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Preliminary Results Announcement
HALFORDS DELIVERS 25% EARNINGS PER SHARE GROWTH
Halfords Group plc, the UK’s leading retailer of automotive and leisure products and leading operator in garage servicing and auto repair, announces its Preliminary Results for the 52 weeks to 2 April 2010.
Financial Summary
| 2010 | 2009 52 weeks | 2010 | 2009 53 weeks | |
| Excl Non- Recurring1 |
Excl Non- Recurring1 |
Reported | Reported | |
| Revenue | £831.6m | £794.7m | £831.6m | £809.5m |
| Like-for-like Sales2 | 1.3% | -3.3% | 1.3% | -3.3% |
| Operating Profit | £119.7m | £101.9m | £112.3m | £91.7m |
| Operating Margin | 14.4% | 12.8% | 13.5% | 11.3% |
| Profit Before Tax | £117.1m | £92.4m | £109.7m | £77.5m |
| Basic EPS | 39.7p | 31.8p | 36.8p | 26.6p |
| Net Debt | £155.5m | £164.0m | £155.5m | £176.2m |
| Full Year Dividend | 20.0p | 15.9p | 20.0p | 15.9p |
Financial Highlights
On a comparable 52-week basis3, excluding non-recurring items, the Group’s performance is summarised:- Revenue £831.6m, 4.6% increase with underlying, Easter adjusted, like-for-like sales increasing by 0.7%
- Gross margin per cent increased by 230bps year on year to 54.4%
- Operating profit £119.7m up 17.5%, representing 14.4% of sales (2009: 12.8%)
- Profit before tax £117.1m up 26.7%
- Basic earnings per share 39.7p up 24.8%
- Operating cash flow4 at £179.6m, (FY09: £114.2m), 125% of EBITDA
- Recommended final dividend 14.00p, making a total of 20.00p per ordinary share (2009:15.90p), up 25.8%
- Net debt, after funding the acquisition of Nationwide, at £155.5m (2009: £173.9m) represents 1.0x EBITDA
Business Highlights
- Continued strong sales and market share growth in car maintenance and cycling
- Margin gains reflect successful ongoing implementation of active trading strategies
- Service differentiation continues, with strong growth in wefit and werepair jobs, increasing by 40% to 2.1m
- Multi-channel revenue grew by 34% and accounts for 6% of total revenue
- Successful delivery of cost saving initiatives with £6m annualised cost reductions crystalising in 2010
- Acquisition and successful integration of Nationwide Autocentres, the UK’s leading independent car servicing and repair operator
David Wild, Chief Executive, commented on the
results:
“Halfords has had an excellent year. As a result of our
disciplined growth strategy and a clear focus on the needs of our
customers, our business continues to develop strongly. Sales growth
in core areas, margin expansion and disciplined cost control has
led to the delivery of 25% earnings growth.
In addition we made our first acquisition, Nationwide Autocentres, which represents a natural extension of Halfords service proposition in the car aftermarket and is already making a good contribution to the Group.
Looking ahead we will continue to expand our core retail business, double earnings from the Autocentre operations over the next three years and harness our strong cash flow to seek further acquisitions that meet our investment criteria. The aim of this strategy is to deliver sustainable earnings growth over the medium term of, on average, 15% per annum.
While we remain cautious about the current state of the wider UK economy and immediate outlook for consumer spending, we have a proven strategy, a resilient business, and significant opportunities. The Board is therefore confident that the Group will deliver further earnings growth in the year ahead.
The Group’s success reflects the continued hard work and contribution made by all colleagues. I would like to thank them for their continued efforts.”
Notes:
1. Non-recurring items are described in note 4 to the Preliminary
Statement.
2. Like-for-like sales represent revenues from stores trading for
greater than 365 days. Where appropriate, revenues denominated in
foreign currencies have been translated at constant rates of
exchange.
3. In order to be comparable on a calendar basis, balance sheet
metrics are stated on a year-end basis.
4. Operating cash flow represents Net cash from operating
activities adjusted for financing, tax flows and non-cash
items.
Enquiries:
| Analysts: | |
| Halfords Group plc | |
| Nick Wharton, Finance Director | +44 (0) 1527 513047 |
| Tony Newbould, Investor Relations Officer | +44 (0) 7753 809522 (on the day) |
| +44 (0) 1527 513113 (thereafter) | |
| Media: | |
| Maitland | |
| Brian Hudspith | +44 (0) 207 379 5151 |
| Richard Farnsworth | +44 (0) 207 379 5151 |
Results presentation
A presentation for analysts and investors will be held, today, at
9.30 a.m. at The City Presentation Centre, 4 Chiswell Street,
London EC1Y 4UP. An audio cast and interview with David Wild will
be available on the Halfords corporate website later today
(www.halfordscompany.com/hal/pr/video).
Forthcoming Newsflow
Halfords Group will be holding its Annual General Meeting at the
Alveston Manor, Clopton Bridge, Stratford upon Avon, Warwickshire
CV37 7HP on Tuesday, 27 July 2010. The meeting will include a first
quarter trading update from the Group that will cover the 13 weeks
from 3 April 2010 to 2 July 2010.
Notes to Editors:
www.halfords.co.uk
www.halfordscompany.co.uk
www.nationwideautocentres.co.uk
Halfords Group plc
The Group is the UK’s leading retailer of automotive, leisure and cycling products and through Nationwide Autocentres also the UK’s leading independent car servicing and repair operator.
Halfords employs approximately 11,000 staff and sells over 12,000 different product lines with significant ranges in car parts, cycles, in-car technology, child seats, roof boxes, outdoor leisure and camping equipment. Halfords own brands include the in-store Bikehut department, for cycles and cycling accessories, Apollo and Carrera cycles and exclusive UK distribution rights of the premium ranged Boardman cycles and accessories. In outdoor leisure, we sell a premium range of camping equipment, branded URBAN Escape. Halfords offers customers expert advice and a fitting service called "wefit" for car parts, child seats, satellite navigation and in-car entertainment systems, and a “werepair” service for cycles.
Halfords customers shop at 469 stores in the UK and abroad and at halfords.com for direct home delivery or pick-up at their local store. Nationwide Autocentres operates from 224 sites nationally and offers motorists dealership quality MOTs, repairs and car servicing at affordable prices.
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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