Halfords is posting strong sales growth despite inclement weather deterring cyclists

Halfords has weathered the poor weather conditions of the spring and summer months unscathed, resulting in a significant increase in sales.

Britain’s biggest retailer of bike and car services reported a 14.1 percent jump in sales for the 20 weeks to August 18, with like-for-like sales up 7.8 percent.

The growth was primarily driven by the Autocenters workshop business, where sales increased by more than a third, and by orders for needs-based products and services in the automotive retail segment.

Growth engine: Halfords reported a 14.1 per cent jump in sales in the 20 weeks ended August 18, largely due to a very strong performance from its Autocentres business

The Redditch-based company received an additional boost from its commercial fleet services operation, winning a contract to service parcel service provider Yodel’s entire UK fleet of trucks and vans.

By comparison, revenue from cycling, already falling in part due to the end of Covid-related restrictions, continued to fall due to bad weather and falling consumer confidence.

Although the UK experienced the warmest June on record, the country was also hit by particularly wet conditions in March and July.

Nonetheless, Halfords managed to increase its market share in all categories and exceed the targets for the first year, which were set at a capital markets event just after Easter.

Graham Stapleton, managing director of Halfords, welcomed the “good start”. [fiscal] year” and the progress the company is making towards its “long-term plans to become a one-stop shop for motor vehicle ownership”.

He added that the company “continues to do whatever we can to support our customers through the cost of living crisis and is committed to providing them with unrivaled value.”

To that end, Stapleton announced the launch of the “Dealer or No Dealer” campaign, which he said aims to “raise motorists’ awareness of the choices and cost savings available to them when it comes to maintenance and repairs.”

Last year, the company’s earnings were severely impacted by a decision to keep prices affordable for consumers amid a weakening economic environment and additional inflationary pressures.

On Wednesday, the company again warned that adjusted profits would come in lower in the first half, but look set to be higher year-on-year in the following six months, when the company expects the greatest benefit from its £30m cost-savings programme.

Adjusted annual profit before tax is expected to be between £48m and £58m this year, compared with £51.5m in the 12 months to March 2023.

Shares in Halfords Group rose 2.8 percent to £1.90 just before the close on Wednesday but are down more than half since mid-2021.