Halfords in uphill struggle to keep pace

Halfords remains stuck in the slow lane after reporting more disappointing sales figures following a profit warning in January.

Revenues at the Redditch-headquartered business were down 3.9% for the 20 weeks to August 16, dragged down by its retail operations.

It now expects its underlying pre-tax profits for the year to be between £50m-£55m, which would be a drop of up to 15% following last year’s fall of 18%.

Halfords chief executive Graham Stapleton said: “We set out a new strategy for the business last year and while it is still early, we have already seen encouraging signs of progress. We remain confident that it is the right strategy to drive the sustainable growth of the business.”

Halfords is in the midst of a difficult period, cutting back on capital investment and reduced costs.

Its share price has reflected its difficulties, falling by half in the last year. The company fell out of the FTSE 250 earlier this year and last night’s close had a market value of £350m.

Stapleton said: “Despite sales growth in group services, online and B2B, we have seen our overall sales impacted by cooler, wetter weather and weaker consumer confidence year-on-year. The market has been challenging but we are pleased to have seen increased market share in our core categories.

“In the second half, we believe the economic and political uncertainty will continue to impact big-ticket discretionary spend and, therefore, as in the first half, we will continue to focus on improving gross margins and controlling costs.”