Halfords profits up 7.2% but retail sales remain tough

For the year to April 1, sales were up 4.6% to £869.7m, following the first full year of the Autocentres integration.

In the retail arm, like-for-like sales for the year fell 5.5%. Sales performance was also affected by one-off factors such as supply issues from the Far East following the Chinese New Year, reduced availability during the commissioning of our new distribution centre and the product balance in its bike range.

Halfords.com reported strong sales, up 36.4%, and now represents 9.2% of total retail sales.

Halfords said current trading within retail developed in its fourth quarter in the leisure category and into the 2012 financial year. Like-for-like sales in the 9 weeks to June 3 were up 0.8%, driven by a strong performance in leisure, up 11.1%, but offset by declines in car enhancement (-10.6%) and car maintenance (-3%). The timing of Easter benefited retail sales over the period by 1.5%.

Chief executive David Wild said: “This has been a challenging year for customers. Nonetheless we have increased profits through a clear focus on costs and margins. The group has also made significant operational progress through the successful completion of change initiatives, including reconfiguration of the group’s warehouses and distribution network, remodelling staffing structures and the rebranding and relaunch of our Autocentres business.

“Although these initiatives were achieved at some impact on sales during the transition period, they have enhanced customer service, reduced costs and provide a strong platform for our next phase of growth.

“We are pleased with the positive trend in early weeks’ sales that benefited from good weather and the late Easter. While the tough trading environment is likely to continue, we seek to build on this momentum through our clear strategy that delivers value for customers by a combination of great prices, expert service and innovative products with appropriate margin investment. Our plans are supported by the launch of our new campaign “that’s helpful that’s halfords” which reinforces our unique service proposition.”