Halfords profits approach £100 million as cycling sales continue to boom

Cycling and motoring retailer Halfords says that its annual profits for the 2020/21 financial year are expected to be in the range of £90-£100 million. The company also said that recent weeks have seen disruption to the supply chain start to ease.

That forecast profit figure is net of the impact of the company deciding to repay to the government the £10.7 million it had previously received in furlough support.

The retailer, which sells more bikes in the UK than anyone else, told the City today in a trading update that within cycling, growth in like-for-like (LFL) sales – which take into account changes in the store portfolio – remained strong from 2 January to 19 February, covering the first seven weeks of the fourth quarter of its financial year.

“Cycling has seen LFL growth rates improve as supply disruption has eased, although overall supply remains sub-optimal,” it said.

“Cycling LFL over the period was 43 per cent, with our unique and exclusive range of kids and adult mechanical bikes performing well, along with our performance cycling business, Tredz, which continues to see exceptional growth, up 60 per cent LFL in the period.”

Across the business as a whole, the company said that “overall trading has been stronger than we initially anticipated,” with group LFL growth from 2 January-19 February standing at 6.2 per cent, with retail up 5.1% per cent and Autocentres by 13.3 per cent.

“Despite journeys being c.40 per cent below pre-pandemic levels, our Autocentre business has continued to demonstrate signs of growing market share, with strong demand for both our garage business and Halfords Mobile Expert vans,” Halfords said.

“In Retail, our Motoring business, whilst being -14% LFL, has again performed better than traffic levels would suggest, with sales of blades, bulbs, batteries and general maintenance products performing better.”

The company said that while there are still six weeks left of its financial year, “the expected profit range remains quite broad as trading patterns continue to be volatile, with sales ahead of Easter particularly difficult to predict whilst the UK remains in lockdown.

“As the country starts to open up once more, our overriding priority remains the health and safety of our colleagues and customers.”

Halfords added: “Our next planned trading update will be our Preliminary results announcement on 17 June 2021.”