Halfords overtakes expectations on the back of cycling

22nd May 2014 07:22

- PBT beat consensus, up 1.1 per cent- Q4 cycling up 42 per cent- Final dividend flat at 9.1pFull year profits from cycling and auto accessories retailer Halfords accelerated past consensus forecasts thanks to a stonking fourth quarter from cycling as the group's investment programme began to deliver results. A 9.9% fourth quarter increase in retail sales and 4.3% from Autocentres helped drag annual revenues 7.9% higher to £939.7m, enabling a 1.1% rise in profit before tax to £72.8m versus the £70m consensus.Cycling was the main driver of growth, as like-for-like (LFL) sales jumped 41.6% in the fourth quarter, lifting cycling LFL sales to 19.4% for the year.Pleased with the results of the first year of his Getting Into Gear strategy, Chief Executive Matt Davies said: "This was a year of significant retail sales growth and the start of a strategic investment programme designed to deliver sustainable profit growth over the medium term."Our actions resulted in a particularly strong performance in every element of our Cycling category, illustrating our leading and growing role in the market."He was also encouraged by Car Maintenance sales, where LFL sales were up 4.9% despite a mild winter, versus a 0.5% fall the previous year. Car Enhancement was down 0.1%, versus a 4.2% rise the year before, while Travel Solutions grew 2.1%, an improvement on the 1.3% in the previous year.The AutoCentres business continues to trouble Davies, however, with flat LFL sales. Even though the division made improvements in the second half that delivered 2.0% LFL sales growth in that period, he said the Autocentres performance "did not reflect its market-share potential over the full year" and new divisional leadership appointed at the end will focus on growing profitability.The board kept the final dividend of 9.1p, taking the full-year dividend to 14.3p per share. Davies concluded: "In the first year of our Getting Into Gear strategy our targets presented a year ago have been achieved. We are getting better prepared to delight our customers both in-store and online and we're making good progress with our refreshed stores, our infrastructure and the product range."Despite challenging sales comparatives ahead, he said he anticipated Halfords delivering a 2015 group earnings before interest, tax, depreciations and amortisation ahead of 2013.The shares rolled 5.53% higher at 465.8p in the first minutes of trading on Thursday.OH