts and bikes retailer, said analysts that attended an investor trip last week.
Want to know more about Halfords?
Peel Hunt analyst John Stevenson said the visit “renewed confidence in the medium-term growth opportunity” for the retailer.
Halfords intends to open 30 new centres this year.
Singer analyst Mark Photiades said the event “reaffirmed the rationale for the acquisition, which offers Halfords entry into the highly fragmented service and repair market”.
Last week Halfords revealed that trading at its Autocentres business had improved, with like-for-like sales edging up 0.9% in the 10 weeks to May 9, compared with a 2.3% decline recorded in January and February.
“Halfords made clear that car servicing is a tough market at present”
Nick Bubb, Arden
Photiades said he was encouraged by the sales uplift, particularly in light of Halfords’ subdued trading in its last financial year, which reflected a “challenging macro environment where consumers are driving less and are avoiding spending on their cars”.
Halfords said its Autocentres business, acquired last year, has benefited from a national ad campaign and the launch of a revamped website.
Arden analyst Nick Bubb said Halfords Autocentres is a “good, well managed business”, but cautioned: “Halfords made clear that car servicing is a tough market at present, with customers deferring all but the most essential work on their cars.”