Halfords forecasts mid-term sales and profit growth

18th Apr 2023 08:16

(Sharecast News) - Bicycle and car products retailer Halfords said on Tuesday that it expects to see a rise in sales and profit in the mid term, as it recovers from "challenging conditions".

Ahead of its capital markets day, the company said it expects annual sales to grow to around £1.9bn from £1.6bn in 2023, while pre-tax profit is forecast to grow to between £90m and £110m from £50m to £60m. The group expects average annual capex of £50m to £60m and return on capital employed of more than 15% in the mid-term.

"We expect to deliver this growth through a combination of our core markets recovering from the current very challenging conditions, growing market share by leveraging the unique platform we have built, our acquisition synergies maturing, and using scaled and rich customer and vehicle data to drive customer lifetime value," it said.

In the mid to long term, Halfords expects group sales to grow to around £2.2bn, pre-tax profit to between £130m and £150m and average annual capex of £90m to £100m. It also forecasts return on capital employed of more than 20%.

Chief executive Graham Stapleton said: "Since 2018, we have doubled the size of our B2B and services business and have become the UK's biggest motoring services provider, increasing our group sales by circa 40%.

"From here, we see significant potential for future growth, both in our existing business and in adjacent markets. We are today providing a clear roadmap for the mid-term, as we focus on leveraging the unique platform that we have built. We will also be outlining the exciting longer-term strategic transformation opportunities that we see ahead as we unlock the enormous potential within the Halfords brand and infrastructure."