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Interim Results Announcement
Results As Expected And Strong Dividend Maintained
Halfords Group plc, the UK's leading retailer of automotive and leisure products and leading independent operator in garage servicing and auto repair, today announces its Interim Results for the 26 weeks to 30 September 2011 ("the period").
Group Financial Summary
| H1 FY12 | H1 FY11 | % change | |
| Total Group Revenue | £454.0m | £456.3m | -0.5% |
| Halfords Retail | £400.6m | £407.3m | -1.6% |
| Halfords Autocentres | £53.4m | £49.0m | +9.0% |
| UK/ROI LFL Sales % change | |||
| Car Maintenance | -3.1% | +0.9% | - |
| Car Enhancement | -9.8% | -11.4% | - |
| Leisure | +3.9% | -2.1% | - |
| Total Halfords Retail | -1.9% | -4.9% | - |
| Halfords Autocentres | +2.7% | -0.8% | - |
| Gross Margin | |||
| Halfords Retail | 52.7% | 53.7% | -105 bps |
| Halfords Retail ex- C.Europe | 52.7% | 54.0% | -128bps |
| Halfords Autocentres | 66.5% | 66.1% | +36 bps |
| Operating Profit | £56.9m | £69.1m | -17.7% |
| Operating Profit Margin | 12.5% | 15.1% | -260bps |
| Profit Before Tax | £54.7m | £68.7m | -20.4% |
| Adjusted Basic EPS | 19.8p | 24.1p | -17.8% |
| Net Debt | £140.7m | £109.8m | - |
| Interim Dividend Per Share | 8.0p | 8.0p | Maintained |
Highlights
- Underlying* Group revenue down 0.1%
- As predicted, Retail gross margin declined in our drive to maximise cash returns
- Cycling sales continued to outperform, boosted by the launch of the new Carrera range in July and strong sales of accessories
- In the Car Maintenance category, sales of the Halfords range of wefit services were particularly strong
- Full-year management guidance on Retail gross margin and operating costs remains unchanged
- Autocentres like-for-like revenues up 2.7%, with a gross margin improvement of 36 basis points
- Material cash generation and a well-funded balance sheet facilitate both the share buyback programme and maintenance of a strong dividend
*excludes Halfords Retail's Central European operations
David Wild, Chief Executive, commented on the results:
"In a challenging market Halfords has delivered a robust sales performance in the first half. Our new marketing campaign, "that's helpful, that's Halfords" has built awareness of our unique value offer to customers, which blends good prices, quality and innovative products with the expert service of our colleagues in each category in which we operate.
Within stores we have been encouraged with the customer response to our innovations in Cycling, where we have grown sales in Premium, Mainstream, Children's bikes and Accessories.
Motorists continue to be affected by inflationary rises in fuel and insurance costs, so their spending on maintenance has been subdued. We are, however, delighted with the growth of wefit in stores and the improvement in the sales performance of our Autocentres business.
We offer customers affordable prices and a quality service in automotive aftercare. The roll-out programme of Halfords Autocentres is continuing to make them more accessible to more people and we remain confident that they will make a significant long-term contribution to group earnings.
The strength of our balance sheet and our cash generation mean that we are maintaining our interim dividend whilst continuing to return cash to shareholders through our share buyback programme. It is impossible to predict when trading conditions will ease. Despite this we are continuing to invest in value for customers, creating the right platform for long-term sustainable growth."
Notes:
- Like-for-like sales represent revenues from UK and Irish stores trading for greater than 365 days. Where appropriate, revenues denominated in foreign currencies have been translated at constant rates of exchange.
- Adjusted Basic Earnings Per Share is defined as basic earnings per share before non-recurring items.
- All numbers shown in this statement are before non-recurring costs, unless stated otherwise.
- The H1 FY11 figures in the table above include the final contribution from the Central European operations, including revenue of £1.9m, unless stated otherwise.
- The sales benefit within Retail, from the timing of Easter, is estimated to be around 60bps for the first half.
| Analysts and Investors: | |
| Craig Marks, Head of Investor Relations | +44 (0)7712 888 807 |
| Louise Richardson, Interim Investor Relations Officer | +44 (0)7843 367 134 |
| Andrew Findlay, Finance Director | +44(0)207 379 5151 (on the day) |
| Media (Maitland): | |
| Neil Bennett | +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
9.30am at King Edward Hall, Bank of America Merrill Lynch Financial
Centre, 2 King Edward Street, London, EC1 1HQ. Attendance is by
invitation. An audio recording of the presentation will be
available on the corporate website later today.
An interview with David Wild, Chief Executive, is now available on the Halfords corporate website and can be viewed by clicking on the link http://www.halfordscompany.com/hal/pr/video.
Forthcoming Newsflow
Halfords Group will provide a third-quarter interim management
statement on 12 January 2012.
Notes to Editors:
www.halfords.co.uk
www.halfordscompany.co.uk
Halfords Group plc
The Group is the UK's leading retailer of automotive, leisure and cycling products and through Halfords Autocentres also one of the UK's leading independent car servicing and repair operator. Halfords customers shop at 466 stores in the UK and Republic of Ireland and at halfords.com for pick-up at their local store or direct home delivery. Halfords Autocentres operates from 246 sites nationally and offers motorists dealership quality MOTs, repairs and car servicing at affordable prices.
Halfords employs approximately 11,000 staff and sells over 14,000 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.
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.
View the full press release in PDF format.