Halfords ratchets up £1bn sales

Halford is two-thirds of the way through its three-year 'Getting into Gear' strategy, aimed at overhauling the group's retail business. Last year sales in the retail division rose 6.8 per cent to £858m, while like-for-like sales grew at a similar rate of 7 per cent. Cycling remains the fastest-growing category, with sales up 11.4 per cent, and still accounts for the majority of retail sales. Premium bikes are selling particularly well, and sales of children’s bikes also accelerated last year after a nostalgic Christmas marketing campaign entitled: 'Does anything beat a bike?'

Other parts of the retail business are growing too. That includes car maintenance and travel products, where sales grew 8.5 per cent and 5.4 per cent respectively last year. Its car servicing business is also expanding. A net total of two autocentres opened last year, helping like-for-like sales grow 5.3 per cent. However, higher costs and the tyre sales mix pulled operating margins down 109 basis points.

Halfords customers are moving online: last year, the group hit a record £100m in online sales. Bosses say this is down to the number of products available online (160,000 at the last count) and the convenience of its click & collect service. Approximately 90 per cent of online orders are picked up in store.

New chief executive Jill McDonald - who has only been in the job for three weeks since replacing Tesco (TSCO) defector Matt Davies - didn't comment on last year's performance, simply telling investors not to expect "any great change" in the coming months.

Analysts at Investec expect pre-tax profits of £85.2m for the current financial year, giving EPS of 34.6p. This is up from £81.8m and 32.2p in the year to March 2015.