Pre-tax profits for car parts and bike specialist Halfords have fallen 20.4% as sales in its retail division were hit by motorists cutting back on car maintenance.
The fall was in-line with City expectations. In its interim results for the half year to 30 September, the group’s pretax profit fell to £54.7m against flat sales which slid only 0.5% to £454m.
Chief executive David Wild said the group’s performance was “robust” in the challenging market.
Revenue across the retail division dropped 1.6% to £400.6m and like-for-likes dropped 1.9%.
But sales at its autocentres continue to increase, with revenue up 9% to £53.4m and like-for-like sales up by 2.7%. However, operating profit declined due to investment in the opening of new stores, of which six were opened in the period.
“Our new marketing campaign, ‘that’s helpful, that’s Halfords’ has built awareness of our unique value offer to customers, which blends good prices, quality and innovative products with the expert service of our colleagues in each category in which we operate,” said Wild.
“Within stores we have been encouraged with the customer response to our innovations in cycling, where we have grown sales in premium, mainstream, children’s bikes and accessories.
“Motorists continue to be affected by inflationary rises in fuel and insurance costs, so their spending on maintenance has been subdued.
“We are, however, delighted with the growth of Wefit in stores and the improvement in the sales performance of our Autocentres business.”
The sales drop across the retail division was driven by a decline in car maintenance like-for-likes of 3.1%, while car enhancement sales plunged by 9.8%, which Halfords reported was in line with the long-term trend.
But its Wefit service saw a 22.2% lift in sales of wearing parts like bulbs, wiper blades and batteries.
Looking ahead to continue controlling costs Halfords said: “[We have] a significant number of leases due to expire in the next five years and this programme is a key opportunity to reduce our cost base.”
It added: “We are carefully managing all aspects of the business to deliver optimal performance for customers and investors alike in these harsh times. The board believes the group is well positioned and is focused on trading in the half ahead.”