Halfords’ bets on motoring revival as cycling revenues hit reverse gear

Revenues gained through cycling sales at Halfords were 21.2% down like-for-like in a Q3, FY22 trading update issued today, covering the 13 weeks to 31 December 2021.

With 2020 considered a ‘boom’ year and one that has been followed by a period of supply difficulty, it’s unsurprising to see the trend reverse, though the period remains ahead of Q3 FY20 by 9.2%.

There were silver linings at the base of an update that was sparse on cycling content. Own brand Premium Adult bikes performed well, up +20%, as did E-bikes, growing over +100%. Alongside this, Tredz, the owned e-tailer grew its sales by 47%, though presumably against FY20 data which has become the baseline for comparison.

A drop off in retail customers through the latter part of 2021 is attributed to the Omicron variant circulating widely, something which has only worsened since.

Group revenue as a whole rose 13.9% over FY20, but was down 2.2% like-for like on FY21.

All headlines flagged in the update related to either autocentres, or acquisitions of motoring businesses such as National and the Axles Group, for which Halfords issued an equity raise in a bid to cement its role as the UK’s largest vehicle repair network.

“In 2019, we accelerated our strategy to evolve Halfords into a consumer and B2B services focussed business, with a greater emphasis on motoring, generating higher and more sustainable financial returns,” wrote the update, indicating an investment preference for higher margin motoring products and services.

Graham Stapleton, Chief Executive Officer, commented: “These results demonstrate the strength of our Motoring Services offer, and the outstanding performance from our Autocentres business confirms the rationale behind our recent acquisitions. With the recent addition of National to the Group, Motoring will represent more than 70% of our revenue, and we expect to carry out 7.5 million motoring servicing jobs a year. We are working hard to continually increase our capacity, capabilities, and geographic reach in this area, making it easier and more convenient for customers to have a broader range of vehicles serviced than ever before at over 1,400 fixed or mobile Motoring Services locations.

“The COVID-19 pandemic has continued to present a number of headwinds and put significant pressure on our colleagues, who have navigated their way through a variety of challenges and issues. It is their resilience, dedication, and expertise that have produced another good set of results, and I would like to take this opportunity to thank each and every one of them.”