Halfords Group PLC (HFD)
Halfords Group PLC: FY20 40-week trading update
16-Jan-2020 / 07:00 GMT/BST
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The issuer is solely responsible for the content of this announcement.
16 January 2020
Halfords Group plc
FY20 Q3 Trading Update
Halfords Group plc, the UK's leading provider of motoring and cycling
products and services, today updates the market on its trading performance
for the 14-week period to 3 January 2020 ("the period").
Year-to-date
Q3 (40 weeks)
(14 weeks) % change
% change
TOTAL REVENUE
Halfords Group +4.6% -0.2%
Retail +0.6% -2.2%
Autocentres +31.2% +12.9%
LIKE-for-LIKE ("LFL") REVENUE
Halfords Group +1.3% -1.2%
Retail +0.8% -1.8%
Motoring -2.7% -4.5%
Cycling +5.9% +2.1%
Autocentres +4.6% +2.9%
A solid sales performance in the period, with positive LFL growth in both
Retail and Autocentres, alongside continued gross margin growth and tight
cost control; reaffirming full year profit guidance of GBP50-55m.
· Group revenue was up +4.6% and +1.3% LFL in the period on the back of a
strong Cycling performance and continued growth in Autocentres and B2B.
· Retail Cycling sales were up +5.9% LFL in the period, with growth
broadly based across the bike categories. Our work to optimise the cycling
space in our retail stores together with a more innovative and
differentiated range has created a better shopping experience for our
customers during the peak holiday period. This in turn has delivered
strong sales growth as well as better margins and reduced working capital
levels.
· Retail Motoring sales were down -2.7% LFL, an improvement on the first
half. We continued to take share in our core Motoring categories in a
challenging market, with low levels of consumer confidence continuing to
impact big-ticket discretionary categories such as Technology and
Workshop. There has been no incremental sales benefit from the weather,
with a mild winter so far, similar to last year. Despite this, we still
managed to grow our 3Bs business (bulbs, blades and batteries),
demonstrating the improvements we have made to our customer offer.
· Autocentres sales growth accelerated, with LFL up +4.6%. In addition,
the recent acquisitions of McConechy's and Tyres On The Drive performed in
line with expectations as we work to integrate them into the Halfords
Autocentres business. This mix of organic and acquired growth drove our
Motoring Services business forward, in line with our strategy to become a
Services-focussed business.
· As we continue to execute our Services-focussed strategy, Group
service-related revenue grew 16% in the period, and now accounts for 27%
of total Group sales.
· Group online sales grew +27% with around 80% of Halfords.com orders
collected in store. Our new web platform remains on track to launch in Q4,
which will significantly improve the digital experience and, for the first
time, allow customers to access an integrated services offer across
stores, garages and mobile through one website.
· Sales growth in B2B accelerated in Q3, up +32% year-on-year and now
accounts for 16% of Group sales.
· Our new Financial Services proposition continues to perform well,
attracting new customers to Halfords and driving year-on-year sales
growth.
Financial outlook
Alongside a solid sales performance, the Group has delivered continued gross
margin growth. Good product ranging and innovation has negated the need for
either heavy or early discounting. Further margin upside was delivered
through service revenues attached to product sales. In addition, we have
remained focused on tight cost control and improved operational
efficiencies, with underlying operating expenditure in line with the
previous year, despite upward cost pressures.
As a result of these actions, we reconfirm our expectation that FY20
underlying profit before tax, on a pre-IFRS 16 and 52-week basis, will be in
the range of GBP50m to GBP55m.
Graham Stapleton, Chief Executive Officer, commented:
"I am pleased with our overall performance in Q3, with total revenue growing
nearly 5% in the quarter. Our results reflect the positive actions we have
taken across the Group to deliver on our strategy, particularly Motoring
Services, which grew strongly.
Within Retail, Cycling performed particularly well, as customers responded
to our innovative product ranges and differentiated proposition.
Approximately 85% of our bike range is unique to Halfords, including our
successful partnership with Disney and the development of an innovative
range with Trunki, both of which helped to sell a record number of Kids
bikes in the period. In addition, our ability to provide customers with a
unique, free, build and storage offer was met with strong demand, as we
built 86,000 bikes in the week before Christmas.
As National Garage Chain of the Year in 2019, Autocentres has continued to
demonstrate good sales growth, organically and through acquisition, and
remains well on track to deliver a 3rd year of profit growth.
Though pleased with our performance, market conditions remained subdued and
we are not anticipating a near-term improvement. We will continue to focus
on improving our customer proposition, building our services business and
managing our costs and operations tightly. In the context of the current
retail market I am pleased to be reporting a positive L4L performance and to
reconfirm profit guidance for the full year."
Enquiries
Investors & Analysts (Halfords)
Loraine Woodhouse, Chief Financial Officer
Neil Ferris, Corporate Finance Director +44 (0) 7483 360675
Media (Tulchan Communications) +44 (0) 207 353 4200
Jonathan Sibun
Will Smith
Notes
1) Like-for-like sales represent revenues from Retail stores, Autocentres
and Group websites that have traded for at least a year (excluding prior
year sales from Retail stores or Autocentres closed in the year) at
constant foreign exchange rates.
Conference Call
There will be a conference call for investors and sell-side analysts
beginning at 09.30am today (UK time). The participant dial-in is +44 (0) 333
300 0804 or 0800 358 9473 (toll free). The PIN is 89436943#. To access a
recording of the call, the participant dial-in is +44 (0) 333 300 0819 or
0800 358 2049 (toll free). The pin is 301307628#. A transcript of the call
will appear online in due course.
Reporting Calendar
On 2 June 2020 we will report our annual results for the 53 weeks ending 3
April 2020 along with an update on our plans for FY21.
Notes to Editors
www.halfordscompany.com [1] www.halfords.com www.halfordsautocentres.com [2]
www.cyclerepublic.com [3] www.boardmanbikes.com [4] www.tredz.co.uk [5]
www.mcconechys.co.uk [6] www.tyresonthedrive.com
Halfords is the UK's leading provider of motoring and cycling products and
services. Customers shop at 448 Halfords stores, 26 Performance Cycling
stores (trading as Cycle Republic, Tredz, Boardman and Giant), 373 garages
(trading as Halfords Autocentres and McConechy's) and 75 mobile vans
providing tyre fitting and servicing. Customers can also shop at
halfords.com [7], cyclerepublic.com and tredz.co.uk for pick-up at their
local store or direct home delivery, as well as booking garage services
online at halfordsautocentres.com, mcconechys.co.uk and tyresonthedrive.com.
Cautionary Statement
This report contains certain forward-looking statements with respect to the
financial condition, results of operations, and businesses of Halfords Group
plc. These statements and forecasts involve risk, uncertainty and
assumptions because they relate to events and depend upon circumstances that
will occur in the future. There are a number of factors that could cause
actual results or developments to differ materially from those expressed or
implied by these forward-looking statements. These forward-looking
statements are made only as at the date of this announcement. Nothing in
this announcement should be construed as a profit forecast. Except as
required by law, Halfords Group plc has no obligation to update the
forward-looking statements or to correct any inaccuracies therein.
ISIN: GB00B012TP20
Category Code: QRT
TIDM: HFD
LEI Code: 54930086FKBWWJIOBI79
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited
reviews
Sequence No.: 40813
EQS News ID: 954529
End of Announcement EQS News Service
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