Halfords is looking to “evolve” its strategy in the new financial year after posting group pre-tax profit down 26.6% to £92.2m for the year to March 30.
The car part and cycle specialist delivered a slip in total group revenue of 0.8% to £863.1m.
Revenue across the retail arm dropped 2.3% to £752.3m, but this was offset by a stronger performance by Halfords’ Autocentres, where sales were up 12.9% to £110.8m.
Halfords said the significant decline in its pretax profit was due to the tough economic climate which impacted motorists.
Cycling grew across the period with like-for-likes increasing 9.7%, as sales across premium bikes and accessories were “strong”. In store service revenue also surged 22.6% as fitting hit record levels, according to the retailer.
But growth in the category has begun to slow as Halfords reported that seasonal demand for cycling and outdoor leisure products had not reached usual expectations, although it believes this is deferred rather than cancelled sales and it expects these categories to perform better as the year progresses.
However, as a result of the slow down in bikes, Halfords said retail sales in the current financial year “have been very disappointing so far”.
Halfords chief executive David Wild said due to the strength across leisure, including cycles, fitting services and Autocentres it is “evolving” its strategy to become the Friend of the Motorist, the Best Cycle Shop in Town and the Starting Point for Great Getaways.
He said: “In each of these areas we believe we have a unique end to end solution and are well positioned to increase our share in significant markets.
“We are investing in these opportunities, specifically in fitting resources, increased marketing and enhancing our multichannel offer. This will accelerate the evolution of Halfords from a traditional retailer to a contemporary solutions provider, will contribute to future growth and create up to 1,000 new jobs.
“Halfords continues to be profitable and strongly cash generative and we are seeking to maximise our performance in this demanding retail environment.”
In its fourth quarter update Halfords revealed it would be investing £6m into the business in marketing, bikes and staff training.