Halfords has announced that its sales grew over the past year, driven by the modernisation of its garages and increased demand for e-bikes. Shares in the company surged approximately 14% following the update.
Revenue and Sales Growth
The motoring and cycling retailer reported total revenues of £1.8 billion for the year ending April 3, representing a 4.8% increase on a like-for-like basis compared to the previous year. This growth was supported by a 4.1% rise in retail sales and a 5.8% jump in sales from its autocentres.
Halfords attributed the strong performance to its consumer garages business, which includes car repairs and MOTs. The segment benefited from the opening of dozens of Fusion garages, which integrate retail and garage services. The company has opened more than 100 such garages and plans to add another 35 this year.
Service-Related Revenues and Efficiency Measures
More than half of Halfords' revenues now come from service-related sales. The firm has implemented measures to improve workforce efficiency and reduce labour costs, including redeploying staff to busier garages and reducing reliance on expensive agency workers. These steps were taken in response to higher wages and national insurance increases.
Halfords is also modernising its network by introducing specialist electric vehicle (EV) servicing equipment at most sites and plans to provide staff with tablets to support vehicle inspections.
CEO Comments on Inflation and Profit
Chief executive Henry Birch commented: “We have countered £40 million worth of inflation, £32 million of which was effectively wage inflation – a combination of national insurance, minimum wage, and the knock-on impact. So the fact that we are reporting profit growth even with that inflationary backdrop… I think is a fantastic result. That hasn’t been a result of us implementing job cuts, that has been about driving the business better, doing more sales and improving our growth margins.”
Retail and Cycling Segment Highlights
In the retail business, which sells products including bikes and car parts, Halfords said sales grew despite a subdued consumer environment. A standout segment was cycling, particularly e-bikes, with plans to significantly expand the range, including mountain and hybrid e-bikes, as demand continues to grow.
Impact of External Factors and Summer Weather
Halfords noted that trading remained strong in recent months and that it had not observed any change in customer behaviour due to the Iran conflict, though it remains sensitive to potential impacts on spending in the months ahead.
Mr Birch highlighted that early hot summer weather boosted sales of products such as air conditioning and accessories for keeping cool in cars. “Or it’s associated with staycations, so people buying roof boxes, roof racks, cycling does well – anything where people are getting out and about in the UK. There seems to be a growing trend for people holidaying in the UK, which I think is ultimately really good for our business over the long term.”
Financial Performance
The company reported a return to pre-tax profit of £43.6 million for the year, compared to a loss of £30 million the previous year.
