Halfords pleased with first half progress despite ongoing headwinds
Halfords saw its revenue drop by 1% to £864.8 million in the first half of its financial year as underlying pre-tax pre-tax profit fell by 1.4% to £21 million.
On a like-for-like basis, sales edged down 0.1% following a 0.8% uplift at its autocentres division and a 0.7% decline in retail.
Halfords said its focus on margin optimisation was reflected in a market share performance broadly in-line with forecasts.
On a statutory basis, pre-tax profit dropped by 23.3% to £17.8 million.
Graham Stapleton, chief executive of Halfords, said: “I am really pleased with the progress we have delivered in the first half. Against ongoing headwinds, we have continued to focus on controlling the controllables, with a disciplined approach to cost and margin optimisation.
“We are particularly excited by the outstanding results we are seeing from our Fusion Motoring Services programme, which creates a stronger connection between our retail stores and autocentres in a town to fulfil all our customers’ motoring needs.
“Now live across 22 locations, these motoring services locations are delivering phenomenal returns with a significant uplift in both sales and profit. Given the strength of these results, we are now targeting 40 Fusion sites this year. ”
As a business with more than 12,000 employees, Halfords said the measures announced in last month’s UK budget will add around £23 million of direct labour costs, of which only around £9 million was already included in planning assumptions.
“Stapleton added: “The cost implications from the recent UK budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face.
“While we will work hard to mitigate these costs, we urge the government to consider alternative ways of supporting businesses like ours, including the acceleration of Apprenticeship Levy reform, which would help us to upskill existing colleagues and offset some of the new headwinds.”
