Halfords first-half profits drop after 'disappointing' cycling performance

Pre-tax profit fell 5.9% to £46.4m for the half ended October 2, while group revenues edged up 1.8%.

Retail like-for-likes increased 1.4% during the period, while its Autocentres business recorded a 3.3% jump in like-for-likes.

Cycling like-for-likes were down 2.9% in the first half, which Halfords blamed on a challenging July and August for mainstream bikes.

Sales for this category were hit by strong comparatives, poor weather and discounting across the market, resulting in a 7.9% drop in mainstream bike like-for-like sales.

Halfords chief executive Jill McDonald said: “In the first half the motoring side of the business performed well and in-store service sales grew strongly, reflecting our focus on this key area of differentiation.

“The cycling performance in the second quarter was disappointing and, given the seasonal mix towards cycling during the summer, this contributed to the decline in group profitability for the period.

“Today I am announcing a new group strategy called moving up a gear. After three years of investing to stabilise the foundations, improve service levels and grow sales, Halfords is now a fundamentally strong business, operating in markets with good growth prospects. However, the modernisation process is not yet complete. Under the new strategy we will continue to invest to move from fixing the basics to enabling sustainable growth.”

Halfords added that profit in its next financial year was expected to be broadly unchanged from the current financial year, with growth thereafter.