Halfords faces £7.5 million charge following the collapse of Focus DIY
The non-recurring expense will be recognised in the financial year ending April 2011 and arises from lease guarantees made by Halfords prior to July 1989. The guarantees were provided to landlords of properties leased by Payless DIY, now part of Focus DIY, when both Halfords and Payless DIY were under the ownership of the Ward White Group.
The charge has come into effect following the winding down of Focus DIY by the administrator Ernst & Young and the subsequent failure to find an overall buyer.
Halfords said: “It is anticipated that the cash outflow relating to the guarantees will be incurred over the next three years. The group is taking mitigating actions to reduce these liabilities.”
The announcement follows the news last month that the Halfords Autocentre division is beginning to reap the benefits of the recent rebrand and centre refurbishment programme.
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