Halfords grows sales despite retail woes

9th Jun 2011 07:15

Car parts and bikes retailer Halfords reported a solid set of full year results despite ongoing retail sluggishness, helped by improved gross margin and cost control. Underlying pre-tax profit rose 7.2% to £125.6m for the year to 1 April 2011, in line with forecasts, while group revenue increased 4.6% to £869.7m after the acquisition of its Autocentres business. Chief executive David Wild commented, "This has been a challenging year for customers. Nonetheless we have increased profits through a clear focus on costs and margins." The timing of Easter benefited Retail sales by around 1.5% on a like for like basis while demand for camping equipment also helped lift sales at the retailer.Sales momentum in the leisure category developed during the last quarter and into the new financial year. Like-for-like sales for the 9 weeks to 3 June were up 0.8%, driven by a strong performance in Leisure, up 11.1% lfl, which offset a decline in Car Enhancement, down 10.6%. Car Maintenance declined 3%. Halfords, which today announced a £75m share buyback programme, said Autocentres sales were up 1.2% lfl over the same 9-week period while its wefit service saw good growth as more customers came to the store to have bulbs, blades and batteries fitted.In Leisure, while the group saw increases in the sales of tents and camping equipment, bicycle sales were less buoyant, due in part to the range issues in the Spring/Summer and winter snow, that slowed sales pre-Christmas, it said. "We expect the consumer environment to remain challenging, but we have demonstrated that our business can make good progress in these conditions," Halfords said. Net debt was reduced to £103.2m from £155.5m. A total dividend of 22p has been offered, up from 20p before. CJ