Halfords sales disappoint
Profit growth from Retail margin and cost management and Nationwide acquisition
Today’s trading update for the second quarter and first half-year ended 1 October 2010 shows that group revenues for the half-year increased by 7.6% year on year. Like-for-like sales for Halfords Retail and Autocentres decreased by 4.5% and 0.8% respectively. At the Group level, this represented a like-for-like decline of 4.1%.
During the second quarter, Group sales increased by 5.5% over the equivalent period last year. This period saw the successful conclusion of an 18-month programme to transition the Group's existing distribution centres to a more efficient and cost effective configuration, with the impact to sales during the transition period estimated to be c. 1.4% across the second quarter. On an underlying basis, excluding the estimated impact of disruption to sales, like-for-like sales declined by 4.9% in Halfords Retail. Autocentres delivered a like-for-like revenue decline of 1.5%.
Group profit before tax for the first half is expected to be in the range of £67-69 million which represents, at the mid-point, year-on-year profit growth of 12%.
David Wild, Chief Executive Officer, commented, "Halfords will deliver solid profit growth in the first half despite the challenging environment. We continue to improve our cost base and in the past few months have successfully addressed a number of company issues, such as the reconfiguration of our warehousing and distribution infrastructure.
"We are meeting the challenges presented by a more cautious UK consumer by building on Halfords' retail market leadership and strong business model. The integration of our Autocentres business is continuing well and, after this year of investment, we are well positioned to accelerate earnings growth”.
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