Halfords full year results beat expectations
HALFORDS has announced an increase in profits of almost 27% after full year results beat expectations.
The Midlands-based retailer has reported full year pre-tax profits of £117.1m, up from £92.4m this time last year. Expectations had been in the range of £110-£114m.
Chief executive David Wild said the results owed much to a disciplined growth strategy and improved sales in core areas.
The Redditch company is looking to consolidate its performance over the coming year following its £75m acquisition of the Nationwide Autocentres chain earlier this year.
Revenue increased 4.6% to £831.6m, while underlying like-for-like sales, adjusted for the later Easter, increased by 0.7%. Operating profit was up 17.5% at £119.7m, representing 14.4% of sales – up from 12.8% last year.
Basic earnings per share rose to 39.7p, an increase of almost a quarter (24.8%), while net debt after funding the Nationwide acquisition was £155.5m, which compares with last year’s figure of £173.9m.
The business saw continued strong sales and market share growth in its core car maintenance and cycling operations. The firm said margin gains reflected successful on-going implementation of active trading strategies.
A successful cost-cutting strategy delivered savings of £6m, while there was strong growth reported in the company’s wefit and werepair operations.
It also said the integration of the Nationwide centres was progressing well.
Mr Wild said: “Halfords has had an excellent year. As a result of our disciplined growth strategy and a clear focus on the needs of our customers, our business continues to develop strongly. Sales growth in core areas, margin expansion and disciplined cost control has led to the delivery of 25% earnings growth.
“In addition we made our first acquisition, Nationwide Autocentres, which represents a natural extension of Halfords service proposition in the car aftermarket and is already making a good contribution to the group.”
Looking ahead, he said the firm would continue to expand its core retail business and aimed to double earnings from the Autocentre operations over the next three years.
It also wants to harness a strong cash flow to fund further acquisitions that meet investment criteria.
“The aim of this strategy is to deliver sustainable earnings growth over the medium term of, on average, 15% per annum,” added Mr Wild.
He said that while the firm remained cautious about the current state of the wider UK economy and the immediate outlook for consumer spending, it had a proven strategy, a resilient business, and saw significant opportunities.
“The board is therefore confident that the group will deliver further earnings growth in the year ahead. The group’s success reflects the continued hard work and contribution made by all colleagues. I would like to thank them for their continued efforts,” he said.
