Is Halfords (HFD) putting its troubles behind it? The shares closed trading up 7 per cent on the day the group reported revenue growth across all divisions during the 20 weeks to 17 August, with underlying sales up 2.8 per cent at group level. Retail sales grew by a solid 2.6 per cent on a like-for-like basis, while autocentres grew sales by 4 per cent. In more detail, motoring sales rose by 3.8 per cent – buoyed by a fall in new car sales and more demand for car maintenance products – while cycling sales managed to eke out a 0.8 per cent rise.
For now, management is sticking to its current guidance, which states annual profits in FY2019 will report in line with FY2018. That suggests margins have yet to completely recover, as higher costs continue to weigh on high street retailers. Online sales did especially well during the period, up more than 11 per cent, with around 85 per cent of online orders collected in store.
Analysts at Liberum praised the group’s confident update during what continues to be a very challenging time for the sector. A more detailed strategy update is due on 27 September, which analysts hope will provide "more clarity on the long-term plan and strategic strengths of the business". Currently, the brokerage forecasts pre-tax profits of £69.9m for FY2019, compared with a Bloomberg consensus range of £65-75m, equating to EPS of 28.7p a share (from 29.4p in FY2018).
