Halfords cycling division slows as supply disruption bites

Halfords has this morning upgraded its full year guidance within its interim results for the financial year 2022, stating within that it will invest heavily in training up electric car technicians and adding that it is happy with cycling stocks leading into Christmas.

The cycling division registered an 8.8% growth versus pre-pandemic FY2020 figures despite known issues in the supply chain holding back potential sales. The statement is headlined with a statement illustrating that comparison to FY2021 has been difficult to interpret due to Covid’s disruption.

When benchmarked against more recent data, which better reflects the ‘bike boom’ of the pandemic, the like-for-like revenue on FY2021 has seen a 20.5% dip in cycling trade.

As a sideline to Halfords’ cycling turnover, electric mobility revenue (that’s items such as electric scooters) rose sharply by 140%.

Graham Stapleton, Halfords’ Chief Executive Officer, commented: “We are delighted to have delivered a strong H1 performance, driven by market share gains in Motoring products, Garages and our mobile services business, which now account for more than two thirds of our revenue. We also continued to see a significant contribution from areas of strategic focus, with revenue from Group Services, Online and B2B, all growing by more than 75% on a two-year basis. In cycling, demand levels remain good, and we are pleased with the current availability of kids bikes and e-bikes as we head into the Christmas trading period. We have carried good sales momentum into H2 across our business, supported by the easing of supply chain disruption. This has enabled us to increase our FY22 underlying profit before tax guidance to between £80m and £90m.

“We are seeing significant growth in the number of customers choosing electric forms of transport, and we continue to have a market-leading position in the servicing and repair of electric vehicles. Sales of e-bikes, e-scooters and accessories grew by more than 140% on two years ago, and servicing for electric cars in our garages was up 120% year-on-year. We have already invested in the training of more than 1,300 electric technicians and are on track to train 2,000 by the end of FY22, equating to more than two per store or garage. This number will double next year.”

“There is good momentum in our existing business, the strategically important area of Motoring Services continues to grow strongly, and our recent acquisitions are all performing well. As a result, despite the challenging trading environment, I am very excited about our future growth prospects.”

Overall, revenue growth of 19.2% across the group registered against FY2020 data, or 8.7% against FY2021. This growth has been driven by retail cycling and motoring growth and market share gains for the firm’s autocentres. Group servicing work now makes up a third of sales, up 75% and boosted by acquisitions in the area.

The company has declared an interim dividend of 3p per share.