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Halfords PLC

Halfords Group plc Delivered a robust sales and cash flow performance, despite the challenging consumer environment

Halfords Group plc (LON:HFD) , the UK’s leading provider of motoring and cycling products and services, today announces its interim results for the 26 weeks to 28 September 2018 . All numbers shown are before non-recurring items, unless otherwise stated.

Group Financial Summary

H1 FY19

£m

H1 FY18

£m

 change

Like-for-Like Revenue  (“LFL”)*               

Revenue

599.9

588.7

+1.9%

+2.5%

Retail

519.8

511.0

+1.7%

+2.3%

Autocentres

80.1

77.7

+3.1%

+3.3%

Gross Margin

49.4%

48.6%

+80 bps

Retail

46.6%

45.7%

+90 bps

Autocentres

67.5%

67.7%

-20 bps

Underlying EBITDA*

49.8

54.9

-9.3%

Underlying Profit Before Tax*

30.5

36.8

-17.1%

Underlying Basic Earnings Per Share*

12.4p

14.8p

-16.2%

Profit Before Tax after non-recurring items

28.2

36.6

-23.0%

Basic Earnings Per Share after non-recurring items

11.4p

14.7p

-22.4%

Interim Dividend Per Share

6.18p

6.00p

+3.0%

Financial highlights

· Total Group Revenue +1.9% and +2.5% LFL, reflecting good sales of e-bikes, dash cams and motoring services

· Gross margin improved

· Underlying Profit Before Tax broadly in line with our expectations, reflecting planned operating cost growth, primarily driven by phasing, one-off items and investments

· Free Cash Flow of £34.2m, up 10% on H1 last year

· Net debt at £77.2m representing 0.7 times Underlying EBITDA

· Interim dividend per share of 6.18p, up 3.0%

New strategy launched

Early progress against our new strategy to inspire and support a lifetime of motoring and cycling by:

Inspiring our customers through a differentiated, super specialist shopping experience

• Initial optimisation of space implemented in all Retail stores, further enhancing our specialisms in motoring and cycling

• Redefining and differentiating our own label ranges; new own brand bulb ranges the first category launched

• Strengthening of cycling specialist credentials via agreement with Brompton to sell their products across the Halfords Group

Supporting our customers through an integrated, unique and more convenient services offer

• On-demand retail motoring services trial launched in garages

• Strengthened customer offer through launch of financial services trial in Retail and Autocentres

• Raising awareness of our services proposition through nationwide sponsorship of ITV Weather

Enabling a lifetime of motoring and cycling

• 152,000 Retail customers signed up for cross-Group MOT promotion, 70% of whom are new to Autocentres

Full-year outlook reconfirmed

We continue to anticipate FY19 Group profit before tax broadly unchanged on FY18, with H2 performance reflecting a shift in our sales mix towards less discretionary categories, greater FX benefit of circa £3m and lower Retail operating cost growth (circa 3% in H2 vs 8% in H1). This guidance is subject to our trading performance over the peak Christmas period and also assumes average Winter weather. We expect the short term conditions for discretionary spend to remain challenging.

Graham Stapleton, Chief Executive Officer of Halfords, commented:

“Despite the challenging UK consumer environment, we delivered a robust sales and cash flow performance in the first half, with costs and profit broadly in line with our expectations. We are making good early progress as we implement our new strategy, and we are encouraged by the initial signs. We are moving to a more customer centric approach, leveraging our expertise to provide a more differentiated shopping experience and an integrated and more convenient services offer.”