REG-Halfords Group PLC Halfords Group PLC: FY20 40-week trading update

HalfordsAnnouncement

16/01/2020 07:05

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   Halfords Group PLC (HFD)
   Halfords Group PLC: FY20 40-week trading update

   16-Jan-2020 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   16 January 2020

                                                                             

                               Halfords Group plc

                             FY20 Q3 Trading Update

    

   Halfords Group  plc, the  UK's leading  provider of  motoring and  cycling
   products and services, today updates the market on its trading performance
   for the 14-week period to 3 January 2020 ("the period").

    

                                                
                                                      Year-to-date
                                               Q3
                                                       (40 weeks)
                                           (14 weeks)
                                                        % change
                                            % change
             TOTAL REVENUE                                  
             Halfords Group                  +4.6%       -0.2%
             Retail                          +0.6%       -2.2%
                           Autocentres       +31.2%      +12.9%
                                                            
             LIKE-for-LIKE ("LFL") REVENUE                  
             Halfords Group                  +1.3%       -1.2%
                            Retail           +0.8%       -1.8%
                            Motoring         -2.7%       -4.5%
                            Cycling          +5.9%       +2.1%
             Autocentres                     +4.6%       +2.9%

    

   A solid sales performance in the period, with positive LFL growth in both
   Retail and Autocentres, alongside continued gross margin growth and tight
   cost control; reaffirming full year profit guidance of £50-55m. 

    

     • Group revenue was up +4.6% and +1.3% LFL in the period on the back  of
       a strong Cycling performance and  continued growth in Autocentres  and
       B2B.
     • Retail Cycling sales were up +5.9% LFL in the period, with growth
       broadly based across the bike categories. Our work to optimise the
       cycling space in our retail stores together with a more innovative and
       differentiated range has created a better shopping experience for our
       customers during the peak holiday period. This in turn has delivered
       strong sales growth as well as better margins and reduced working
       capital levels. 
     • Retail Motoring sales were down -2.7% LFL, an improvement on the first
       half.  We continued to take share in our core Motoring categories in a
       challenging market, with low levels of consumer confidence  continuing
       to impact big-ticket discretionary  categories such as Technology  and
       Workshop. There  has  been  no  incremental  sales  benefit  from  the
       weather, with a  mild winter  so far,  similar to  last year.  Despite
       this, we still  managed to grow  our 3Bs business  (bulbs, blades  and
       batteries),  demonstrating  the  improvements  we  have  made  to  our
       customer offer. 

     • Autocentres sales growth accelerated, with LFL up +4.6%.  In addition,
       the recent acquisitions of McConechy's and Tyres On The Drive
       performed in line with expectations as we work to integrate them into
       the Halfords Autocentres business. This mix of organic and acquired
       growth drove our Motoring Services business forward, in line with our
       strategy to become a Services-focussed business.  
     • As we continue to execute our Services-focussed strategy, Group
       service-related revenue grew 16% in the period, and now accounts for
       27% of total Group sales.
     • Group online sales grew +27% with around 80% of Halfords.com orders
       collected in store. Our new web platform remains on track to launch in
       Q4, which will significantly improve the digital experience and, for
       the first time, allow customers to access an integrated services offer
       across stores, garages and mobile through one website. 
     • Sales growth in B2B accelerated in Q3, up +32% year-on-year and now
       accounts for 16% of Group sales.
     • Our new Financial Services proposition continues to perform well,
       attracting new customers to Halfords and driving year-on-year sales
       growth. 

    

   Financial outlook

   Alongside a solid sales performance, the Group has delivered continued
   gross margin growth. Good product ranging and innovation has negated the
   need for either heavy or early discounting. Further margin upside was
   delivered through service revenues attached to product sales. In addition,
   we have remained focused on tight cost control and improved operational
   efficiencies, with underlying operating expenditure in line with the
   previous year, despite upward cost pressures.

    

   As a result of these actions, we reconfirm our expectation that FY20
   underlying profit before tax, on a pre-IFRS 16 and 52-week basis, will be
   in the range of £50m to £55m.

    

   Graham Stapleton, Chief Executive Officer, commented:

    

   "I am pleased with our overall performance in Q3, with total revenue
   growing nearly 5% in the quarter.  Our results reflect the positive
   actions we have taken across the Group to deliver on our strategy,
   particularly Motoring Services, which grew strongly.

    

   Within Retail, Cycling performed particularly well, as customers responded
   to our innovative product ranges and differentiated proposition. 
   Approximately 85% of our bike range is unique to Halfords, including our
   successful partnership with Disney and the development of an innovative
   range with Trunki, both of which helped to sell a record number of Kids
   bikes in the period. In addition, our ability to provide customers with a
   unique, free, build and storage offer was met with strong demand, as we
   built 86,000 bikes in the week before Christmas.

    

   As National Garage Chain of the Year in 2019, Autocentres has continued to
   demonstrate good sales growth, organically and through acquisition, and
   remains well on track to deliver a 3rd year of profit growth.

    

   Though pleased with our performance, market conditions remained subdued
   and we are not anticipating a near-term improvement. We will continue to
   focus on improving our customer proposition, building our services
   business and managing our costs and operations tightly. In the context of
   the current retail market I am pleased to be reporting a positive L4L
   performance and to reconfirm profit guidance for the full year."

    

   Enquiries

    

   Investors & Analysts (Halfords)             
   Loraine Woodhouse, Chief Financial Officer  
   Neil Ferris, Corporate Finance Director    +44 (0) 7483 360675

    

   Media (Tulchan Communications) +44 (0) 207 353 4200

      Jonathan Sibun

      Will Smith

    

   Notes

    1. Like-for-like sales represent revenues from Retail stores, Autocentres
       and Group websites  that have traded  for at least  a year  (excluding
       prior year sales from Retail stores or Autocentres closed in the year)
       at constant foreign exchange rates.

    

   Conference Call

   There will be a conference call for investors and sell-side analysts
   beginning at 09.30am today (UK time). The participant dial-in is +44 (0)
   333 300 0804 or 0800 358 9473 (toll free). The PIN is 89436943#.  To
   access a recording of the call, the participant dial-in is +44 (0) 333 300
   0819 or 0800 358 2049 (toll free). The pin is 301307628#. A transcript of
   the call will appear online in due course.

    

   Reporting Calendar

   On 2 June 2020 we will report our annual results for the 53 weeks ending 3
   April 2020 along with an update on our plans for FY21.

    

   Notes to Editors

    

    1 www.halfordscompany.com             
    www.halfords.com                           
      2 www.halfordsautocentres.com     

    3 www.cyclerepublic.com                           4 www.boardmanbikes.com
                             5 www.tredz.co.uk           

    6 www.mcconechys.co.uk  www.tyresonthedrive.com

    

   Halfords is the UK's leading provider of motoring and cycling products and
   services. Customers shop  at 448 Halfords  stores, 26 Performance  Cycling
   stores (trading as Cycle Republic, Tredz, Boardman and Giant), 373 garages
   (trading as  Halfords  Autocentres and  McConechy's)  and 75  mobile  vans
   providing  tyre  fitting  and  servicing.  Customers  can  also  shop   at
    7 halfords.com, cyclerepublic.com and  tredz.co.uk for  pick-up at  their
   local store or direct  home delivery, as well  as booking garage  services
   online     at      halfordsautocentres.com,      mcconechys.co.uk      and
   tyresonthedrive.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.

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   ISIN:           GB00B012TP20
   Category Code:  QRT
   TIDM:           HFD
   LEI Code:       54930086FKBWWJIOBI79
   OAM Categories: 1.2. Half yearly financial reports and audit
                   reports/limited reviews
   Sequence No.:   40813
   EQS News ID:    954529


    
   End of Announcement EQS News Service

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