Total retail sales drop for 2011 at Halfords

REDDITCH-based national bike and car parts retailer Halfords has reported a mixed start to the year with a drop in demand for its car services but a hike in leisure product sales.

In addition, the company has announced today a share buyback programme of up to £75m.

In a pre-close statement for the 13 weeks to April 1, 2011, car maintenance has dropped 12.7% and car enhancements have fallen 10.2% compared with 2010.

Sales of leisure products have risen by 5.2%, including a climb in like-for-like bike sales of 8.7%, but total retail has fallen by 6.7%.

Online sales saw a massive spike, up by 52%, accounting for 9.3% of all retail sales while its car maintenance division Autocentres have enjoyed a 2.1% rise in business for the period. Total retail sales for the 52-week period are down by 5.3%.

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Halfords also said today it had entered into an arrangement with its broker, Bank of America Merrill Lynch, to repurchase ordinary shares in the retailer.

“In what has been a challenging year, the board anticipates profit before tax of between £124m to £127m for the full year 2011 and group sales of circa £869m with retail at £771m and Autocentres at £98m,” the statement added.

“Within retail, gross margins were broadly flat in line with previous guidance.”

Chief executive David Wild said: “We believe the environment will remain difficult for customers.

“We are responding with a trading strategy that offers great value, expert services and many new products.

“We are pleased to announce the launch of a share buyback programme. The strength of our cash generation and our balance sheet means that we can both return capital to our shareholders, maintain our dividend policy and retain the flexibility to invest when we identify the right opportunity.