Halfords up although bike sales fail to deliver Christmas present
REVENUE from car maintenance during the December cold snap helped to boost the fourth quarter performance of retailer Halfords although its traditional cycle sales failed to deliver the firm its usual Christmas present.
In an interim management statement, the Redditch-based retailer said revenues increased by 3.5% in the fourth quarter to the end of December.
Within its trading divisions, the firm said retail revenues decreased by 6.6% like-for-like while its Autocentres saw revenues increase by 1.6% on the same basis.
For the full year, Halfords is retaining its guidance that gross margins will be broadly flat.
Group pre-tax profit in the quarter was slightly less than anticipated and for the full year is expected to be at the lower end of the market range.
Car maintenance sales were strong, growing by 12% compared with the previous year. Fitting levels of Bulbs, Blades and Batteries grew by 29% to a record 26% of car maintenance sales.
Cycle sales were down 16% like-for-like as fewer children’s cycles were given as presents and premium bikes were affected by the temporary slow-down in Cycle-to-Work sales.
Halfords said its new distribution centre operated efficiently ensuring optimum levels of product availability.
Autocentres retail customer numbers increased by 3.1% and average retail customer transaction values increased by 1.4%. The firm’s 151 centres were re-branded as ‘Halfords Autocentres’ following the Nationwide acquisition last year and seven new centres were opened.
David Wild, chief executive, said: “The strong performance from our Car Maintenance category and the positive sales in our Autocentres demonstrates how customers recognise Halfords as the destination for their motoring needs.
“We are building on this momentum and with the launch of our 240 re-branded Halfords Autocentres this spring we will be uniquely positioned to develop our business further in the car-servicing sector.”
He said although cycle sales had been poor in the run-up to Christmas, the firm was confident the fundamentals of the bike market remained strong.
“This year has been one of significant development for Halfords and our colleagues have worked hard on strategic initiatives across the business. These changes deliver savings, a more flexible cost base and are designed to provide a better service for our customers,” added Mr Wild.
He said the wider economic outlook was clearly challenging for consumers but Halfords had a strong brand with a leading customer offer.
“We continue to focus on opportunities in the UK and ROI that will deliver long term, sustainable earnings growth,” he said.
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