22
October 2024
Halfords Group
plc
Trading
update for the 26 weeks to 27 September 2024 (“H1 FY25”)
“Controlling
the controllables” strategy delivering to plan
H1 FY25
performance
-
Group like-for-like
(“LfL”) sales broadly flat (-0.1%) vs. strong prior year
comparatives (H1 FY24: +8.3%).
-
Expansion in gross margin
from price optimisation and gains from Better Buying as FX
headwinds abate.
-
On track to deliver £30m
of targeted full year savings to mitigate c. £35m of expected
inflation.
-
The Group has two
reporting segments: Autocentres (c.40% of Group revenue) and Retail
(c.60%, across Motoring and Cycling). Motoring across both segments
represents c.80% of total sales.
- Autocentres (ex-Avayler) delivered
LfL sales +0.8% against an exceptionally strong LfL of +18.0% in H1
FY24. Strong growth in Services, Maintenance and Repair but Tyres
remained challenging with price-conscious customers trading down
into budget ranges and elevated promotional activity in the premium
market. High levels of technician wage inflation
persisted.
- Following the UK’s wettest spring
since 1986, Retail momentum grew through H1 to deliver LfL sales
-0.7%. Motoring Products proved more resilient than expected.
Leisure Cycling remained challenging, albeit with a positive
reception for our new premium bike ranges, while Performance
Cycling continued to outperform with positive LfLs in
Tredz.
-
Lower stock and strong
cash generation further improved an already strong balance
sheet.
-
Encouraging strategic
progress in the period, including:
- 17 of the 25 Fusion towns originally
planned for FY25 have been delivered with the remainder due to
complete this calendar year, improving the garage experience for
customers and consistently performing ahead of business
case.
- Motoring Loyalty Club continues to
resonate reaching over 4 million members (FY24: 3.4m).
- Avayler’s landmark contract with
Bridgestone reached a key milestone in progressing beyond test
phase with an imminent pilot go-live date scheduled for its first
new format site in the US.
Outlook
-
Despite pockets of
improving consumer sentiment, the short-term outlook remains
uncertain, particularly for big ticket, discretionary purchases.
Our outlook for FY25 is unchanged.
-
In the second half, our
focus remains on optimising our market-leading platform in the face
of continued wage inflation and end-market variability, positioning
us for future growth.
-
As such we are
prioritising investment where we have high confidence in strong
near-term returns, including delivery of 14 additional Fusion
locations before year-end based on excellent results to
date.
Our next scheduled update
will be the interim results announcement planned for late November
2024.
Graham
Stapleton, Chief Executive Officer of Halfords,
commented:
“While
consumers remain cautious in their discretionary spending
compounded by uncertainty around the contents of the upcoming
Autumn Budget, we have continued to focus on controlling the
controllables and I am pleased with our performance in the first
half of FY25. Our services and B2B-led strategy has supported
Halfords’ growth despite two of our core markets remaining
significantly below pre-Covid levels, enabling us to absorb more
than £130m of inflation since FY20 while maintaining a strong
balance sheet. In this environment we are focused on optimising the
existing platform to drive near-term returns, while accelerating
our investment in the Fusion concept to position us for growth in
the coming years.”
For
further information:
Investors
Holly
Cassell, Director of Investor Relations &
ESG
investor.relations@halfords.co.uk
Media
Rob
Greening / Jane Glover, Sodali & Co. halfords@sodali.com
Notes
to Editors
www.halfords.com
www.avayler.com
www.tredz.co.uk
www.halfordscompany.com
Halfords is the UK’s
leading provider of motoring and cycling services and products.
Customers shop at 377 Halfords stores, two Performance Cycling
stores (trading as Tredz), 546 garages (trading as Halfords
Autocentres, McConechy’s, Universal, National Tyres and Lodge Tyre)
and have access to 273 mobile service vans (trading as Halfords
Mobile Expert and National) and 510 commercial vans. Customers can
also shop at halfords.com and tredz.co.uk for pick up at their
local store or direct home delivery, as well as booking garage
services online at halfords.com. Through its subsidiary Avayler,
Halfords also sells the Group’s bespoke, internally developed
software as a SaaS solution to major clients in the US and
Europe.
Cautionary
statement
This report contains
certain forward-looking statements with respect to the financial
condition, results of operations, and businesses of Halfords Group
plc. These statements and forecasts involve risk, uncertainty and
assumptions because they relate to events and depend upon
circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. These forward-looking statements are made only as at
the date of this announcement. Nothing in this announcement should
be construed as a profit forecast. Except as required by law,
Halfords Group plc has no obligation to update the forward-looking
statements or to correct any inaccuracies therein.