Halfords (HFD) issued improved profit guidance for the first half of the 2021 financial year after the retailer said that it had sustained momentum in both its cycling and motoring businesses. Halfords shares leapt by a fifth in early trading.
The coronavirus pandemic has heralded a boom in bicycle sales that has been reminiscent of the months that followed the 2012 Olympic games, when British cycling success inspired an uptick in demand. Cycling activity in Great Britain has more than trebled over some weekends since March, according to government data, while many commuters are still unwilling to use public transport. In London, Tube passenger numbers remain at around a third of normal levels during the week.
Halfords has capitalised on the cycling craze, recording a 46 per cent surge in cycling sales over the five weeks to 25 September. This helped drive overall sales up by more than a fifth. Halfords’ motoring customers have also supported this growth. Sales in its retail motoring and car servicing outfits rose 7.5 per cent and 18 per cent, respectively.
Halfords has accordingly moved its forecast for interim pre-tax profits above £55m, having previously envisaged profits ranging from £35-40m. The retailer retains a cautious outlook for its second half, citing the prospect of a second coronavirus wave and an uncertain economic outlook, with Brexit negotiations still yet to yield an agreement.
Peel Hunt forecasts full-year 2021 adjusted pre-tax profits and earnings per share of £75m and 30p respectively, falling to £55.4m and 22.2p in 2022.
