8 October 2009
Halfords Group plc
Pre-Close Trading Statement
Successful summer season increases confidence in full year performance
Halfords Group plc ("the Group"), the UK's leading auto, leisure and cycling products retailer, today issues the following trading update for the second quarter and first half-year1 ended 2 October 2009.
During the second quarter, Group sales have increased by 3.8% over the equivalent period last year, representing like-for-like sales growth of 2.2%2,3.
Year-on-year sales growth for the first half was 3.4%, 1.7% on a like-for-like basis. Adjusting for the impact of Easter, sales growth was 2.8% and equates to a like-for-like sales increase of 1.1%.
The sales momentum within leisure during the first quarter has continued, particularly within cycling. The Group has also successfully expanded and enhanced its ranges in markets, such as camping, that have benefited from the recent increased consumer interest in UK holidays.
Car maintenance continues to trade strongly, in line with recent trends, with the contribution from our service based wefit proposition again delivering encouraging year-on-year growth. Within car enhancement, whilst revenues from satellite navigation devices continue to decline, the profit impact is largely mitigated through our focus on increasing sales of higher margin ancillary products.
Strong sales within higher margin categories and a clean inventory exit in our seasonal lines have each contributed to a continued year-on-year improvement in gross margin percent. Our success in growing service revenues and increasing sales of accessories across the business, provide confidence that margins will continue to grow year-on-year in the second half, albeit at a lower rate than the increase generated in the first half year.
Reflecting this strong performance, the Board is confident that the Group will deliver half-year profit before tax in the range £59m-£61m.
David Wild, Chief Executive, said:
"We are pleased with our performance in the first half year. We have further increased share in our strong markets, managed margins tightly and controlled costs effectively whilst making selective investments to support future growth. Our service initiatives, particularly fitting, and halfords.com are performing ahead of expectations and well above last year.
While we remain cautious about the macro-economic environment in the balance of the year, we have a solid foundation from which we are very well positioned to deliver further profit growth in the second half and sustainable increases in earnings over the longer-term."
This represents the trading update for the half year within the 52-week period ending 2 April 2010. Except for the trading activities described above, there has been no significant change to the financial condition of the Group.
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.
LFL in the 13 weeks to 28 September 2008 was -1.1%.
Investor Store Visit
Halfords will today host a meeting for analysts and investors at its store in Tottenham. The meeting will focus on the core UK customer proposition and product categories and provide insight into identified opportunities for future growth.
No material new information will be disclosed in the presentations and there will be no further statement on trading. The presentation materials will be available from the investor relations section of the Halfords website.
Halfords will announce its interim results for the 26 weeks ended 2 October 2009 on Thursday, 19 November 2009. A presentation for analysts and investors will be held at 9.30 a.m. at The City Presentation Centre, 4 Chiswell Street, London EC1Y 4UP.
Halfords Group plc
Nick Wharton, Finance Director 44 (0) 1527 513047
Tony Newbould, Investor Relations Officer 44 (0) 1527 513113
Neil Bennett 44 (0) 207 379 5151
Richard Farnsworth 44 (0) 207 379 5151
Notes to Editors:
Halfords Group plc
The Group employs approximately 10,000 staff and sells over 10,000 different product lines, ranging from car parts and cycles through to the latest in-car technology, child seats, roof boxes and outdoor leisure and camping equipment. Halfords' own brands include Ripspeed, for car enhancement and Bikehut, for cycles and cycling accessories, including the Apollo and Carrera brands and in the premium range exclusive UK distribution rights of Boardman cycles and accessories. In our outdoor leisure range URBAN Escape represents our premium range for camping equipment. Operating from 469 stores, including internationally, 23 stores in Republic of Ireland, five stores in the Czech Republic and one in Poland, Halfords offers a "wefit" service for car parts, child seats, satellite navigation and in-car entertainment systems, and a "werepair" service for cycles.
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.