REG-Halfords Group PLC Halfords Group PLC: Trading update for the 26 weeks to 27 September 2024

HalfordsAnnouncement

22/10/2024 07:15

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   Halfords Group PLC (HFD)
   Halfords Group PLC: Trading update for the 26 weeks to 27 September 2024

   22-Oct-2024 / 07:00 GMT/BST

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   22 October 2024

                               Halfords Group plc

        Trading update for the 26 weeks to 27 September 2024 (“H1 FY25”)

                                        

           “Controlling the controllables” strategy delivering to plan

    

   H1 FY25 performance

    

     • Group like-for-like  (“LfL”) sales  broadly  flat (-0.1%)  vs.  strong
       prior year comparatives (H1 FY24: +8.3%).
     • Expansion in  gross  margin from  price  optimisation and  gains  from
       Better Buying as FX headwinds abate.
     • On track to deliver £30m of targeted full year savings to mitigate  c.
       £35m of expected inflation.
     • The Group  has two  reporting segments:  Autocentres (c.40%  of  Group
       revenue) and  Retail (c.60%,  across Motoring  and Cycling).  Motoring
       across both segments represents c.80% of total sales.

          ◦ Autocentres (ex-Avayler) delivered LfL sales +0.8% against an
            exceptionally strong LfL of +18.0% in H1 FY24. Strong growth in
            Services, Maintenance and Repair but Tyres remained challenging
            with price-conscious customers trading down into budget ranges
            and elevated promotional activity in the premium market. High
            levels of technician wage inflation persisted.
          ◦ Following the UK’s wettest spring since 1986, Retail momentum
            grew through H1 to deliver LfL sales -0.7%. Motoring Products
            proved more resilient than expected. Leisure Cycling remained
            challenging, albeit with a positive reception for our new premium
            bike ranges, while Performance Cycling continued to outperform
            with positive LfLs in Tredz.

     • Lower stock and  strong cash  generation further  improved an  already
       strong balance sheet.
     • Encouraging strategic progress in the period, including:

          ◦ 17 of the 25 Fusion towns originally planned for FY25 have been
            delivered with the remainder due to complete this calendar year,
            improving the garage experience for customers and consistently
            performing ahead of business case.
          ◦ Motoring Loyalty Club continues to resonate reaching over 4
            million members (FY24: 3.4m).
          ◦ Avayler’s landmark contract with Bridgestone reached a key
            milestone in progressing beyond test phase with an imminent pilot
            go-live date scheduled for its first new format site in the US.

    

   Outlook

    

     • Despite  pockets  of  improving  consumer  sentiment,  the  short-term
       outlook remains uncertain, particularly for big ticket,  discretionary
       purchases. Our outlook for FY25 is unchanged.
     • In the second half, our focus remains on optimising our market-leading
       platform in  the  face  of continued  wage  inflation  and  end-market
       variability, positioning us for future growth.
     • As such we are prioritising  investment where we have high  confidence
       in strong  near-term  returns,  including delivery  of  14  additional
       Fusion locations before year-end based on excellent results to date.

    

   Our next scheduled update will be the interim results announcement planned
   for late November 2024.

    

   Graham Stapleton, Chief Executive Officer of Halfords, commented:

    

   “While consumers remain cautious in their discretionary spending
   compounded by uncertainty around the contents of the upcoming Autumn
   Budget, we have continued to focus on controlling the controllables and I
   am pleased with our performance in the first half of FY25. Our services
   and B2B-led strategy has supported Halfords’ growth despite two of our
   core markets remaining significantly below pre-Covid levels, enabling us
   to absorb more than £130m of inflation since FY20 while maintaining a
   strong balance sheet. In this environment we are focused on optimising the
   existing platform to drive near-term returns, while accelerating our
   investment in the Fusion concept to position us for growth in the coming
   years.”

   For further information:

   Investors

   Holly  Cassell,   Director   of   Investor   Relations   &   ESG          
    1 investor.relations@halfords.co.uk

   Media

   Rob Greening / Jane Glover, Sodali & Co.       2 halfords@sodali.com 

   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 377  Halfords stores, two Performance  Cycling
   stores (trading as Tredz), 546  garages (trading as Halfords  Autocentres,
   McConechy’s, Universal, National Tyres and Lodge Tyre) and have access  to
   273 mobile service vans (trading  as Halfords Mobile Expert and  National)
   and 510  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.  Through  its
   subsidiary Avayler, Halfords  also sells the  Group’s bespoke,  internally
   developed software  as a  SaaS solution  to major  clients in  the US  and
   Europe.

    

   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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   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:  TST
   TIDM:           HFD
   LEI Code:       54930086FKBWWJIOBI79
   OAM Categories: 2.2. Inside information
   Sequence No.:   354189
   EQS News ID:    2012885


    
   End of Announcement EQS News Service

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References

   Visible links
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