Halfords' (HFD) profits tumbled by more than a half during the year to 3 April, after the retailer recorded £32.1m in charges largely linked to the closure of its Cycle Republic and Boardman Performance Centre. Halfords, which has operated stores throughout lockdown, reported a surge in cycling sales that was offset by its motoring products performance.
The introduction of lockdown on 23 March resulted in a trading loss of £3.3m, with around two weeks of Halfords’ full year results directly affected. Cycling sales have since rocketed, rising 57 per cent on a like-for-like basis in the 13 weeks to 3 July. Cycling is, unfortunately for Halfords, a lower-margin and more capital-intensive business than its motoring segment, which has experienced a 45 per cent revenue decline during the same period.
The bias towards cycling is likely to sustain in the short term, with Halfords’ autocentres business having found that nearly a quarter of drivers haven’t used their cars in the past month, negating the need for spare parts and maintenance.
Peel Hunt forecasts adjusted full year pre-tax profits and earnings per share of £18m and 7.2p in 2021 respectively, rising to £52.3m and 21p in 2022.
|ORD PRICE:||167p||MARKET VALUE:||£ 333m|
|TOUCH:||167-168p||12-MONTH HIGH:||226p||LOW: 49p|
|DIVIDEND YIELD:||3.7%||PE RATIO:||19|
|NET ASSET VALUE:||184p*||NET DEBT:||131%|
|Year to 03 Apr||Turnover (£bn)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £396m, or 199p a share|