DJ Halfords Group PLC: Trading Update: Financial Year 2024
Halfords Group PLC (HFD)
Halfords Group PLC: Trading Update: Financial Year 2024
28-Feb-2024 / 07:00 GMT/BST
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28 February 2024
Halfords Group plc
Trading Update: Financial Year 2024
Halfords Group plc ("Halfords" or the "Group"), the UK's leading provider of Motoring and Cycling services and
products, today issues the following trading update.
At our Q3 trading update on 25 January 2024 we indicated that we expected Underlying Profit Before Tax1 ("PBT") for the
52-week period ending 29 March 2024 to be between GBP48m and GBP53m, assuming markets did not weaken further in Q4. Since
that update, we have seen a further material weakening in three of our four core markets (i.e. Cycling, Retail Motoring
and Consumer Tyres), resulting in a significant drop in like-for-like ("LFL") revenue growth in our Retail business.
As a result, we now expect PBT to fall in the range of GBP35-40m. This reduction in profit expectations is driven by two
key factors:
1. Both the Cycling and Retail Motoring markets have been impacted by a combination of continued weak
customer confidence and unusually mild and very wet weather, which affected footfall into stores and sales of
categories such as winter and car cleaning products. Volume in the Retail Motoring market fell year-on-year by 5.1%
pts in January (vs an increase year-on -year of +0.2% in Q3); volume in the Cycling market fell year-on-year by
8.0% pts in January (vs a decline of 5.1% pts in Q3); and volume in the Consumer Tyres market fell by 4.3% pts in
January (vs a decline of 2.6% pts in Q3).
2. The Cycling market has become more challenging and competitive as it continues to consolidate.
Promotional participation has increased, and more customers are purchasing on credit, leading to weaker gross
margins than previously anticipated.
We continued to deliver good growth in our resilient and strategically important Autocentres business. Although the
Consumer Tyres market worsened in January, we saw a strengthening Service, Maintenace and Repair ("SMR") market and we
continue to see good customer demand in this area.
Our FY24 PBT forecast assumes the same challenging market conditions continue for the rest of Q4, including through our
peak Easter cycling period in March. We have continued to take decisive action on cost, but in the short period between
now and the end of the financial year this will not be sufficient to offset the significant market deterioration we
have seen.
Looking ahead to FY25, we remain cautious on market recovery in the short-term, and the current significant volatility
in market conditions means that forecasting accurately is challenging. Notwithstanding this, we anticipate that
underlying PBT in FY25 will be broadly in line with that forecast in FY24 assuming that: 1) There is marginal
year-on-year growth in our core markets, with trading conditions seen in Q4 proving anomalous; and 2) The Cycling
market normalises and margin pressure dissipates through the year. FY25 PBT will be supported by cost savings that more
than offset net inflationary headwinds.
Whilst we have reduced our profit guidance as a result of very challenging and exceptional short-term market
conditions, we remain confident in our strategy and longer-term growth prospects. When our core markets recover, the
platform we have built leaves us exceptionally well-placed to succeed.
1. Underlying profit before tax is stated before non-underlying items. Non-underlying items for FY24 will
include costs related to the closure of our existing tyre supply operation, as detailed in our recent Q3 Trading
Update. We will review the carrying value of our assets in line with our year-end timetable and report the results
of this as part of our Preliminary Results Announcement. It is likely that the results of the existing tyre supply
operation will be disclosed as Discontinued Operations in the FY24 accounts - our revised guidance for PBT includes
the results of the tyre supply operation i.e. it is based on 'All Operations'.
Enquiries:-
Investors & Analysts (Halfords)
Jo Hartley, Chief Financial Officer
Neil Ferris, Director of IR and ESG +44 (0) 7483 457 415
Neil.Ferris@halfords.co.uk
Media (Powerscourt) +44 (0) 20 7250 1446
Rob Greening halfords@powerscourt-group.com
Nick Hayns
Elizabeth Kittle
Notes to Editors
www.halfords.com www.tredz.co.uk www.halfordscompany.com
Halfords is the UK's leading provider of motoring and cycling services and products. Customers shop at 386 Halfords
stores, 3 Performance Cycling stores (trading as Tredz and Giant), 645 garages (trading as Halfords Autocentres,
McConechy's, Universal, National Tyres and Lodge Tyres) and have access to 266 mobile service vans (trading as Halfords
Mobile Expert, Tyres on the Drive and National) and 554 Commercial vans. Customers can also shop at halfords.com and
tredz.co.uk for pick up at their local store or direct home delivery, as well as booking garage services online at
halfords.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.
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ISIN: GB00B012TP20
Category Code: TST
TIDM: HFD
LEI Code: 54930086FKBWWJIOBI79
Sequence No.: 306375
EQS News ID: 1846643
End of Announcement EQS News Service
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(END) Dow Jones Newswires
February 28, 2024 02:00 ET (07:00 GMT)
