Nationwide skills shortage blamed for profit warning

Halfords has blamed a nationwide skills shortage as it issued a profit warning despite “unprecedented demand”.

The group has been focused on growing its services business, providing MOTs, car servicing and car repairs at more than 600 Autocentres, to balance out the more discretionary and cyclical nature of its retail offer.

However it has 1,000 vacancies for automotive technician roles and being unable to recruit enough skilled technicians in its Autocentres business will “limit growth of higher margin sales during the important upcoming Q4 MOT peak”, the company has warned.

It has resulted in a significant cut to its forecast for underlying profits for the year to £50m-£60m, down from £65m-£75m.

Halfords chief executive Graham Stapleton said: “With unprecedented demand in our Motoring Services business, we are particularly impacted by the nationwide skills shortage, with recruitment proving to be extremely challenging in the current labour market.

“We are continuing to take a range of actions in order to fill 1,000 new automotive technician roles, which include our new Later Life Apprenticeship programme, as well as a focus on attracting more women and young people from disadvantaged backgrounds into automotive apprenticeships.”

The group grew revenues by 38% in the third quarter, with like-for-like revenues up 13%.

It said its motoring the “needs-based categories” performed strongly, but more discretionary areas including cycling and tyres were “softer than expected”.

The Redditch-based group is preparing for a long road to recovery and has warned it “remains particularly difficult forecasting with any certainty”.

But it remains cautious and said it does “not expect a significant short-term recovery in high ticket, discretionary spending”.