The unseasonal weather was a problem for a number of retailers last year and, if full-year results are anything to go by, Halfords (HFD) is no exception. The bicycle retailer reported a minor 1.3 per cent improvement in retail like-for-like sales for the year ending 1 April 2016. Breaking that down, there was 2.5 per cent growth in motoring sales and a 0.9 per cent fall in cycling sales. Chief executive Jill McDonald blames wet weather last July and August, which deterred mainstream cyclists from taking to the roads. That said, unseasonably warm temperatures through the month of December meant cycling sales started to bounce back during the third and fourth quarters of the financial year.
Elsewhere, total sales performed strongly, up 8.5 per cent at the services division and 4.1 per cent across the group's autocentres. Online sales also rose 1.4 per cent and now represent 12 per cent of total retail sales, with roughly 90 per cent of orders collected in store. This year, Ms McDonald says investment would be directed towards its online capabilities and distribution process, rather than new store openings. Around £1.7m in one-off restructuring costs weighed on the bottom line.
As for the future, management remains bullish on the long-term prospects for Britain's cycling market, with Halfords' market share hovering around 24 per cent for bikes and 10 per cent for cycle repair. Based on the company's own research, the cycle market should continue to grow at 3-5 per cent a year. Ms McDonald said that, while she expected the 2016 Olympics to provide a short-term boost to trading, long-term customer behaviour would determine company strategy. The group has announced a new limited edition range of ladies' bikes - designed in collaboration with Olympic champion Laura Trott - which should be available at the end of July, just ahead of the tournament.
Analysts at N+1 Singer expect pre-tax profits of £83m for the year ending March 2017, giving EPS of 33.2p compared with £81.5m and 33p in FY2016.
| HALFORDS (HFD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 416.4p | MARKET VALUE: | £829m | |
| TOUCH: | 415.9-416.6p | 12-MONTH HIGH: | 563p | LOW: 311p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 204p* | NET DEBT: | 12% | |
| Year to 1 April | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 0.86 | 94.0 | 34.2 | 22.0 |
| 2013 | 0.87 | 71.0 | 27.2 | 17.1 |
| 2014 | 0.94 | 72.6 | 28.6 | 14.3 |
| 2015** | 1.03 | 83.8 | 33.8 | 16.5 |
| 2016 | 1.02 | 79.8 | 32.5 | 17.0 |
| % change | - | -5 | -4 | +3 |
Ex-div: 4 Aug Payment: 26 Aug *Includes intangible assets of £363m, or 182p a share **53-week period | ||||
