7th Nov 2019 10:27
(Alliance News) - Motoring and cycling products retailer Halfords Group PLC on Thursday reported a dip in interim profit, with sales slipping in a tough market.
The firm also rebased its dividend payout from its next financial year onwards.
Pretax profit for the six months to September 27 was GBP27.5 million, 2.5% lower than the year before. The underlying figure declined by 15% to GBP25.9 million. Halfords said profit was in line with expectations.
Halfords's revenue fell 2.9% to GBP582.7 million, and was down 2.4% like-for-like. Within that, Retail revenue fell 3.8%, and 3.1% like-for-like, to GBP500.0 million, while Autocentres revenue rose 3.2%, and 2.1% like-for-like, to GBP82.7 million.
Halfords said that within the core Retail unit, cycling-related sales were higher, but sales of big-ticket discretionary products were lower. Autocentres, group services, online and business-to-business operations also delivered "strong" sales growth.
Halfords declared an interim dividend of 6.18 pence per share, flat year-on-year. However, the final dividend will be 8.0p, meaning a full-year dividend of 14.18p, down from 18.57p a year before.
From financial 2021, Halfords will reset its annual dividend to around 12p per share.
"In a period where retail sales were impacted by weakened consumer confidence, we are pleased to have successfully increased gross margin, kept a tight control over costs, and seen growth from our strategic investment," said Chief Executive Graham Stapleton.
"Twelve months on from the launch of our strategy to inspire and support a lifetime of motoring and cycling, we have made encouraging early progress. Our Autocentres business delivered strong growth in the half, while new initiatives helped to drive top line momentum in group services, online and B2B."
He continued: "We are clear our service-led strategy is the right one for Halfords. Our unique position, growing services business and positive macro-customer trends, gives us confidence that this is the right time to accelerate investment, leveraging our trusted household brand to become a clear market leader in Motoring services."
Looking ahead, Halfords has confirmed financial 2020 guidance for underlying pretax profit between GBP50 million and GBP55 million.
Capital expenditure guidance has been increased by GBP11 million to GBP46 million, in part due to the acquisition of McConechy's Tyre Service Ltd, which Halfords announced in a separate statement on Thursday.
Halfords did not give any other financial details. McConechy's is one of the largest garage chains in the UK, Halfords said, with operations across Scotland and the north of England.
"This acquisition is highly complementary to Halfords' service-led strategy, and the addition of McConechy's further strengthens our growing and unique motoring services offer, which includes Autocentres, Halfords Mobile Expert, and our weFit services in our stores," said CEO Stapleton.
Shares were 0.1% higher on Thursday morning in London at a price of 152.60 pence each.
By George Collard; [email protected]
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