Halfords expects full-year profits at top end of range

In an update to the City this morning, the cycling and autocentre retailer said results for the financial year 2020 had been boosted by better than expected sales during the lockdown. It said it expected profit before tax to be at the upper end of its guided range of £50m to £55m.

While group sales for the four weeks to May 1 were 23% below the same period on a like-for-like basis, Halfords said this was “better than we initially anticipated” and had been driven by stronger results in cycling as customers “explored alternatives to public transport and for ways to stay healthy”.

The retailer’s motoring arm showed “overall weakness reflected [by] a significant reduction in car journeys” during the lockdown period.

Halfords said it currently has £159m worth of total liquidity available to it, including overdraft facilities from lending banks. However, the retailer warned it would continue to take actions necessary to preserve cash as it looked towards the next phase of easing lockdown.

The retailer also confirmed the sale of 11 Cycle Republic stores to Pure Scooters and said 85 roles would transfer. It said the exceptional cost of between £25m and £35m it previously announced would not be affected by the sale.

Chief executive Graham Stapleton said: “The health and safety of our colleagues and our customers remain our top priority. I am immensely proud of all our colleagues for their continued hard work and dedication to help keep the country moving.

“There may be fewer journeys now but those that are undertaken are even more important. As the UK’s largest provider of motoring and cycling products and services, we take our responsibility to keep the country moving seriously. We remain focused on providing essential services during the lockdown, supporting key workers, including serving over 21,000 NHS frontline workers so far, as well as the wider population who need to travel. Cycling has provided commuters with an important alternative to public transport and consequently, we have seen significant growth within our Cycle2Work programme, cementing our position as the market-leading business in this segment.

“Whilst trading since our last update at the end of March has been better than anticipated, driven by a strong performance in cycling, considerable uncertainty remains and as such, we continue to take all necessary measures to preserve cash and protect our financial position. I am confident the actions we are taking now will put the business in a strong position when we emerge from the crisis and enable us to continue to deliver on our strategic transformation in the medium term”.