Halfords Group (LON:HFD), the automotive and leisure products retailer, saw group revenues increase by 4.6% to £831.6m last year with pre-tax profits up by 26.7% to £117.1m and the full year dividend increasing by 25.8% to 20p. The company said it had continued to enjoy strong sales and market share growth in car maintenance and cycling, with overall gross margins increasing by 230 basis points to £54.4%. Elsewhere, a focus on cost saving initiatives will trim £6m from its cost base over the course of 2010. Finally, Halfords’ first acquisition, Nationwide Autocentres, the independent car servicing and repair operator, has been successfully integrated. Shares in the group rose by 4.5% to 522.5p during early trade as investors stamped their approval on the figures.
David Wild, Halfords’ chief executive, said: “Halfords has had an excellent year. As a result of our disciplined growth strategy and a clear focus on the needs of our customers, our business continues to develop strongly. Sales growth in core areas, margin expansion and disciplined cost control has led to the delivery of 25% earnings growth. In addition we made our first acquisition, Nationwide Autocentres, which represents a natural extension of Halfords service proposition in the car aftermarket and is already making a good contribution to the group.”
Looking ahead, Mr wild said the group would continue to expand its core retail business, double earnings from the Autocentre operations over the next three years and harnessing strong cash flow to seek further acquisitions that meet its investment criteria. The aim of this strategy is to deliver sustainable earnings growth over the medium term of, on average, 15% per annum, he said.
“While we remain cautious about the current state of the wider UK economy and immediate outlook for consumer spending, we have a proven strategy, a resilient business, and significant opportunities,” Mr Wild said. “The board is therefore confident that the group will deliver further earnings growth in the year ahead.”
Elsewhere today, the first Halfords Autocentres were launched. The three sites in Derby and one in Solihull previously traded as Nationwide Autocentres, which Halfords acquired in February for £73.2m. The new Halfords Autocentres logo and orange colour scheme have now replaced exterior and interior signage, staff uniforms and customer communications. After a period of trial the new branding will be rolled out across the other 221 autocentres…
