Halfords profits rise as consumers holiday at home

Group like for likes declined 3.3 per cent while total group sales slid 0.3 per cent to £794.7m – the first time in 20 years that the retailer has experienced a decline in sales.

Gross margin increased 160 basis points in the year.

Sales in multi-channel rocketed 90 per cent thanks to the success of Reserve and Collect.

Its car maintenance category delivered “strong like-for-like sales growth” allowing Halfords to continue to grow its market share. 

The car enhancement category has felt the “largest impact from the changing consumer spending patterns as consumers reduce their expenditure on higher ticket discretionary items”. Halfords is the “clear” market leader cycles in the UK, selling more than 1 million bikes per year – about a third sold in the UK.

Travel improved, thanks in part to the “anticipated increase in the level of domestic holidays” during the year. This year the retailer had its best year ever in camping equipment, despite poor weather.

Halfords, which operates from 438 UK stores, believes there is room for another 60 stores in the country. It will open 10-15 stores this year.

Halfords operates 22 stores in the Republic of Ireland, where like for likes plummeted 25 per cent in the second half. However, the retailer sees long term growth in the market and intends to invest in the territory.

The retailer operates from five stores in the Czech Republic and one store in Poland. Halfords believes there is scope for a total of more than 150 stores. The Central European region made losses of £3.2m compared with losses of £2.2m last year, due to investment in the region. Halfords plans to open up to 10 more stores in the region in the next year.  

Chief executive David Wild said: “These results demonstrate Halfords’ many strengths. We continue to manage the business proactively, intervening early to deliver sustainable reductions in operating costs. We naturally remain cautious given the continued fragility of the economy and consumer confidence. There are however, clear indications that Halfords is well positioned to deliver further earnings growth in the year ahead.”