13th Apr 2016 09:47
LONDON (Alliance News) - Halfords Group PLC shares rose on Wednesday as the company said the recovery of its bicycles business continued in the fourth quarter, with revenue growth across the business.
Halfords shares were up 7.6% to 415.20 pence, one of the best performers in the FTSE 250 mid-morning.
The car parts and bicycles retailer said total revenue for the 11 weeks to April 1 rose 3.2%, leaving total revenue up 1.7% for the 52 weeks to the same date.
Like-for-like revenue grew 2.6% in the fourth quarter and by 1.5% for the full year, Halfords said. Trading on a like-for-like basis improved for the retail portion of its business in the fourth quarter, with like-for-like sales up 3.1% and full-year like-for-like sales up 1.3%.
This included an improvement in cycling sales, which had come under pressure earlier in the financial year. Like-for-like cycling sales rose 1.9% in the fourth quarter, leaving like-for-like sales down 0.9% for the year as a whole.
Cycling has performed well for Halfords in recent years, and this had looked set to continue in the just-ended financial year. First quarter premium bikes sales were up 8.0% and cycle repair sales rose 24%, contributing to 2.0% like-for-like sales growth for the overall cycling division.
This took a turn in the second quarter, however, when like-for-like cycling sales fell 11% against tough comparatives, forcing Halfords to warn total cycling sales for the year would be below expectations.
Halfords attributed the decline in the second quarter to mainstream, rather than premium, bike sales, along with associated parts and accessories. Halfords said this was principally market-driven rather than a company-specific problem, reflecting higher levels of discounting and with poor weather putting off casual cyclists.
Motoring like-for-like sales rose 3.5% in the fourth quarter, leaving like-for-like sales for the year up 2.5%. This came against tough comparatives, Halfords said, and was driven by in-car dashboard cameras, car cleaning products and travel equipment sales.
Autocentres like-for-like sales slowed in the fourth quarter to 1.7%, leaving full-year like-for-like sales up 2.5%.
"This was another good trading performance across the group," said Chief Executive Jill McDonald. McDonald added the company is on track to meet expectations for the full year.
Halfords maintained its expectation for pretax profit for the year to April 1 of GBP78 million to GBP82 million, down from GBP83.8 million reported a year earlier, though the 2015 financial year included an extra trading week. Halfords will publish annual results on June 1.
By Sam Unsted; [email protected]; @SamUAtAlliance
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