Halfords launches new growth strategy as profits dip
HALFORDS, the Redditch-based retailer of motoring, cycling and leisure products, has launched a new growth strategy, Moving Up A Gear, after reporting a half year dip in profits.
The firm, which is also an operator in garage servicing and auto repair, revealed profit before tax after non-recurring items of £46.4m in the 26 weeks to October 2, 6.3% down on the £49.6m achieved in H1 2015.
Its interim results revealed revenue had increased by 1.8% to £533.5m (H1 2015: £524.1m). Retail increased by 1.3% to £458m and Autocentres by 4.6% to £75.5m.
All retail categories grew except cycling, due to weak sales in July and August, and motoring performed well, especially car maintenance with sales up 6.5%.
Net debt was down £7.9m year-on-year to £62.4m.
Chief executive Jill McDonald said: “In the first half the motoring side of the business performed well and in-store service sales grew strongly, reflecting our focus on this key area of differentiation.
“The cycling performance in the second quarter was disappointing and, given the seasonal mix towards cycling during the summer, this contributed to the decline in group profitability for the period.
“Looking forward, there are plenty of reasons for us to remain confident that the cycling market will continue to grow over the long-term.
“Today I am announcing a new group strategy called Moving Up A Gear. After three years of investing to stabilise the foundations, improve service levels and grow sales, Halfords is now a fundamentally strong business, operating in markets with good growth prospects.
“However ,the modernisation process is not yet complete. Under the new strategy we will continue to invest to move from fixing the basics to enabling sustainable growth.
“There are a number of significant opportunities for further improvement, which include the leveraging of customer data and analytics, relentless innovation, a better shopping experience, enhanced customer service and services, and a fulfilment infrastructure for modern times.
“We look forward with confidence to growing Halfords over the long term.”
