Halfords pumps pre-tax profits up 11.3% as online success drives sales

• Full-year pre-tax profits up 11.3% to £80.8m
• Group sales rise 6.9% to £1bn
• Like-for-like sales up 6.8%
• Group EBITDA rises 8.7% to £109.9m
• Online sales up 14.3%

The bikes and motoring parts retailer revealed full-year pre-tax profits rose 11.3% to £80.8m on a pro-forma basis. Group sales increased 6.9% to £1bn, a year ahead of its plan. Like-for-likes climbed 6.8% in the year to the end of March, while group EBITDA climbed 8.7% to £109.9m.

The retailer is in the middle of a driving through a new strategy – ‘Getting into Gear’ – which includes revamping its stores, updating its online offering and cutting its debt.

The investment in online has paid off with web sales in year up 14.3%.

Chairman Dennis Millard said the group was “delighted” by the sales performance, as it builds a “sustainable platform for future growth”.

He added: “At the very core of our strategy is customer service and investment in our colleagues, our proposition and our infrastructure.”

Gross margins down

It cycling division performed strongly as sales rose 11.4%, while car maintenance revenue was up 8.5%. However, its car enhancement unit reported a 0.5% dip in revenue.

Group gross margin fell by 40 basis points to 53.2%, while total operating costs rose by 5.7%. The risings costs were due to “sales volumes, the logistics transition and investments made in key areas of the business,” Halfords said.

Looking ahead Millard added: “There still remains much to do in both retail and autocentres and FY16 will be a particularly busy year of activity and investment as we continue to focus on driving the top-line and rolling out our Getting Into Gear strategy.”

He also welcomed Halfords’ new chief executive Jill McDonald, who joined from fast-food chain McDonald’s last month.