REG-Halfords Group PLC Halfords Group PLC: 20-Week Trading Statement

HalfordsAnnouncement

07/09/2022 07:15

============

   Halfords Group PLC (HFD)
   Halfords Group PLC: 20-Week Trading Statement

   07-Sep-2022 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

   ══════════════════════════════════════════════════════════════════════════

                                                                             

   7 September 2022

                               Halfords Group plc

                  20-Week Trading Update: Financial Year 2023

    

   Full year profit guidance unchanged following good performance across the
   business, and market share gains across Motoring and Cycling products and
                                   services.

    

   Halfords Group plc (“Halfords” or the “Group”), the UK’s leading  provider
   of Motoring and Cycling products and services, today announces its trading
   update for the 20-week period to 19 August 2022 (“the period”).

    

   Overview

    

     • Total revenue growth  of +9.2% vs  FY22 and -1.9%  LFL against  strong
       prior year comparatives (see figure 2), when sales benefited from  the
       UK emerging from the final COVID-19 lockdown.
     • Strong total revenue growth vs FY20, up +30.3%, or up +11.7% LFL, with
       all segments showing LFL growth over 3 years with Autocentres  +28.2%,
       Retail Motoring  +8.5% and  Cycling +9.5%.  Strategic acquisitions  in
       Autocentres are the key driver of total sales growth.
     • Strong progress against  our FY23 strategic  priorities including  the
       growth of our Motoring  Loyalty Club to  500k members, Project  Fusion
       roll out, National Tyres integration  and the scaling of our  Services
       business.
     • Service-related sales represent 42.2% of Group revenues in the period,
       up from 21.9% in FY20.
     • Performance in the period has been in-line with our expectations,  and
       we therefore continue to target full year underlying profit before tax
       (“PBT”) of £65m to £75m.

    

   Graham Stapleton, Chief Executive Officer, commented:

    

   “We  are  working  extremely   hard  to  help   our  customers  with   the
   cost-of-living crisis and have dropped prices across nearly 2,000 motoring
   essentials, ensuring that  products remain accessible  and affordable  for
   all.  Our Motoring Loyalty  Club is also proving  to be extremely  popular
   and has already attracted over half a million members since its launch  in
   March, with  benefits including  MOT  discounts and  a free  10-point  car
   health-check, putting almost £14m of  savings directly back into  members’
   pockets.

    

   We are  also  determined to  do  everything that  we  can to  support  our
   fantastic employees whose tireless work and commitment to going the  extra
   mile for our  customers is  so critical  to our  performance. Among  other
   initiatives, we are announcing today that we are offering free MOTs to all
   of our 10,000+ colleagues.

    

   Over 70% of our  sales now come from  motoring products and services,  and
   the fact that this area of spend tends to be more needs-based rather  than
   discretionary is leading  to a very  resilient Group performance,  despite
   the wider macroeconomic uncertainty.” 

    

   Group revenue summary (fig.1)

    

                                    3-Year vs. FY20 1-Year vs. FY22
            Group financial summary
                                        Growth          Growth
                                     Total    LFL    Total    LFL
            Halfords Group           +30.3%  +11.7%  +9.2%   -1.9%
                      Autocentres   +213.1%  +28.2% +67.8%  +19.4%
            Retail                   +0.4%   +8.9%   -7.1%   -7.1%
            Motoring                 +3.6%   +8.5%   -2.8%   -2.8%
            Cycling                  -3.9%   +9.5%  -12.7%  -12.7%

    

    

   Group LFLs vs FY20 comparisons (fig.2)

    

                                         LFL vs. FY20
                           FY21 20 weeks FY22 20 weeks FY23 20 weeks
            Halfords Group     +5.0%        +16.8%        +11.7%
            Autocentres        -7.6%        +15.5%        +28.2%
            Retail             +7.0%        +17.1%         +8.9%
            Motoring          -28.6%        +11.2%         +8.5%
            Cycling           +59.1%        +24.2%         +9.5%

    

   Group services (fig. 3)

    

                                   % Group Revenue % Group Revenue
                 As at Week 20
                                        FY20            FY23
             Service-Related Sales      21.9%           42.2%
             Product Sales              78.1%           57.8%
             Group                      100%            100%

    

   Autocentres

     • Strong LFL performance of +28.2% vs FY20 and +19.4% vs FY22, driven by
       increased market share, enabled by productivity improvements from  our
       Avayler technology.
     • Total growth of +67.8% vs  FY22 following the acquisition of  National
       Tyres, with the growth vs  FY20 also benefiting from the  acquisitions
       of Universal, McConechy’s and Tyres on the Drive.
     • Autocentres sales represented roughly  a third of  Group sales in  the
       period and  are  expected  to  be  c.50%  higher  than  Cycling  sales
       annually.
     • Tyre market share increased although the tyre market has not recovered
       in line with  expectations and remains  significantly below  pre-covid
       levels.
     • Ongoing growth in demand for electric vehicle servicing, with the
       number of EVs being brought to our garages increasing +116%
       year-on-year.
     • Commercial vehicle business has performed particularly well in the
       period, underpinned by the contracted and therefore more predictable
       nature of its sales.

    

   Retail

     • Trading in-line with  expectations, with LFL  performance of +8.9%  vs
       FY20 and -7.1% vs FY22.
     • Motoring:

          ◦ Revenue +8.5% LFL vs FY20, reflecting increased market share from
            our “Keep on Motoring for Less” pricing initiatives and our
            Motoring Loyalty Club.
          ◦ Revenue -2.8% LFL vs FY22, with growth across needs-based
            categories such as maintenance, offset by lower sales in higher
            ticket discretionary categories such as technology. Our price
            investment has been partially offset by volume growth
          ◦ Continued increases in market share in the period across both
            needs-based and more discretionary markets.

    

     • Cycling:

          ◦ Revenue +9.5% LFL vs FY20 and -12.7% LFL vs FY22, as a result of
            the strong FY22 Q1 comparator (fig 2.). Market share growth has
            partially offset the impact of a declining market, caused by
            reduced discretionary spend.
          ◦ Our Performance Cycling business and Cycle2Work scheme are
            comparatively resilient, -1.0% and +7.9% respectively vs FY22.

    

   Strategic progress

     • Over 500k  Motoring Loyalty  Club Members  recruited since  launch  in
       March 2022 against a target  of 500k to 1 million  by the end of  FY23
       with initial data showing strong cross-shop results from our members.
     • Implementation of Avayler, our  market leading digital platform  which
       underpins our motoring services business, in National Tyres garages on
       schedule to be completed within H1.
     • Synergies from the acquisition of National Tyres on track.
     • Project Fusion  roll-out continues,  launching the  highlights of  our
       omnichannel customer experience  across more  towns. Solution  selling
       training underway  in  Autocentres,  alongside  introducing  car  park
       referral managers.

    

   Outlook

     • Based on trading to date, we  continue to target full year  underlying
       PBT of £65m to £75m, which continues to assume no material changes  in
       the macro-economic environment  or consumer spending  patterns in  the
       remainder of FY23.
     • Good progress  is being  made against  our cost  saving and  inflation
       mitigation targets as communicated at the preliminary results in June.
     • We have good availability  across the Group with  our stock levels  in
       line with expectations.
     • Given the evolving mix  of the Group, we  expect H2 profits to  exceed
       those of H1. This is a result of the seasonality and growing scale  of
       our Autocentres  business,  the  National  Tyres  acquisition  synergy
       profile, and the growth of our needs-based Motoring products business.

    

   Enquiries

   Investors & Analysts (Halfords) 

   Jo Hartley, Chief Financial Officer 

   Richard Guest, Corporate Finance Director  

   Andy Lynch, Head of Investor Relations +44 (0) 7483 457
   415                                                   

    

   Media (Powerscourt) +44 (0) 20 7250 1446

   Rob Greening halfords@powerscourt-group.com

   Nick Hayns

   Elizabeth Kittle

    

   Results presentation

   A conference call for analysts and investors will be held today,  starting
   at 09:00am  UK time.  Attendance is  by  invitation only.  A copy  of  the
   transcript of the call will be available at  1 www.halfordscompany.com  in
   due course. For further details please contact Powerscourt on the  details
   above.

    

   Next trading statement

   On 23 November  2022 we  will report our  interim results  for the  period
   ending 30 September 2022.

    

   Notes to Editors

    

   www.halfords.com                                       2 www.tredz.co.uk  
    3 www.halfordscompany.com                     

    

   Halfords is the UK's leading provider of motoring and cycling services and
   products. Customers shop  at 397  Halfords stores,  3 Performance  Cycling
   stores (trading  as Tredz  and Giant),  606 garages  (trading as  Halfords
   Autocentres, McConechy’s, Universal and National Tyres) and have access to
   253 mobile service vans (trading as  Halfords Mobile Expert, Tyres on  the
   Drive and National) and  192 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.

    

   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.

    

   ══════════════════════════════════════════════════════════════════════════

   ISIN:           GB00B012TP20
   Category Code:  TST
   TIDM:           HFD
   LEI Code:       54930086FKBWWJIOBI79
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   186342
   EQS News ID:    1436895


    
   End of Announcement EQS News Service

   ══════════════════════════════════════════════════════════════════════════

    4 fncls.ssp?fn=show_t_gif&application_id=1436895&application_name=news&site_id=reuters8

References

   Visible links
   1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=dc934a09a1192ec0a1dd5bc4c5b4e7f2&application_id=1436895&site_id=reuters8&application_name=news
   2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=8d9c0d9b41eb2335e0a4ce386dba87e7&application_id=1436895&site_id=reuters8&application_name=news
   3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=dc934a09a1192ec0a1dd5bc4c5b4e7f2&application_id=1436895&site_id=reuters8&application_name=news


============