Shares in bicycle and car services retailer Halfords (HFD) plunged 9 per cent following a weaker than expected set of half-year results. First-half pre-tax profit of £46.4m fell short of consensus expectations (around £47.1m), reflecting a weak performance from the cycling division and a particularly poor summer season.
Like-for-like cycling sales fell 2.9 per cent during the period, following a very difficult second quarter in which this organic growth measure clocked a reading of minus 7.6 per cent. Every other division grew underlying sales, with special mentions going to car maintenance and autocentres, where like-for-like sales rose 6.5 per cent and 3.3 per cent, respectively. But management said profit for the 2016-17 financial year would be flat on FY2016, having previously expected 10 per cent growth in the period.
Chief financial officer Jonny Mason said rainy July weather, tough comparative figures and discounting among competitors all contributed to a rough six months for cycling, but he still expects the market to grow. Next year, Olympic and Tour de France champion Bradley Wiggins may help by lending his name to a new range of Halfords children's bikes.
Analysts at Investec Securities still expect pre-tax profit of £82.8m and EPS of 34.1p in FY2016, compared with £81.1m and 32.7p for the year ended 31 March 2015.
| HALFORDS (HFD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 389p | MARKET VALUE: | £774m | |
| TOUCH: | 389-390p | 12-MONTH HIGH: | 563p | LOW: 382p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 194p* | NET DEBT: | 16% | |
| Half-year to 2 Oct | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 524 | 49.6 | 20.2 | 5.5 |
| 2015 | 534 | 46.4 | 19.2 | 5.7 |
| % change | +2 | -6 | -5 | +3 |
Ex-div: 17 Dec Payment: 22 Jan *Includes intangible assets of £358m, or 180p a share | ||||
