Outgoing chief executive leaves retail group in strong position
The outgoing chief executive of retailer Halfords appears to have left the group in good shape with latest full year results showing a 7.2% increase in revenue.
Marks & Spencer will be hoping Jill McDonald can do the same for its own business when she takes on responsibility for its womenswear and childrenswear later this year.
Redditch-based Halfords said the improved performance reflected its strengthened services proposition, new product ranges, investments to modernise the business and the acquisition of Tredz/Wheelies.
However, the performance still could not prevent a decline in full year profits, with the pre-tax figure of 75.4m representing a £6.1m fall year-on-year. The company has blamed the situation on an increase in the cost of goods associated with the depreciation in sterling, which it said had had an adverse impact of around £14m.
Revenue of £1,095.0m was up 7.2%, with like-for-like growth of 2.7%. Gross margin of 51% was 220 basis points lower than the prior year, predominantly due to the impact of foreign currency exchange rates.
Across its various divisions, motoring saw a like-for-like increase of 2% and cycling was up 5.1% with share gains in both markets. Service-related retail sales rose 11.1%, while online sales which included Tredz/Wheelies, was up 30.5%.
Its car maintenance arm, Autocentres saw 2.4% grow in revenue, with a strong online booking performance which rose 29.1%. Tredz/Wheelies was said to have performed well in its first full year, with sales up 22% year on year.
Ms McDonald said: “We are pleased with the sales performance in the last financial year, with growth across all areas of our business and market share gains in both Motoring and Cycling. Our focus on, and investment in, services was reflected in the significant growth of service-related sales.
“Our priorities for the financial year we are now in will include further improving and utilising our customer data, consolidating our service and services credentials, continuing to invest in our colleagues, further investment in our online platforms and rolling out our successful new store refresh concept.
“Underlying business performance is strong and there is good momentum in delivering our strategic priorities. Currency movements will impact profits, but our mitigation plans are well developed and progress to date is encouraging. We anticipate FY18 profit to be in line with current market expectations and remain confident in the outlook for the group.”
