Halfords predicts modest profits improvement after good Christmas

IMPROVING cycle sales and demand for car maintenance products have helped to boost the performance of Midland-based retailer Halfords.

In the 15 weeks to January 11, the Redditch group said total revenue had risen 1.6% compared with the same period during the previous year, while foe the 41 weeks to the same date revenue was up 0.8% on 2011.

It has said it does not anticipate a material improvement in short-term trading conditions and given current trading performance it has predicted pre-tax profits for the year ending March 29, 2013 to be in the range of £68-72m, a modest improvement on expectations.

Biggest growth came from the group’s Autocentres operation, which saw respective 12.4% and 15.4% improvements for the 15-week and 41-week periods.

In its trading update the group said cycling had initially been a weak market in the Older-Kids’ and Adult-Mainstream Cycles bracket, but these improved in the final weeks of the period, partially offset by a strong increase in Premium Cycle and Cycle Repairs sales.

In car maintenance there was a strong performance with parts sales up 13.2% and the 3Bs (bulbs, wiper blades and batteries) fitting service rose 11 percentage points to a record 39.5%. Mild and wet-weather conditions affected the demand for winter products.

Improved marketing and a stronger range supported growth in both audio and sat-nav sales, however, there were reduced sales of child car seats due to a focus on cash returns.

The group’s online sales improved and accounted for 10.9% of retail revenues.

The group said there had been no material change in its financial position, which remains sound.
 
Matt Davies, Halfords chief executive, said: “We are pleased with the growth achieved in all of the service-led Retail opportunities we had prioritised for increased investment, particularly Car Maintenance. Cycling sales initially disappointed but performed more strongly as the holiday period progressed and we were particularly pleased that momentum has been maintained in sales of Premium Cycles. Autocentres revenue continues to grow as we focused investment on the new-centre opening programme, capacity for future growth and motorists’ awareness of the brand.”

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