Halfords profits fly as cycling division chalks up 54.4% growth

Halfords has this morning posted an interim statement within which the cycling and motoring retailer chalked up significant gains for the former, topped up by a 184% rise in e-Mobility products.

Pre-tax profits doubled in the six months to October 2nd when compared to the year prior, reaching £56 million. Increased profitability in the cycling division has helped the business along, with the board identifying the difference in takings between the two divisions as an area to address.

As in the last trading update, the outlook going forwards remains cautious for a number of reasons, most notably the seasonal dip in cycling products into winter, but also the ongoing threat of national and local lockdowns.

The profits will be reinvested, alludes the statement, most notably into training staff to handle the electric vehicle trend to which the Government has now made strong pledges; including a vow to phase out petrol and diesel car sales by 2030.

Like-for-like revenue grew 9.6%. As part of this online proved popular as might have been expected in the current climate; digital sales rose 148%, and B2B grew 37%.

Graham Stapleton, Chief Executive Officer, commented: “We are very pleased to have achieved such a strong first half performance against the backdrop of one of the most challenging trading environments in recent history. It is a great testament to the strength and adaptability of our business, as well as to the professionalism, hard work and dedication of our colleagues.

“We have worked hard to capitalise on the cycling market tailwinds by sourcing more stock from existing and new suppliers, as well as launching new products and brands to serve the high level of demand for our cycling products and services. Despite the headwinds we have seen in motoring, with UK traffic 30% lower than pre-Covid-19 levels and the impact of the MOT deferment, our ‘Road Ready’ campaign and the investments we have made in our motoring services business have enabled us to increase market share and grow the business in Q2.

“As a sign of our confidence in the long-term prospects of our motoring business, and in order to meet the growing demand for our services in this area, we are in the process of recruiting to fill a wide range of service-oriented roles across our stores, Autocentres and fleet of Halfords Mobile Expert vans. We are also making a substantial investment in further training for existing colleagues, including in the rapidly growing area of electric vehicle servicing as we work to fill the skills gap that exists in the UK. We will be training 100 more electric car technicians next year, bringing the total to 470. In addition, we will be growing the number of e-bike and e-scooter servicers in our stores from 400 to over 1,800. This means that, by April, each of Halfords’ garages will have at least one electric car technician, with electric bike and scooter servicers in every store.

“As an essential retailer and service provider, we are proud to be able to help keep the UK moving during these exceptionally challenging and uncertain times.“

Liquidity remains strong as the business re-invests, with net cash of £97.8m, £160.4m better than the same date last year reflecting the trading performance, lower cycling stock levels and strong cash management.