Halfords shares tumble after technician shortage hits profits
Halfords has warned over profits in the face of worker shortages, sending shares down by more than a fifth in early trading.
The motoring accessories and cycling retailer blamed a shortage of technicians and weak demand for tyres in a downbeat update to investors.
The London-listed firm said it has been “unable to recruit enough skilled technicians” for its autocentres business, limiting growth ahead of the peak season for MOTs.
Graham Stapleton, CEO at Halfords, 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.”
Halfords also said profitability has been knocked by “weakness” in the consumer tyre market for longer than expected.
It was also impacted by a deeper slump in demand for high-ticket items in its retail business, as shoppers tighten their belts.
As a result, the group cuts its pre-tax profit forecast to between £50 million and £60 million, from a previous range of £65 million to £75 million.
The group stressed that it expects demand for tyres to “recover through the course of the year” and has taken actions to help recruit more skilled labour.
It came as the company revealed that total group grew 21.7% in the quarter to December 30 against the same period last year, while like-for-like sales increased 4.6%.
Stapleton added: “We have seen strong revenue growth in what are exceptionally challenging circumstances, and we have continued to grow our market share whilst also tightly managing our costs, inventories and cashflows.
“Consumer demand for our services and needs-based categories, which now account for the majority of our revenue, continues to grow, and our Motoring Loyalty Club is exceeding expectations as customers recognise the value of its unrivalled discounts and offers.”
Shares were down 20.5% at 171.1p in early trading on Thursday.
