Halfords group delivers 13% profit before tax growth
Multichannel operations and reduction in costs delivers progress
In its interim results for the 26 weeks to 1st October 2010. Halfords group reported revenue of £456.3m, up 7.3% with like-for-like sales decreasing by 4.9%.
Operating profit was up 11.5% to £69.1m representing 15.1% of sales (2009: 14.6%). Profit before tax was £68.7m, up 12.8%.
The Group has seen sales and market share growth in Car Maintenance, Premium Cycling and Outdoor Leisure.
Multi-channel accounts for c.9% of total revenue after further strong growth.
David Wild, Chief Executive, commented on the results,"This has been a period of considerable progress for the Group. In addition to increasing profits, we have successfully completed a number of significant change initiatives. These include the reconfiguration of the Group's warehouse and distribution network, the remodelling of staffing structures and the closure of our Central European operations. In total these reduce costs, enhance customer service and provide a strong platform for our next phase of growth that will be clearly focussed in the UK. We are also pleased to have concluded the refinancing of the Group's debt arrangements on favourable terms.
Our Autocentres business has made good progress, gaining market share. Our development plan is on track with 15 new centres to be opened and the entire network to be re-branded Halfords Autocentres by the end of the financial year. In Spring 2011 we will launch a national advertising campaign to drive sales and firmly position Halfords as the UK's leading independent operator in garage servicing and auto repair. We remain enthusiastic about our investment in this adjacent sector and the opportunity it provides for further profitable growth.
During this period we have demonstrated that Halfords is a resilient and cash generative business that can adapt to our customers' changing needs and deliver growth initiatives for the future. Consumer spending is clearly under pressure and we believe this environment will continue into 2011. We hold market-leading positions however and remain confident that our strategy will deliver long-term sustainable earnings growth.
In the six weeks since the end of the half-year, trading conditions for Retail have remained challenging with like-for-like sales at -5.0%. Autocentres' performance has been encouraging resulting in like-for-like sales growth of +1.2%. We would expect profits for the full financial year to be within the range of market expectations."
The Retail Bulletin has organised their 2nd Multichannel Summit, to be held in London February 2nd 2011. The event is sponsored by k3 retail and will look at how retailers can maximize profits, market share and loyalty through cost effective, seamless, integrated multichannel strategies.
If you would like to attend as either a delegate or Networking Partner, go to www.retailbulletinconferences.com/multichannel2011
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