RNS Number : 8938L
Halfords Group PLC
16 August 2013

16 August 2013



Halfords Group plc

Changes to the Halfords Performance Share Plan & Director / PDMR Shareholding




Halfords Group plc's ("the Company's") 2013 Annual Report stated that the Company was planning to make changes to the performance conditions of the Halfords Performance Share Plan ("PSP"). This was in order to create better alignment with the Company's three-year strategic priorities following the Getting Into Gear 2016 programme announced on 23 May 2013. After consultation with certain major shareholders of the Company, the performance condition changes have now been finalised. 


Performance Conditions

The Remuneration Committee believes the appropriate measures of the executive team's successful achievement of the strategy are stretching targets relating to Group revenue and Group EBITDA. The Committee also believes that profitable growth must be the focus. Accordingly, it is therefore proposed that PSP awards made in FY14 will be weighted 25% towards Group revenue growth targets and 75% towards Group EBITDA growth targets.


Revenue growth is a key objective of the Getting Into Gear 2016 programme and is easily identified by both management and shareholders. Growth in EBITDA is a measure of operational profit performance and operational cash management, with a clear line of sight for management.  Given the evolution in strategy and the consequent focus on investment for long-term shareholder value, EBITDA is a more appropriate measure of the effective delivery of the strategy.


Under the new proposals, the annual core award via the PSP will remain at 150% of base salary for Executive Directors.  The 'multiplier' will continue to operate which will allow participants to earn up to 1.5x the core award (i.e. a maximum of 225% of base salary) if exceptional levels of performance are achieved. The Remuneration Committee believes that the multiplier is a strong incentive for management to drive outstanding performance.


The Remuneration Committee has also decided that, for shares vesting as part of the multiplier calculation, a retention period of two years will be introduced.


Performance Targets

The proposed Group revenue and Group EBITDA targets for the performance period FY13-FY16 are based on reported FY13 results for Group Revenue of £871.3m and Group EBITDA of £103.4m.


Group Revenue Growth

(25% of award)


Group EBITDA Growth

(75% of award)


Threshold (30% vesting)



Maximum (100% vesting)



Multiplier (150% vesting)




The proportion of award vested is calculated on a straight-line basis between measurement points



These targets can also be expressed as finite numbers:


Group Revenue

(25% of award)


(75% of award)


% Growth


% Growth

Threshold (30% vesting)





Maximum (100% vesting)





Multiplier (150% vesting)






The proportion of award vested is calculated on a straight-line basis between measurement points


In addition to achieving these targets, the vesting of awards will be subject to meeting an underpin of net debt to EBITDA ratio no greater than 1.5x throughout the three-year performance period. This will ensure that net debt remains at appropriate levels and management is not incentivised to increase net debt levels to meet targets; the focus is to maximise the return on cash investments.


Furthermore, to ensure that management is not incentivised to deliver revenue growth at the expense of profitability, no part of the award will vest if Group EBITDA performance fails to meet the threshold target. If the award does vest that portion of the award that can be earned in relation to Group revenue will be limited by reference to the Group's EBITDA performance.


Prior to vesting, the Remuneration Committee will also need to satisfy itself that the achievement of the revenue and EBITDA targets are a genuine reflection of the Company's underlying financial performance and the achievement generated added value for shareholders during the period; the Remuneration Committee may adjust the level of vesting accordingly. 


Awards Granted


On 7 August 2013 the Remuneration Committee awarded shares to the following Directors / PDMRs (Persons Discharging Managerial Responsibility) under the Company's PSP over the Company's Ordinary Shares for which no payment is required, the number of shares being calculated using a market price of 373.9 pence per share in accordance with the plan's rules:




Matt Davies


Andrew Findlay



As for existing awards the number of shares subject to the right will be increased to reflect the dividends that would have accrued on vested shares had they been reinvested in shares in the period between grant and exercise.


Awards will vest subject to the performance conditions outlined above. 


Shares that vest up to the maximum level of performance will become exercisable in August 2016. To the extent that awards vest in line with the performance multiplier outlined above, these shares will only become exercisable in August 2018, following a retention period of two years.


This announcement is made in accordance with the requirements of DTR 3.1.4.





Alex Henderson                                                            

Company Secretary

01527 513025



Notes to Editors






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 around 290 sites nationally and offers motorists dealership-quality MOTs, repairs and car servicing at affordable prices.


The Halfords Group strategy is based on three pillars:

·      Supporting Drivers Of Every Car

·      Inspiring Cyclists Of Every Age

·      Equipping Families For Their Leisure Time


The Getting into Gear 2016 plan for the Retail business is based on executing in five key areas in order to deliver a significantly-enhanced customer experience:


·      Service Revolution

·      The H Factor

·      Stores Fit To Shop

·      21st Century Infrastructure

·      Click With The Digital Future


Halfords employs approximately 12,000 colleagues and sells around 10,000 product lines in stores, increasing to around 30,000 lines online. The product offering encompasses significant ranges in car parts, cycles, in-car technology, child seats, roof boxes, outdoor leisure and camping equipment. Halfords own brands include Apollo andCarrera cycles, augmented by exclusive UK distribution rights for the premium-ranged Boardman cycles and accessories. In outdoor leisure, we sell a premium range of camping equipment including brands such as Vango and Outwell. 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.



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