Shares in Halfords (HFD) rose almost 15 per cent as the retailer reported better-than-expected profit growth during the first six months of the year, buoyed by strong sales of bicycles and the warm summer weather.
Pre-tax profit surpassed consensus forecasts of £38.9m, reflecting unexpectedly strong trading in the second quarter which saw like-for-like sales in the retail segment rise 6.6 per cent, against forecasts of 2 per cent. The biggest driver of growth was cycling, where comparable sales rose by over 14 per cent in the half. Cycling is now a major focus for Halfords and the division has seen a great deal of investment in advertising and promotional events, as well as wider product ranges, better customer service and nicer stores - every cycling department is to be upgraded within three years.
The car maintenance division did well too, posting an underlying sales growth of 9 per cent, although growth was slower in the car enhancement and travel solutions segments, leaving group like-for-like retail sales 7.7 per cent higher.
Post results, Numis Securities upgraded its full-year pre-tax profit estimate from £61m to £68.1m, giving EPS of 26.8p (from £72m and 27.3p in 2013).
| HALFORDS (HFD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 476p | MARKET VALUE: | £948m | |
| TOUCH: | 475-477p | 12-MONTH HIGH: | 479p | LOW: 297p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 156p* | NET DEBT: | 18% | |
| Half-year to 27 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 456 | 42.4 | 16.4 | 8.00 |
| 2013 | 490 | 44.6 | 17.6 | 5.20 |
| % change | +7 | +5 | +7 | -35 |
Ex-div: 18 Dec Payment: 24 Jan *Includes intangible assets of £341m, or 171p a share | ||||
