Halfords, Britain’s biggest retailer of bicycles, says that the fall in value of the pound since June's vote to leave the European Union is causing “headwinds” that are increasing its costs and hitting profits.
Announcing its financial results for the six months to 30 September, the car accessories to bicycles retailer said that profit before tax and non-recurring items had fallen 12.1 per cent to £40.8 million, despite revenue rising 6.3 per cent to £567.3 million.
Chief executive Jill McDonald said she was “pleased with the momentum that is building as we implement our strategy, and that “the benefits for colleagues and customers are starting to come through.”
But she cautioned: “The depreciation of Sterling brings cost headwinds,” adding that the group had “developed a number of initiatives to mitigate the profit impact.”
Better weather this summer and a successful Olympics for Team GB’s riders – of whom Laura Trott is the latest to launch an eponymous range at Halfords – helped cycling performed strongly, with sales growth of 16 per cent from mid-August to the end of September.
For the six months as a whole, like-for-like growth in cycling – which strips out the effect of newly opened or expanded stores, and businesses acquired during the year – were up by 4.6 per cent.
Halfords said “a strong performance during the peak Summer trading period more than offsetting the weather=impacted soft market conditions in April to June.
“The sales performance was driven by new ranges across kids and mainstream bikes, continued strong growth in premium bikes, and our competitive ‘20% off all bikes’ promotion.”
The company said that it was seeing strong sales growth in its Cycle Republic stores, with two new ones opened in Purley and Birmingham during the period, and that Tredz and Wheelies, which it bought in May this year, had seen year-on-year sales grow 25 per cent since then.
Those contributions helped push total sales growth for cycling in the six-month period to 15.4 per cent.
Halfords estimates its share of the UK bicycle market as now standing at 26 per cent, with 16 per cent for parts, accessories and clothing, and 10 per cent for cycle repair.
The company added: “We remain confident in the long-term growth prospects of the cycling market, and expect the cycling market to grow on average at 3-5 per cent per annum, driven by large scope for new cyclists as well as increased spend from existing cyclists.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.