Halfords is to “focus on growth” and drive its credentials as a service-and-solution provider by investing in staff training and marketing.
The car parts and cycles specialist will invest £6m into the retail business in the current financial year, spending £1m on marketing its bikes range and a further £1m on promoting its in-store fitting service, Wefit.
Another £3m will be ploughed into staff and training, particularly at the services arm.
Halfords chief executive David Wild said in-store fitting revenues rose 28% to £15m in the fourth quarter.
A further £1m will be spent on improving Halfords’ click-and-collect service. All stores will be able to offer click-and-collect within an hour if an item is in stock, for instance.
Halfords will also invest in marketing its Autocentres, where revenue has continued to climb, up 15.6% for the 13 weeks to March 30.
Halfords reported flat group revenue for the fourth quarter as car enhancement sales pulled down the overall performance. Like-for-likes in that category slumped 14.5%. Cycling like-for-likes increased 6%.
“These are great results at a tough time,” said Wild. “Now we want to build on these figures.” He said the retailer would be reviewing its property portfolio, but did not expect the number of stores to change. “We’re lucky we have 140 store leases expiring in the next three year so we can enter into robust discussions with the landlords,” he added.
Wild warned that the rising cost of petrol could have a bad impact on drivers.
Halfords expects to hit year-end pre-tax profit forecasts of £90m to £93m – down from the £118.1m it posted for the previous year.
Analysts have forecast that for the present financial year, ending March 30, 2013, pre-tax profits will drop 11% to £80m, as underlying costs increase and the retailer invests.
Investec analyst David Jeary said 2013 could be the “trough year” for pre-tax profits.
He expects earnings to bounce back in 2014 as the investment kicks in.