6th May 2020 11:52
(Alliance News) - Halfords Group PLC said Wednesday its stores have remained open during the national lockdown in the UK, and it has seen better-than-expected sales.
Shares in the motoring and cycling product retailer were 19% higher in London in mid-morning trade at 137.00 pence.
For the year the ended March 29, Halfords expects to report adjusted pretax profit at the upper end of its guided range of between GBP50 million and GBP55 million.
"As a provider of essential products and services to the UK public, we have remained open during the lockdown period. We currently have 325 retail stores open on a dark-store basis, where serving customers from the front of the store ensures our colleagues can operate in safe working conditions. We also have 346 garages open and 77 mobile vans operating," Halfords said.
In the four weeks to May 1, however, the retailer's like-for-like group sales were down 23% year on year. But, Halfords noted, this was better than expected.
"This was fairly consistent across the period and reflected a strong performance in Cycling, as the public explored alternatives to public transport and looked for ways to stay healthy. In Motoring, essential categories such as batteries and battery care performed well, but overall weakness reflected a significant reduction in car journeys during the lockdown period," it said.
As a result of the better-than-expected trading, Halfords said its liquidity has improved. On May 1, the retailer had about GBP159 million of funds available, including overdraft facilities. Still, Halfords said it will continue to look for ways to preserve cash as the "severity and duration" of the pandemic remains "very uncertain".
Chief Executive Graham Stapleton said: "There may be less journeys now, but those that are undertaken are even more important. As the UK's largest provider of motoring and cycling products and services, we take our responsibility to keep the country moving seriously.
"We remain focused on providing essential services during lockdown, supporting key workers, including serving over 21,000 NHS front line workers so far, as well as the wider population who need to travel. Cycling has provided commuters with an important alternative to public transport and consequently we have seen significant growth within our Cycle2Work programme, cementing our position as the market-leading business in this segment."
Halfords noted it has transferred 11 Cycle Republic stores to Pure Scooters Ltd, following a proposal to close the stores. The review of its cycling business, and the expected closure of Cyclic Republic, is expected to cost between GBP25 million and GBP35 million.
Stapleton added: "Whilst trading since our last update at the end of March has been better than anticipated, driven by a strong performance in cycling, considerable uncertainty remains and as such we continue to take all necessary measures to preserve cash and protect our financial position. I am confident the actions we are taking now will put the business in a strong position when we emerge from the crisis and enable us to continue to deliver on our strategic transformation in the medium term."
By Paul McGowan; [email protected]
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