Halfords sees shares soar after raising profit forecast
Shares in motor accessories and leisure goods retailer Halfords jumped 15% today as the Redditch-based group reported surging profits as demand for bicycles and bike supplies through the Covid 19 pandemic continued.
In September, the company warned that strong sales boosted by a larger cycling market and the positive impact from the current staycation trend could dampen after the holiday season ended.
However, the retailer today raised its profit guidance on the back of a continuing strong sales trend.
Halfords said it now expected profits for the first half of the year to come in at more than £55m before tax. Previously it had predicted £35m – £40m.
The company said: “Despite the peak cycling and staycation season coming to an end, this positive momentum has continued, such that group like-for-like growth in the five weeks to 25 September 2020 was +22%.
“Cycling has continued to perform well, up +46% LFL in the five-week period, reflecting the strength of our unique proposition and continual improvement in supply to meet unprecedented levels of demand.
“Motoring in our retail business improved to +7.5% LFL in the five-week period. Our autocentres business continued to grow strongly, up +18% LFL (+64% including acquisitions). This included exceptional demand for our growing Mobile Expert proposition, driven by customers seeking greater convenience and safety from our fleet of vans. With the substantial growth we have seen in our motoring services business across both Retail and Autocentres, we have launched a national campaign to recruit hundreds of skilled technicians.”
However, Halfords added that it remains cautious in its outlook for the second half of the year.
The company said: “The potential impact of second waves of COVID-19 now seems more pronounced than just a few weeks ago, and the economic impact of an end to the furlough scheme and the outcome of Brexit negotiations remains very uncertain.
“We are well placed to address any headwinds we may face and capitalise on the tailwinds as they arise. Our balance sheet and liquidity position remain strong.”
