Results from Halfords were largely as expected, but the car parts retailer will nevertheless be pleased to see the back of a year which saw the company repeatedly peg back profit expectations.
Although underlying pre-tax profits climbed 7.2 per cent to £125.6m, that was below the level expected at the start of the financial year. The business got off to a bad start as it switched to a new distribution system, which along with further stock issues and a tough consumer environment meant like-for-like retail sales fell 5.5 per cent.
The car repair business acquired in February 2010, now rebadged Halfords Autocentres, also suffered as drivers put off all but the most essential repair work. Underlying sales of £98.1m represented growth of only 0.6 per cent and a £7m operating profit contribution was lower than expected. However, the previously delayed marketing relaunch has seen Autocentres' sales edge up 0.8 per cent in the first nine weeks of the current financial year, and underlying retail sales were back in positive territory, too, up 0.8 per cent thanks to strong demand for leisure products.
Broker Seymour Pierce expects current year underlying EPS of 38.9p (2011: 40.7p).
HALFORDS GROUP (HFD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 417p | MARKET VALUE: | £860m | |
| TOUCH: | 417-418p | 12-MONTH HIGH: | 563p | LOW: 340p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 156p* | NET DEBT: | 32% | |
| Year to 1 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 744 | 81 | 25.8 | 13.9 |
| 2008 | 797 | 90 | 29.3 | 15.1 |
| 2009 | 810 | 78 | 26.6 | 15.9 |
| 2010 | 832 | 110 | 36.8 | 20.0 |
| 2011 | 870 | 118 | 40.7 | 22.0 |
| % change | +5 | +8 | +11 | +10 |
Ex-div: 29 Jun Payment: 6 Aug *Includes intangible assets of £347m, or 168p a share | ||||
