Halfords has put potential acquisitions on the back burner as it focuses on the core business.
Chief executive David Wild told Retail Week: “We have a strong balance sheet but we are not looking at buying anything in the short term. However, if the right opportunity comes up, we would consider it at the right price.”
Instead, Halfords will concentrate on driving UK like-for-likes and integrating the Autocentres business. Execution Noble analyst Sanjay Vidyarthi said putting off further acquisitions is “eminently sensible”.
Earlier in the year Halfords had drawn up a list of potential acquisition targets, which included arts and crafts retailer HobbyCraft, which was eventually sold to Bridgepoint. Halfords bought car servicing and MOT company Nationwide Autocentres from Phoenix Equity Partners in February, and said at the time it would look at further acquisitions.
Last week Halfords reported pre-tax profit up 12.8% to £68.7m in the 26 weeks to October 1, but like-for-likes were down 4.9%. Total sales were up 7.3% to £456.3m. Like-for-likes in the six weeks since the end of the half year have also struggled, down 5%.
Wild said the climate was “tough” but that Halfords was confident after completing several initiatives, including solving the problems with its new warehouse, which had led to some stock shortages, the remodelling of staffing structures and the closure of its central European operations. It has also concluded the refinancing of its debt arrangements “on favourable terms”.
“These changes caused a degree of disruption but they are behind us now and have helped us create a platform for growth,” said Wild.
He said Christmas comes “later every year” but expects its kids’ bikes will be big sellers this year.