REG-Halfords Group PLC Halfords Group PLC: 20-Week Trading Update: Financial Year 2024

HalfordsAnnouncement

06/09/2023 07:15

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Halfords Group PLC (HFD)
Halfords Group PLC: 20-Week Trading Update: Financial Year 2024

06-Sep-2023 / 07:00 GMT/BST

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6 September 2023

                                   Halfords Group plc

                                            

                      20-Week Trading Update: Financial Year 2024

                                            

  Strong market share gains across the Group with +7.8% Group LFL revenue performance.

                                            

 

Halfords Group plc (“Halfords”  or the “Group”), the  UK’s leading provider of  Motoring
and Cycling services and products, today announces  its trading update for the 20  weeks
to 18 August 2023 (the “Period”).

 

Headlines

  • Strong trading across the Group with  total revenue up +14.1% driven by  needs-based
    categories, with Autocentres +34.6% and Retail +3.7%.
  • Strong Services and B2B performance accounting for 48% of Group revenue (+6ppts YOY)
    and 29%  (+5ppts  YOY)  respectively,  with B2B  winning  a  significant  nationwide
    contract with Yodel.
  • Market share gains across all categories and in line with expectations as set out at
    our Capital Markets Day (“CMD”) in April.
  • Underlying Services markets remain robust, whilst discretionary categories have been
    softer in Q2 to-date vs Q1.
  • Trading year to date  in line with expectations.  Full underlying profit before  tax
    (“PBT”) expected to be between £48m and £58m(1).

 

Graham Stapleton, Chief Executive Officer, commented:

 

"It’s been a good  start to the year  for Halfords, and our  ongoing focus on  essential
maintenance and servicing is driving a  strong performance in our Autocentre and  Retail
Motoring business. Group Motoring, which now accounts  for over 75% of our total  sales,
is a  resilient sector  and  we’re progressing  with our  long-term  plans to  become  a
one-stop-shop for motoring ownership.

 

“We’re continuing to do everything that we can to support our customers through the
cost-of-living crisis and are determined to offer them unrivalled value. For instance,
our research shows that motorists who use manufacturers’ franchised dealerships can pay
over 50% more for repairs compared with Halfords. With the average cost of car ownership
pushing £300 a month, the last thing hard pressed motorists need, is to pay over the
odds for repairs. That’s why, today, we’re launching a campaign called Dealer or No
Dealer, designed to raise motorists’ awareness of the choice and cost savings available
to them for servicing and repairs, and that any work carried out by Halfords will not
affect their manufacturer warranty.”

 

 
 

Group revenue summary

Group Financial Summary 1-Year vs FY23
                         Total   LFL
Halfords Group          +14.1%  +7.8%
            Autocentres +34.6%  +16.6%
            Retail       +3.7%  +3.4%
       Motoring          +7.7%  +7.5%
        Cycling          -1.7%  -2.7%

 

 

Financial performance:

  • The Group produced  a strong  like-for-like performance of  +7.8%, with  Autocentres
    +16.6% and  Retail +3.4%,  despite the  unfavourable weather  conditions  throughout
    Spring and July to August. 
  • Within Retail, needs-based  products and  services drove  a strong  Motoring LFL  of
    +7.5% whereas the more discretionary areas of Cycling, Car Cleaning and Touring were
    adversely impacted by  unfavourable weather  and low  consumer confidence.  Cycling,
    which now only represents 25% of total revenue, was down -2.7% LFL.
  • Growth in market  share across  all categories  and ahead  of the  year one  targets
    underpinning our CMD projections set out in April.
  • Market conditions were more varied, with Services stronger than CMD assumptions, but
    Tyres, Motoring  products  and Cycling  tracking  behind. Our  strong  market  share
    performance helped mitigate the market under-performance.
  • Group service-related sales accounted for 48% of Group revenue (+6ppts YOY).
  • B2B sales accounted for 29% of Group revenue (+5ppts YOY), with particularly  strong
    performance in Cycle2Work and Commercial Fleet Services.
  • Stock  continues  to  be  well  managed  across  the  business  and  in  line   with
    expectations.

 

Strategic and operational update:

  • Cost and efficiency programme  on track to  deliver year one  target of £30m  across
    product cost and operating cost reductions.
  • Following the Lodge Tyre acquisition in October 2022, our enlarged Commercial  Fleet
    Service business has  won a  significant nationwide contract  - with  Yodel, the  UK
    parcel carrier, providing service support for its entire UK truck and van fleet.
  • Ongoing focus  on  garage  utilisation  has driven  a  year-on-year  improvement  in
    utilisation in every month so far this year. A targeted local marketing approach has
    supported a 40% reduction in the number of under-utilised garages.
  • Our Motoring Loyalty Club is continuing to perform well, now exceeding 2.5m members.
    Club members continue to shop with  greater frequency, and greater spend per  visit,
    at +£266 versus non-club members.

 

Outlook:

  • Trading year to date  in line with expectations  with services remaining robust  but
    discretionary markets softer. Full year PBT expected to be between £48m and £58m(1).
  • As communicated at our FY results in June, we expect our H1 underlying profit to  be
    significantly below last year  due to changes in  the valuation of foreign  exchange
    contracts that are not hedge  accounted, and the fact  that a greater proportion  of
    our targeted £30m  cost savings will  be delivered  in the second  half, helping  to
    offset material cost inflation present throughout FY24.
  • H2 profit  is expected  to be  significantly ahead  of last  year, with  Autocentres
    making up a higher proportion of  Group PBT alongside increased cost and  efficiency
    savings versus FY23.

 

(1) At our Preliminary results presentation in June 2023 we shared our expectation that
PBT would grow in FY24 (from FY23 PBT of £51.5m) and that we were comfortable with the
analyst consensus of £53.3m. Current analyst consensus of PBT is £53.7m, with a analyst
forecasts ranging between £51.0m and £57.7m.

 

Enquiries

Investors & Analysts (Halfords) 

Jo Hartley, Chief Financial Officer 

Neil Ferris, Group Financial Controller  

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

 

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

Rob
Greening                                                                                
      1 halfords@powerscourt-group.com

Nick Hayns

Elizabeth Kittle

 

Results presentation

 

A conference call for analysts followed by  Q&A 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   2 www.halfordscompany.com  in  due course.  For  further  details  please
contact Powerscourt on the details above.

 

Next trading statement

 

On 22 November 2023  we will report our  FY24 Interim results for  the period ending  29
September 2023.

 

Notes to Editors

 

 3 www.halfords.com                                    4 www.avayler.com                
 5 www.tredz.co.uk                    6 www.halfordscompany.com                     

 

Halfords is the  UK’s leading provider  of motoring and  cycling services and  products.
Customers shop at 393  Halfords stores, 2 Performance  Cycling stores (trading as  Tredz
and Giant),  643  garages  (trading as  Halfords  Autocentres,  McConechy’s,  Universal,
National Tyres and Lodge Tyre)  and have access to 264  mobile service vans (trading  as
Halfords Mobile Expert, Tyres on the Drive and National), 479 commercial vans and 5  HME
Cycling 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: 2.2. Inside information
   Sequence No.:   269422
   EQS News ID:    1719551


    
   End of Announcement EQS News Service

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