25th Jun 2026 09:06
(Alliance News) - Halfords Group PLC on Thursday reported higher annual profit and sales, beating market expectations, as margin expansion and strong growth across its motoring businesses helped offset cost pressures.
Halfords edged up its dividend in response. It also announced a new board chair.
Shares jumped 14% to 205.50 pence in London on Thursday morning.
The Redditch, England-based motoring and cycling products retailer said underlying pretax profit for the 52 weeks to March 27 rose 4.1% to GBP45.4 million from GBP43.6 million a year earlier.
Excluding a change in accounting treatment for amortisation of acquired intangibles, underlying pretax profit increased by more than 8% to GBP41.5 million from GBP38.4 million.
On a reported basis, Halfords swung to a pretax profit of GBP43.6 million in financial 2026 from a GBP30.0 million loss in financial 2025.
Revenue for the 53-week period to April 3 increased 5.0% to GBP1.80 billion from GBP1.72 billion. On a comparable 52-week basis, like-for-like sales grew 4.8%, with Retail up 4.1% and Autocentres, excluding Avayler, up 5.8%.
Gross margin expanded by 210 basis points to 53%, its highest level in a decade, despite operating cost increases and planned investment.
Return on capital employed improved to 14.2% from 12.6%, while free cash flow totalled GBP25.3 million on a 52-week basis, leaving Halfords with net cash of GBP11.2 million, excluding lease liabilities, compared with GBP10.1 million a year earlier.
Halfords declared a final dividend of 6.0 pence per share, up from 5.8p, lifting the total annual payout by 2.3% to 9.0p from 8.8p.
Chief Executive Officer Henry Birch said: "I am very pleased with the progress we are making in the 'Optimise' phase of our strategy, resulting in the strong results we are announcing today.
"With good sales growth, higher margins and an increased dividend, we are delivering improved shareholder returns alongside a more compelling customer proposition."
The performance was supported by continued momentum in the company's motoring operations. Halfords said its consumer garages business benefited from the rollout of more than 100 Fusion sites, which combine retail stores and garages, with a further 35 planned this year.
In Retail, Halfords said sales increased despite a subdued consumer backdrop, with electric bikes proving a standout performer. The retailer plans to significantly expand its range of electric mountain and hybrid bikes as demand continues to grow.
Looking ahead, Halfords said trading in April, May and June has been strong and expects financial 2027 underlying pretax profit to be around the top end of the upgraded consensus range of around GBP49.0 million from GBP45.3 million, with performance weighted towards the first half.
The company said it has not yet seen any change in customer behaviour stemming from the conflict in the Middle East, although it said it remains mindful of the potential impact on consumer confidence and spending in the second half of the financial year.
Separately, Halfords said that Jock Lennox will join the board as a non-executive director on September 1 and succeed Keith Williams as chair following the annual general meeting on September 10.
Lennox is currently chair of Johnson Service Group PLC and Clarion Housing Group, and previously held senior board roles at Barratt Redrow PLC, EnQuest PLC and Hill & Smith Holdings PLC.
By Eva Castanedo, Alliance News reporter
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