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.
HALFORDS (HFD) | ||||
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) |
2016 | 1.02 | 79.8 | 32.5 | 17.0 |
2017 | 1.10 | 71.4 | 28.7 | 17.5 |
2018 | 1.14 | 67.1 | 27.8 | 18.0 |
2019 | 1.14 | 51.0 | 21.2 | 18.6 |
2020 | 1.16 | 19.4 | 8.9 | 6.2 |
% change | +1 | -62 | -58 | -67 |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £396m, or 199p a share |