Halfords issued a very respectable set of preliminary results on Wednesday, reflecting delivery on their strategy and success in fighting off the impact of inflation.
Underlying profit before tax rose 6.4% to £38.4m—beating analyst guidance as group sales rose 2.5% on a like-for-like basis.
Halfords shares were marginally higher at the time of writing. The stock is up 30% year-to-date.
The Autocentres division showed particular strength, with underlying EBIT up 21.2% to £18.3m reflecting successful “Better Buying” initiatives, robust growth in Service, Maintenance and Repair activities, and productivity improvements. Autocentre revenue actually fell during the year, underscoring the impact of the efficiency drive.
The company ended the year with net cash on its balance sheet and increased its total dividend by 10% to 8.8p.
The company said they had started the year in line with expectations and were planning further measures to deal with inflation.
“Halfords has become the latest retailer to issue a cautious update on the outlook for consumer spending, which comes despite its steady expansion into the higher-margin car servicing business,” said Chris Beauchamp, Chief Market Analyst at IG.
“The rise in earnings for the autocentre division suggests the new CEO appointment is bearing fruit. Overall today’s numbers seem to provide the justification for the recent share price bounce to the current eighteen-month highs.”