Halfords expects first-half profits to double to at least £55m as appetite for cycling products continues and customers opt for safe and convenient motoring services
Halfords says it now expects its first-half profits to come in at more than £55m thanks to continued customer appetite for its cycling and motoring products and services. That’s at least double the first-half profits of £27.5m it reported last year.
The update follows a summer in which the automotive-to-cycling retailer and garage business saw its online sales grow by 160% to account for 54% of total sales, as set out in a trading update of September 8 as its shops initially closed or operated as click and collect points during the Covid-19 lockdown. Since then, says Halfords, the peak cycling and staycation season has come to an end, but in the five weeks to September 25, the momentum has continued in both the cycling (+46%) and motoring (+7.5%) retail categories, while sales at its autocentres are 18% ahead, on a like-for-like basis. The rise in cycling sales, says Halfords, reflects “the strength of our unique proposition and continual improvement in supply to meet unprecedented levels of demand”.
Halfords also says it’s seen strong demand for its services business, both within its stores and in its garages. It is now recruiting hundreds of technicians to staff both its in-store motoring services business mobile expert vans, and its Mobile Expert vans - which it says are used by customers “seeking greater convenience and safety”.
Halfords says it remains cautious about the second half of the year, in the light of the second wave of Covid-19, the end of the furlough scheme and the “very uncertain” outlook for Brexit negotiations.
“The potential impact of second waves of COVID-19 now seems more pronounced than just a few weeks ago, and the economic impact of an end to the furlough scheme and the outcome of Brexit negotiations remains very uncertain,” it said. “We are well placed to address any headwinds we may face and capitalise on the tailwinds as they arise. Our balance sheet and liquidity position remain strong.”
Halfords sells online and via 444 Halfords shops, three Tredz and Giant performance cycling stores, 367 garages and 91 mobile service vans.
Halfords is a Leading retailer in RXUK Top500 research.