6th Nov 2014 08:19
LONDON (Alliance News) - Bikes to car parts retailer Halfords Group PLC Thursday reported higher profits for the first half of its financial year, driven by sales of cycles and growth in online sales, but its gross margin declined and it raised its cost estimate for the retail business for the full year.
The company reported a pretax profit of GBP49.4 million for the 26 weeks to September 26, up from GBP44.6 million a year earlier, as revenue rose to GBP524.1 million from GBP490.6 million. Like-for-like revenue rose 6.8% in its retail business and 4.4% in its autocentres, which undertake car maintenance.
However, profit margins declined in both businesses, with its autocentres hit as it sold a bigger proportion of low-margin tyres, and its retail business hit by strong sales of lower-margin premium bikes. Retail gross margin fell to 50.6%, from 51.2%, while autocentre gross margin declined to 63.8%, from 65.0%.
Still, Halfords raised its interim dividend to 5.5 pence, from 5.2 pence.
"This was a strong performance against particularly tough comparatives and we are pleased overall with the progress we are making under our Getting Into Gear Retail plan. A strengthened Cycling offer was underpinned by the acquisition of Boardman Bikes whilst Halfords continued to build its Auto credentials with the launch of Car Parts Direct," Chief Executive Matt Davies said in a statement.
Halfords retained its full-year guidance for a 25 to 75 basis point decline in retail gross margin, but said retail operating costs are now set to rise between 5% and 6% in the year, up from its previous prediction of a 4% to 5% rise.
Halfords shares were down 2.0% at 492.80 pence early Thursday.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Halfords