REG-Halfords Group PLC Halfords Group PLC: 20-Week Trading Update: Financial Year 2022

HalfordsAnnouncement

08/09/2021 07:05

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   Halfords Group PLC (HFD)
   Halfords Group PLC: 20-Week Trading Update: Financial Year 2022

   08-Sep-2021 / 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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   8 September 2021

                               Halfords Group plc

                                        

                  20-Week Trading Update: Financial Year 2022

    

       A strong start to trading delivered within a challenging operating
                                  environment.

                                        

       Strong growth in Motoring across retail stores, garages and vans.

                                        

   Halfords Group plc ("Halfords" or the "Group"), the UK's leading  provider
   of Motoring and Cycling products and services, today announces its trading
   performance for the 20-week period to 20 August 2021 ("the period").

    

   Given the highly unusual sales patterns in the FY21 comparator period, our
   commentary below focusses on revenue growth on a two-year basis, comparing
   FY22 revenue to FY20.  For completeness, the  table below discloses  total
   and LFL growth on both a one-year and two-year basis.

    

   Overview

     • Total sales growth of +18.7% (+16.8% LFL) over two years, driven by:

          ◦ Increased scale of our Autocentres business, taking significant
            share.
          ◦ Growth in Retail Motoring, gaining share and benefitting from
            staycation trends.
          ◦ Strong growth in Retail Cycling in the first half of the period.

     • Exceptional  growth  in  our  areas  of  strategic  importance,   with
       Service-Related Sales +78%, B2B sales +80%  and Online +83%, all on  a
       two year basis.
     • A strong trading performance, despite the well documented  challenging
       operating environment.
     • Good cash generation in the period; balance sheet remains strong.
     • Continue  to  target  full  year  profit  before  tax,  post-IFRS   16
       adjustments, of above £75m.

    

   Graham Stapleton, Chief Executive Officer, commented:

    

   "The first 20 weeks of FY22 delivered a strong trading performance against
   a hugely challenging backdrop. Our motoring business now represents 65% of
   our revenues and continues to go from strength to strength, driven by the
    increased scale of our Autocentres business, the ongoing demand for our
   Halfords Mobile Expert Vans, and by recent staycation trends. Although our
    cycling business is currently impacted by the considerable disruption in
   the global supply chain, as the UK's largest cycling retailer we are well
   positioned to adapt and to serve our customers, and we remain confident in
   the long-term outlook for the cycling market. The strength of our overall
    performance is a clear illustration of the relevance of our service-led
      strategy and gives us the confidence to continue with our investment
        plans. We remain positive on our prospects for FY22 and beyond."

                                        

   Group financial summary     1-Year vs. FY21         2-Year vs. FY20
                           Total Growth LFL Growth Total Growth LFL Growth
   Halfords Group             10.5%       10.8%       18.7%       16.8%
   Retail                      3.7%        7.6%        7.8%       17.1%
   Motoring                   48.2%       52.1%        6.5%       11.2%
   Cycling                    -26.0%      -22.8%       9.9%       24.2%
   Autocentres                43.8%       26.0%       86.2%       15.5%

    

    

    

     • Retail:

          ◦ Total revenue growth of +7.8% and +17.1% LFL on a two-year basis.
            LFL sales were boosted by customer transfer from the planned
            store closures in FY21.
          ◦ Motoring grew +6.5% and +11.2% LFL over two years, driven by
            share gains in key categories. Maintenance and 3B's (Blade, Bulbs
            and Batteries) grew strongly, up +4.3% and +6.9% respectively,
            whilst Touring products performed particularly well, up +53.3%,
            benefitting from staycation trends.
          ◦ Cycling grew strongly, up +9.9% and 24.2% LFL vs FY20, with
            Electric mobility up +115%. The global cycling supply chain
            continues to experience considerable capacity constraints,
            leading to low availability of bikes throughout the period.
            Whilst Kids and Electric bikes have fared better, availability
            has been especially low in the Adult Mechanical category,
            contributing to materially lower growth rates towards the end of
            the period.

     • Autocentres:

          ◦ Total revenue growth of +86.2% and +15.5% LFL on a two-year
            basis, driven by increased scale, improved utilisation, and our
            focus on B2B.
          ◦ Our Halfords Mobile Expert Vans ("HME") grew strongly, up +61.7%
            on a one-year basis, demonstrating the ongoing customer demand
            for this proposition.
          ◦ The supply of technicians to both garages and HME was impacted by
            recruitment challenges and Covid-related absences, which had some
            impact on sales in the period.

     • Ongoing challenging operating environment including:

          ◦ Factory production constraints and raw material inflation.
          ◦ General freight disruption, capacity constraints and cost
            inflation.
          ◦ Supply and recruitment challenges in respect of service
            technicians and HGV drivers.

    

   Outlook

   We expect many  of the cycling  supply chain issues  referred to above  to
   continue for some time  albeit, as the UK's  largest cycling retailer,  we
   are well  positioned  to navigate  these  challenges. Conversely,  we  are
   targeting strong growth in our  Services and B2B businesses, alongside  an
   improved Retail Motoring performance. We plan to continue investing in the
   initiatives highlighted in our FY21  Preliminary results on 17 June  2021.
   These include an  investment in  Retail Motoring  pricing, Project  Fusion
   trials, which  seek  to deliver  a  seamless, convenient,  and  consistent
   experience to our customers  across a town,  our Motoring Loyalty  scheme,
   and scaling our network of garages and vans. We continue to target a  full
   year profit before tax of above £75m on a post IFRS-16 basis.

    

    

   Notice of results

   Our Interim results announcement is on 10 November 2021.

    

    

   Enquiries

   Investors & Analysts (Halfords) 

   Loraine Woodhouse, Chief Financial Officer  

   Neil Ferris, 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

   Lisa Kavanagh

   Harold Amoo

    

   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.

    

    

   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 404  Halfords stores,  3 Performance  Cycling
   stores (trading  as Tredz  and Giant),  374 garages  (trading as  Halfords
   Autocentres, McConechy's  and Universal)  and have  access to  166  mobile
   service vans (trading as  Halfords Mobile Expert and  Tyres on the  Drive)
   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.

    

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   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.:   121674
   EQS News ID:    1231857


    
   End of Announcement EQS News Service

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