Weak pound shakes Halfords despite sales rise

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Halfords’ latest financial update has pointed to a weak pound putting a dent in profits during a period where sales saw growth.

Though revenue rose by 7.2%, reaching nearly £1.1 billion, pre-tax profits fell by 10.5% down to £71.4 for the year to March.

Cycling goods played a strong part in keeping the business on track, posting a 5.1% rise in like-for-like business. Furthermore, “high demand for electric bikes” is said to have been a contributing factor in the cycle division’s progress.

Service led retail sales grew 11.1%, though it was online showing the largest surge notching up 30.5% growth. Wheelies and Tredz both played a strong part in these gains and further added a 22% year-on-year sales growth.

Jill McDonald, the firm’s soon to be former chief executive, commented: I am pleased with the performance this year, with sales growth across all areas of our business and market share gains in both Motoring and Cycling. Profit performance for the year was impacted by the weaker Pound but our plans are well developed and I am confident this will be offset over time. We have made great progress with our ‘Moving Up A Gear’ strategy, with increased customer insight and sustained growth in service-related sales being particular highlights.”

The outlook for the year ahead offers that currency movements are further expected to impact profits, but that mitigation plans are well developed and progress to date is encouraging. The business anticipates FY18 profits to be in line with current market expectations.

As we progress through 2018 it is expected that around 30 more Halfords branches will be overhauled with a modernised branding and in-store update.

The full summary is available here.