5th Jun 2015 10:00
LONDON (Alliance News) - Halfords Group PLC Friday reported growth in profit in its recently-ended financial year as revenue hit the GBP1 billion mark for the first time, driven by a strong performance in both its Retail and Autocentres divisions, and it said its customer experience strategy is progressing well.
The FTSE 250-listed car parts and bicycle retailer reported a pretax profit in the 53 weeks to April 3 of GBP83.8 million and GBP80.8 million in the 52 weeks to March 27, up from the GBP72.6 million reported in the 52-week period the prior year, as revenue rose to GBP1 billion from GBP939.7 million, a 6.9% increase in the 52 weeks.
Halfords said its accounts are prepared for the period up to the Friday closest to March 31 each year. Consequently, the statement for its recently-ended financial year covers the 53 weeks to April 3, 2015, while the comparative period covered the 52 weeks to March 28, 2014. It said the extra week was a significant trading period for the group, representing pre-Easter in Retail and a key week of the MOT season in Autocentres.
Revenue grew in both its Retail and Autocentres divisions, Halfords said, with sales in the 52 weeks up 6.8% and 7.6%, respectively, reflecting improvements made in the range of products and brands available, customer-centric offers, colleague engagement and training.
Retail sales grew to GBP875.1 million in the 53-week period and GBP857.9 million in the 52 weeks, up from GBP803.1 million in the 52 weeks of the prior year. Autocentres sales grew to GBP150.3 million in the 53-week period and GBP147 million in the 52 weeks, up from GBP136.6 million in the 52 weeks of the year before.
Within Retail, weather conditions were favourable for Cycling during the summer and for Car Maintenance during the fourth quarter, Halfords said.
Halfords will pay a dividend of 16.5 pence, up 15.4% from the 14.3p paid the year before.
"We are delighted to have exceeded GBP1 billion of group revenue, a year ahead of plan, and are building a sustainable platform for future growth. At the very core of our strategy is customer service and investment in our colleagues, our proposition and our infrastructure. In Retail, colleagues progressed well through their Gear 2 training, customer satisfaction scores rose, we have more refreshed stores and launched Cycle Republic and we strengthened our authority in our core categories. Autocentres has a clear strategy under new leadership, but whilst it has delivered an improved sales performance, there is room for improvement," Chairman Dennis Millard said in a statement.
"There still remains much to do in both Retail and Autocentres and 2016 will be a particularly busy year of activity and investment as we continue to focus on driving the top-line and rolling out our Getting Into Gear strategy," Millard added.
Halfords' Getting Into Gear strategy is an initiative designed to enhance customer experience, including employee training, investing in the store estate and creating a service-led digital proposition.
Under the strategy, it launched a 3-Gears training programme aimed at increasing colleague loyalty, engagement and product knowledge and expertise. By the end of the financial year, nearly all store employees had attained Gear 1 accreditation, 46% had qualified for Gear 2, and over 300 members of staff reached Gear 3 level. By the end of the current financial year, Halfords aims to have 80% of employees at Gear 2 or Gear 3 level in most stores.
Halfords said it plans to open between 10 and 15 autocentres in the new financial year, on top of the 305 currently open.
Analysts were encouraged by Halfords' results with Investec saying that its pretax profit before non-recurring items was 3% ahead of consensus, and that the increase in dividend reflects "confidence in future growth and cash generation".
Shares in Halfords were trading up 1.3% at 490.70 pence Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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