Halfords says ‘monumental effort’ helped tackle inflation

Halfords says whilst its underlying profit before tax for the year decreased by 42%, it believed it was a “solid result against such a difficult environment”.

The group reported it took £51.5m as profit before tax last financial year, as it focused on “cost and efficiency”, whilst 2022 saw profits of £89.8m.

The war in Ukraine acted as “a catalyst to already increasing inflation” but it was the “volatile political and economic environment in the Autumn that brought about a rapid change in trading patterns in more discretionary, and typically high-ticket products”.

It said whilst it delivered £20m of savings and mitigated the potential of energy rate increases, the cost of freight was a “significant headwind” as well as “inflation in cost of goods generally”.

“Many of our international supply partners continued to operate below capacity and input prices remained significantly above pre-Covid levels”.

Halfords also citied the 6.6% National Living Wage increase from April 2022 as driving inflation into labour costs, alongside the “significant skills shortage across the UK – particularly noticeable in Autocentre Technician markets”.

“This monumental effort was necessary to tackle the inflation in costs across the business”.

Halfords reported revenue growth of 15.3% of £1.59bn with service-related sales accounting for almost half of the Group’s total revenue at 48%, and B2B revenue reaching 24%.

It does however anticipate two of its core markets are facing a “significant downturn”.

It says the consumer tyre market remains -14% below 2020 and the cycling market -24% below the same period, and looks forward to “the recovery of these markets, coupled with continued market share growth” to improve its performance.