// Halfords profits rise ahead of guidance
// The retailer has warned on trading conditions despite the rise
Halfords has seen full-year profits rise ahead of guidance but has cautioned on trading conditions due to the impact of Covid-19.
The retailer, which was classed as essential, was allowed to remain open during the lockdown, and said overall group sales in the 13 weeks to July 3 were down 2.8 per cent compared to last year.
Like-for-like sales dropped 6.5 per cent, while underlying pre-tax profit was down 4.9 per cent to £55.9 million, but better than had been anticipated “despite the late impact of Covid-19”.
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Excluding acquisitions and the effect of the pandemic, Halfords said that would have been “in line with last year”.
Halfords reported a jump in cycling sales during the UK coronavirus lockdown as Brits avoided public transport, however the boost was offset by a sharp drop in motoring sales, the retailer said this morning.
Motoring revenue fell 45.4 per cent on a like-for-like basis, reflecting a drop in car journeys across the UK.
The retailer said the sales performance was “significantly better than anticipated in late March”, boosted by a 200 per cent surge in online shopping.
“The start of the current financial year has of course been dominated by the impact of Covid-19, and our status as an essential retailer was a clear endorsement of the wider role that Halfords has to play in keeping the UK moving,” Halfords chief executive Graham Stapleton said.
“Having responded quickly and decisively to cater for the surge in popularity of cycling during lockdown, we are now seeing increased demand for motoring services and products as people start using their cars regularly again having not done so for the last few months.”
Halfords also reported that group revenue was at £1.15 billion in the year to April 3, an increase of 0.3 per cent on the previous year.
Underlying profit before tax pre-IFRS 16 fell 4.9 per cent to £52.6 million, as the retailer was hit by the beginning of the coronavirus pandemic in the UK.
In April, Halfords secured a new owner for 11 of its Cycle Republic stores as the retailer sought to offload its performance cycling businesses.
The deal saw the transfer of 11 stores that were previously slated for closure to electric scooter retailer Pure Electric, saving 85 jobs.