Halfords full year profit hits the skids

Car and leisure products retailer Halfords reported a 20 per cent drop in full year pre-tax profit and warned that retail sales in the 2013 financial year have so far been very disappointing.

"In particular we have not seen the usual seasonal demand for Cycling and Outdoor Leisure products. We believe some of these sales are deferred rather than cancelled, and we expect a stronger performance from these categories as the year progresses. Autocentres continues to grow," the group said in a company statement.

Profit before tax, after non-recurring items fell to £94.1m in the 52 weeks to 30 March 2012 from £118.1m a year earlier. Total group revenue slipped to £863.1m from £869.7m before. Consensus had been for pre-tax profit of £91.86 on sales of £861m.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Within Leisure, Cycling like-for-like revenues increased 9.7%, after a strong performance in both Premium Bikes and Cycle Accessories. In-store service revenue rose by 22.6% as fitting demand soared.

Halfords said, "In the year ahead we are investing in our key areas of growth, Cycling, Fitting Services and Autocentres. This will accelerate our transition to a contemporary solutions provider and will create up to 1,000 new jobs."

Chief executive David Wild added that good progress had been made in its key growth areas of Leisure, including Cycles, Fitting Services and Autocentres.

"Our success in these categories and our detailed market research demonstrates how customers appreciate the help and value we offer and our opportunity for further growth," he said.

"Halfords continues to be profitable and strongly cash generative and we are seeking to maximise our performance in this demanding retail environment."

Net debt increased to £139.2m from £103.2m before.

A final dividend of 14p has been offered, and a full-year dividend of 22p, unchanged from last year.

CJ