REG-Halfords Group PLC Halfords Group PLC: Q3 Trading Update: Financial Year 2022

HalfordsAnnouncement

13/01/2022 07:05

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   Halfords Group PLC (HFD)
   Halfords Group PLC: Q3 Trading Update: Financial Year 2022

   13-Jan-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.

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   13 January 2022

                               Halfords Group plc

                     Q3 Trading Update: Financial Year 2022

    

                Strong Group sales up +10.4% LFL over two years,

    underpinned by an outstanding Autocentres performance through the Q3 MOT
                                     peak.

                                        

   Halfords Group plc ("Halfords" or the "Group"), the UK's leading  provider
   of motoring  and cycling  products and  services, today  announces its  Q3
   trading update for the  13 weeks to 31  December 2021 ("the period").   To
   provide a  better understanding  of  underlying performance,  all  numbers
   unless otherwise stated  are on  a two-year  basis, that  is, compared  to
   FY20. For completeness the table below contains both one-year and two-year
   performance measures.

    

   Headlines

    

     • Exceptional Autocentres performance, growing  +33.1% LFL, driven by  a
       strong Q3 MOT peak,  and our ongoing  investment in digital  platforms
       and building brand awareness.
     • Retail sales were +5.6% LFL, with a strong performance during  October
       and November but a drop-off in  performance in the latter part of  the
       period as the Omicron variant grew in prominence.
     • The Group continues to target  full year underlying profit before  tax
       of £80m to £90m, post IFRS16.
     • The acquisition  of Axle  Group  ("National"), and  associated  equity
       raise, secures  our  position as  the  UK's largest  vehicle  service,
       maintenance and repair business.

    

   Q3 Group revenue summary

    

                          LFL Revenue Total Revenue LFL Revenue Total Revenue
                           Vs FY20 %    Vs FY20 %    vs FY21 %    Vs FY21 %
            Retail           +3.1%        -1.5%       +11.2%        +7.5%
   Motoring
                   Retail    +9.2%        -2.1%       -21.2%       -23.8%
   Cycling
   Retail Total              +5.6%        -1.8%        -5.3%        -8.5%
   Autocentres              +33.1%       +90.2%       +10.7%       +48.1%
   Group                    +10.4%       +13.9%        -2.2%        +2.7%

    

    

   Key Highlights

    

   In 2019, we accelerated our strategy to evolve Halfords into a consumer
   and B2B services-focussed business, with a greater emphasis on motoring,
   generating higher and more sustainable financial returns. Our performance
   across the period has reaffirmed the importance of increasing the mix of
   our business into less discretionary, and more resilient Motoring services
   spend whilst continuing to focus our Retail business on improving overall
   returns.

     • Group revenue growth of  +13.9% vs. FY20 and  +10.4% LFL, driven by  a
       strong Autocentres, Services and B2B performance.
     • We continued to  perform well  in our areas  of strategic  importance,
       with Group Service-Related Sales up +91% and B2B up +60%.
     • We continue to develop a digital  first business, with sales up  +71%,
       delivered through strong traffic to our site and improved conversion.
     • Our investments  in customer  experience continue  and have  delivered
       record NPS scores across the period.
     • In Autocentres;

          ◦ Sales performance was particularly strong, demonstrating the
            quality, convenience and breadth of our offer, and the greater
            resilience of this market.
          ◦ Total sales growth across Autocentres was +90.2% reflecting our
            acquired businesses, coupled with strong performance in our LFL
            business, which grew +33.1%.
          ◦ As communicated at our Interim results in November, the
            Government's MOT deferral programme in H1 FY21 changed the
            seasonal profile of MOTs, creating a new Q3 peak period for the
            Autocentres business.
          ◦ Our Mobile Servicing business continued to perform well, up +72%
            LFL, and our research indicates it was the first business to
            average 4.8 stars from over 200,000 Trustpilot reviews.
          ◦ The integration of our recent acquisition, National, is
            progressing to plan.

     • In Retail:

          ◦ LFL sales grew +5.6%, with total sales -1.8%. Strong sales in the
            first half of the period softened pre-Christmas as the emergence
            of Omicron impacted customer behaviour.
          ◦ LFL growth exceeds total sales growth, reflecting our store
            closure programme during Q4 FY21, designed to deliver a more
            productive and profitable estate.
          ◦ Retail Motoring:

               ▪ Sales were +3.1% LFL and total revenue -1.5%. Market share
                 data continued to show positive trends across key product
                 areas such as Car Cleaning, Oils and Child Travel.
               ▪ We anticipated a softer motoring performance relative to H1
                 driven by our pricing investments and lower staycation
                 sales, but Omicron and the resulting -15% fall in traffic
                 during December contributed to weaker demand and
                 corresponding drop in performance.

          ◦ Retail Cycling:

               ▪ Sales grew by +9.2% LFL but declined -2.1% at a total level.
               ▪ Our own brand Premium Adult bikes performed well, up +20%,
                 as did E-bikes growing over +100%.
               ▪ Our online performance cycling business "Tredz" also
                 performed very well, up +47%.
               ▪ Kids bikes sales started well but softened later in the
                 period. Unexpected freight delays in Junior bikes compounded
                 the impacts of Omicron including lower footfall and general
                 customer caution.

    

   Graham Stapleton, Chief Executive Officer, commented:

    

   "These results demonstrate the strength of our Motoring Services offer,
   and the outstanding performance from our Autocentres business confirms the
   rationale behind our recent acquisitions. With the recent addition of
   National to the Group, Motoring will represent more than 70% of our
   revenue, and we expect to carry out 7.5 million motoring servicing jobs a
   year. We are working hard to continually increase our capacity,
   capabilities, and geographic reach in this area, making it easier and more
   convenient for customers to have a broader range of vehicles serviced than
   ever before at over 1,400 fixed or mobile Motoring Services locations.

    

   "The COVID-19 pandemic has continued to present a number of headwinds and
   put significant pressure on our colleagues, who have navigated their way
   through a variety of challenges and issues. It is their resilience,
   dedication, and expertise that have produced another good set of results,
   and I would like to take this opportunity to thank each and every one of
   them."

    

   Outlook

   We continue to target a full-year underlying profit before tax on a
   post-IFRS 16 basis of £80m to £90m. The Omicron impact seen in December
   shows that the challenges associated with COVID-19 are still present. Our
   guidance assumes that the impacts of Omicron continue to diminish, and
   that we do not experience further variants of similar severity. 

   Looking further ahead, we remain confident that our ongoing strategic
   investment will continue to build resilience and underpin future growth,
   and we look forward to building on our progress to date.

   Enquiries

   Investors & Analysts (Halfords) 

   Loraine Woodhouse, 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

    

    

    

   Analysts Conference Call

   A conference call for analysts will be held today, starting at 08:00am  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 16 June 2022 we will  report our Preliminary results for the  financial
   year ending 1 April 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 404  Halfords stores,  3 Performance  Cycling
   stores (trading  as Tredz  and Giant),  604 garages  (trading as  Halfords
   Autocentres, McConechy's, Universal, National and Iverson) and have access
   to 234 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.:   136251
   EQS News ID:    1268133


    
   End of Announcement EQS News Service

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