REG-Halfords Group PLC Halfords Group PLC: Capital Markets Day - Leveraging Our Platform

HalfordsAnnouncement

18/04/2023 07:15

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   Halfords Group PLC (HFD)
   Halfords Group PLC: Capital Markets Day - Leveraging Our Platform

   18-Apr-2023 / 07:00 GMT/BST

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   18 April 2023

                               Halfords Group plc

                 Capital Markets Day - Leveraging Our Platform

                                        

   Halfords Group plc ("Halfords" or the "Group"), the UK's leading  provider
   of Motoring and Cycling services and products, is today holding a  Capital
   Markets Day  for institutional  investors and  sell-side analysts.  Graham
   Stapleton, Chief  Executive  Officer,  and other  members  of  the  senior
   management team, will give an update on the Group’s plans to leverage  the
   platform that  has been  built since  2018 and  deliver improved  revenue,
   profit  and   return   on  capital   employed   over  the   mid-term   and
   mid-to-long-term.

   Headlines:

     • Since 2018, our strategy  has seen us evolve  into a consumer and  B2B
       services-focused business, with a greater emphasis on motoring. Across
       that time period, revenue has grown by c.40%1.
     • We have  developed a  unique and  scaled platform,  building a  market
       leading interconnected infrastructure of stores, garages and vans,  at
       the same time as creating a data and digitally-enabled business.
     • This platform differentiates us from  our competitors, and we  believe
       provides  significant  opportunities  for  earnings  growth  over  the
       mid-term and mid-to-long-term.
     • Mid-term:

          ◦ Our focus for the mid-term is on leveraging the platform we have
            built.
          ◦ We expect sales to grow to c.£1.9bn (FY23: c.£1.6bn), PBT to grow
            to £90-£110m (FY23: £50–60m), average annual capex of £50-60m,
            and return on capital employed2 of over 15% in the mid-term.
          ◦ We expect to deliver this growth through a combination of our
            core markets recovering from the current very challenging
            conditions, growing market share by leveraging the unique
            platform we have built, our acquisition synergies maturing, and
            using scaled and rich customer and vehicle data to drive customer
            lifetime value.

     • Mid-to-long-term

          ◦ In the mid-to-long term, we plan to pursue a range of exciting
            strategic growth opportunities.
          ◦ The huge potential of the Halfords brand enables us to expand
            into more areas of the motoring market, creating a one-stop-shop
            for motoring ownership, delivering convenience and value to
            millions of customers.
          ◦ Our scaled infrastructure and investment in colleague training
            enables us to establish a market leading position in the
            servicing of all forms of electric cars, vans, scooters and
            bikes.
          ◦ By building a unique local motoring and cycling multi-channel
            offer, we can seamlessly connect and fully optimise our assets
            within a town.
          ◦ Avayler, our “software as a service” (SaaS) provider for
            automotive companies, is expected to deliver revenue of £25-35m
            and EBIT of £5-8m, as it is rolled-out to more clients.
          ◦ We expect Group sales to grow to c.£2.2bn, PBT to grow to
            £130-£150m, average annual capex of £90-100m, and return on
            capital employed2 of over 20%, as we invest in driving profitable
            revenue growth, and continue scaling our Autocentres business
            over the mid-to-long-term.

     • Our business is underpinned by a  strong balance sheet, and we  expect
       positive free cash  flow throughout  the mid  and mid-to-long-term  to
       keep us within our prudent leverage targets going forward.
     • The Board intend to  propose a final dividend  of 7.0p per share  when
       FY23 full year results are announced,  which would give a total  10.0p
       dividend per share for FY23.
     • Ongoing dividend policy  to target  underlying dividend  cover in  the
       range of 1.5x-2.5x (underlying profit after tax).
     • The Group continues to expect to deliver FY23 underlying profit before
       tax within current guidance.

    

   Graham Stapleton, Chief Executive Officer of Halfords, commented:

   "Since 2018, we have doubled the size of our B2B and services business and
   have become the  UK’s biggest motoring  services provider, increasing  our
   Group sales by c.40%. From here,  we see significant potential for  future
   growth, both in  our existing  business and  in adjacent  markets. We  are
   today providing  a  clear  roadmap  for  the  mid-term,  as  we  focus  on
   leveraging the  unique  platform that  we  have  built. We  will  also  be
   outlining the exciting longer-term strategic transformation  opportunities
   that we see ahead as we unlock the enormous potential within the  Halfords
   brand and infrastructure.”

    

   The Capital Markets  Day will be  held in person  for pre-registered  sell
   side analysts and investors at Peel Hunt’s offices, 100 Liverpool  Street,
   London.

   A webcast / dial-in facility is also available on request.

    

   (1) Based on estimated revenue for FY23, pre-audit.

   (2) Return  on  capital employed  defined  as underlying  EBIT  /  capital
   employed (including goodwill, pre-IFRS16)

    

   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

    

   Notes to Editors

   www.halfords.com                                www.avayler.com           
     1 www.tredz.co.uk   2 www.halfordscompany.com                     

   Halfords is the UK's leading provider of motoring and cycling services and
   products. Customers shop  at 394  Halfords stores,  2 Performance  Cycling
   stores (trading  as Tredz  and Giant),  650 garages  (trading as  Halfords
   Autocentres, McConechy’s, Universal, National  Tyres and Lodge Tyres)  and
   have access to 264 mobile service vans (trading as Halfords Mobile Expert,
   Tyres on the Drive  and National) and 473  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.

    

   Forward looking statements

   This announcement is not  intended to and does  not constitute and  should
   not be construed as, considered a part of, or relied on in connection with
   any information or  offering memorandum, security  purchase agreement,  or
   offer, invitation  or recommendation  to underwrite,  buy, subscribe  for,
   otherwise acquire, or sell any  securities or other financial  instruments
   or interests or any other transaction.

   This announcement contains certain forward-looking statements with respect
   to the  financial condition,  results of  operations and  business of  the
   Group and  certain  plans  and objectives  with  respect  thereto.   These
   forward-looking statements can be identified by the fact that they do  not
   relate only  to historical  or current  facts. Forward-looking  statements
   often use  words such  as  "anticipate", "target",  "expect",  "estimate",
   "intend", "plan", "goal", "believe",  "hope", "aims", "continue",  "will",
   "may", "should", "would",  "could", or  other words  of similar  meaning. 
   These statements  are based  on assumptions  and assessments  made by  the
   Group in light of its experience and its perception of historical  trends,
   current conditions,  future  developments  and  other  factors  the  Group
   believes appropriate. By their nature, forward-looking statements  involve
   risk and  uncertainty,  because  they  relate  to  events  and  depend  on
   circumstances that will occur in the  future and the factors described  in
   the context  of such  forward-looking statements  in this  document  could
   cause actual  results and  developments to  differ materially  from  those
   expressed in or implied by  such forward-looking statements.  Although  it
   is believed  that  the  expectations  reflected  in  such  forward-looking
   statements  are  reasonable,   no  assurance  can   be  given  that   such
   expectations will  prove  to  have  been correct  and  you  are  therefore
   cautioned not to place undue reliance on these forward-looking  statements
   which speak only as at the date  of this annoncement.  The Group does  not
   assume any obligation to  update or correct  the information contained  in
   this announcement (whether as a  result of new information, future  events
   or otherwise), except as required by applicable law.

   There are  several factors  which  could cause  actual results  to  differ
   materially from those expressed or implied in forward-looking statements. 
   Among the factors  that could  cause actual results  to differ  materially
   from those described in the forward-looking statements are changes in  the
   global, political, economic, business, competitive, market and  regulatory
   forces, future  exchange and  interest  rates, changes  in tax  rates  and
   future business combinations or dispositions.

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   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:           GB00B012TP20
   Category Code:  UPD
   TIDM:           HFD
   LEI Code:       54930086FKBWWJIOBI79
   OAM Categories: 2.2. Inside information
   Sequence No.:   237437
   EQS News ID:    1609589


    
   End of Announcement EQS News Service

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