Halfords has shrugged off poor weather conditions over the spring and summer months to achieve a substantial expansion in turnover.
Britain’s biggest cycling and motoring services retailer reported a 14.1 per cent jump in revenue for the 20 weeks to 18 August, with like-for-like turnover increasing by 7.8 per cent.
Growth was predominantly driven by its garages business, Autocentres, where sales soared by over a third, as well as orders for needs-based products and services in its motoring retail segment.
Engine of growth: Halfords reported a 14.1 per cent jump in revenue for the 20 weeks to 18 August thanks largely to a very strong performance by its Autocentres business
The Redditch-based company received an additional uplift from its commercial fleet services operation winning a contract to service the entire UK truck and van fleet belonging to parcel carrier Yodel.
By comparison, revenues from cycling, which were already contracting due partly to the end of Covid-related restrictions, continued to dip because of bad weather and sliding consumer confidence.
Although the UK experienced its warmest June on record, the country was also impacted by particularly wet conditions in March and July.
Nonetheless, Halfords managed to grow market share across all categories and ahead of first-year targets set out at a capital markets day event just after Easter.
Graham Stapleton, chief executive of Halfords, hailed the ‘good start to the [fiscal] year’ and the progress the company was making on its ‘long-term plans to become a one-stop-shop for motoring ownership.’
He added that the firm was ‘continuing to do everything that we can to support our customers through the cost-of-living crisis and are determined to offer them unrivalled value.’
To this effect, Stapleton announced the launch of the Dealer or No Dealer campaign, which he said was ‘designed to raise motorists’ awareness of the choice and cost savings available to them for servicing and repairs.’
Last year, the company’s profits took a massive knock from the decision to keep prices affordable for consumers amidst the weaker economic backdrop and added inflationary pressures.
It warned again on Wednesday that first-half underlying profits were set to be lower but be higher year-on-year in the following six months, when it anticipates seeing the majority of benefits from its £30million cost savings programme.
Annual underlying pre-tax earnings are forecast to be £48million to £58million this year, compared to £51.5milion for the 12 months ending March 2023.
Halfords Group shares were 2.8 per cent higher at £1.90 just before trading closed on Wednesday, yet they have contracted by more than half since mid-2021.
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