Halfords Group shares jumped on Thursday despite reporting mixed financial results for the 52 weeks ended 29 March 2024.
The company saw strong revenue growth of 7.9%, with like-for-like growth of 5.0%. However, underlying profit before tax from total operations declined by 18.3% to £36.1 million.
Halford shares were over 5% higher at the time of writing on investor relief results weren’t any worse than first thought.
“Halfords, the one-stop-shop for motorists and cyclists, has delivered full year results in line with previously lowered guidance. Strong growth in services provided by the group’s Autocentres was tempered by a low single digit uplift in retail operations. The high levels of promotional activity failed to bolster the topline thereby leading to a material fall in underlying profits,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
The company said performance was impacted by challenging market conditions, particularly in the consumer tyres and cycling sectors.
Despite these headwinds, Halfords managed to gain market share in all four of its core markets. The strategically important services business now represents more than half of the group’s revenue, with Autocentres showing particularly strong performance.
Investors will be encouraged by Halfords’ Autocentres group revenue increasing by 17.6%, with like-for-like growth of 10.7%. This segment’s underlying EBIT from total operations reached £13.8 million, a significant improvement of £10.7 million compared to the previous year.
Cost management was a key focus, with the company delivering savings of over £35 million, exceeding its original target of £30 million. This brings cumulative cost savings to approximately £70 million over the past three years.
Looking ahead, Halfords expects market volumes to decline in cycling and consumer tyres in the coming financial year, while motoring servicing and retail motoring products are anticipated to remain broadly flat.