Halfords suffers fall in full-year profits

The cycling and motor accessories specialist said profits slid 24% to £51m in the year to March 29, when revenues inched up 0.3% to £1.14bn.

Halfords’ like-for-likes rose 1.1% at group level. Retail like-for-likes advanced 0.8%, while at the Autocentres arm they rose 2.6%.

The retailer said its retail performance “was impacted by extremely mild winter temperatures” which boosted cycling sales – up 2.6% like-for-like – but hit its motoring business, which was down 0.4% like-for-like.

The retailer expects profits next year to be “broadly in line” with the year just reported, but cautioned that the delivery of its strategy “is likely to take longer than we expected as we adapt the plan to the current environment”.

Halfords chief executive Graham Stapleton told Retail Week that lower consumer confidence had impacted sales as customers held off from making big ticket purchases, although this slowdown was offset by exceptionally hot weather last summer bolstering the business’s sales across its cycling division.

Graham added that he expected a similar level of consumer confidence to continue for at least the duration of its current financial year, which he expected to impact the roll out of Halfords new strategy.

Stapleton said the specialist retailer would focus on enhancing its digital proposition growing its services offering in the current financial year, with £35m earmarked for improvements across these two areas.

”Halfords Group has delivered sales and free cashflow growth in what remains a challenging UK consumer environment,” said Stapleton.

“While motoring continued to be impacted by extremely mild weather conditions, we are pleased to have seen continued and sustained growth in cycling, underpinned by improvement in our exclusive own-brand ranges.

“Autocentres continued to perform well throughout the year, with strong sales growth, margin improvement year on year and good cost control. This focus led to a second year of profit growth within the business.

“Since launching our new strategy, we have seen encouraging early progress. As we strengthen our unique services proposition, customers are responding positively, and we are particularly pleased that nearly a quarter of all Halfords sales are now service related.

“Consumer confidence remains fragile. However, we remain confident that the strength of our customer offer, our people, our strategy and clear focus on our medium-term financial targets leave us well-placed for long-term sustainable growth.”