Halford shares (LON:HFD) surged at the opening bell on Wednesday after the group released a strong 26-week trading update starting October 2, 2020.
The group saw its pre-tax profit for the first half increased 101% to £56 million. This is because the group saw strong demand amidst the lockdown cycling boom.
Similar revenues for the group increased 6.7% from £582.7 million to £638.9 million, while similar sales in the cycling sector were 54.4%.
When people began cycling on lockdown, the number of people in the car fell. Halfords reported a 23.7% decline in car revenue.
“We are extremely pleased to have achieved such a strong first half performance against the backdrop of one of the most challenging trading environments in recent history,” said Graham Stapleton, the group’s chief executive.
“We worked hard to leverage tail windmills in the cycling market by sourcing more inventory from existing and new suppliers and launching new products and brands to provide a high level of demand for cycling products and services. Despite the headwinds we saw in motoring, UK traffic was 30% lower than pre-199 levels, and the impact of MOT postponement, our ‘road-ready’ campaign and investment in the auto services business has allowed us to increase our market share and grow our business.
“As a sign of our confidence in the long-term outlook for our automotive business and to meet the growing demand for services in this sector, we are currently recruiting Halfords mobile expert Vans to fill a wide range of service-oriented roles across our stores, Autocentres and fleets. We also work to fill the skills gaps that exist in the UK, further trays for existing colleagues, including the rapidly growing electric vehicle services. “We’ve invested heavily in the Ning. We’ll train another 100 electric vehicle engineers next year, bringing us to a total of 470. We’ll also be increasing the number of E-Bike and E-Scooter servicers in our store from 400 to over 1,800. This means by April, each Halfords garage will have at least one electric vehicle engineer, and all stores will have electric bikes and scooter services,” added Stapleton.
The group is cautious about its outlook amid further lockdowns and seasonal dips for winter cycling sales. Given the uncertainty around the transaction, FTSE 250 retailers have not given FY21 profit guidance.
Halfords strain (LON:HFD) is +7.40% at 281,92 (0914GMT).
