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Halfords shares rise on cycling sales boom

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Halfords has posted a 12% growth in sales over Q3, thanks to the boom in cycling over lockdown.

The firm saw a 35% growth in the cycling department, whilst the cycling business Tredz grew by 53%.

Due to tighter restrictions and people staying at home, the group’s motoring sales were down by 8.4%. Halfords, however, said this was a pleasing result given the current climate.

Chief executive Graham Stapleton said that Halfords was playing “an essential role in keeping the UK moving during the pandemic.”

“Throughout the crisis we are privileged to have been able to offer free checks and discounts to 239,000 NHS workers, teachers and Armed Forces staff to help them keep their vehicles safe and roadworthy,” he added in the trading update.

Since November 2019, the group has closed 33 sites and plans to shutter a further 47 stores before the end of the financial year.

The group has remained open as an essential retailer. It has not yet said whether it will return business rates relief but will reveal an update when the “Covid-19 situation becomes clearer”.

Nicholas Hyett, a Hargreaves Lansdown equity analyst, commented on the Halfords update: “The combination of essential retailer status, the roll-out of Halford Mobile Expert and an online offer that finally seems to have got its act together delivered a bumper Christmas for Halfords – the best it’s ever had.

“Looking ahead lockdown 3 is clearly a headwind, since if we’re all staying home fewer cars and bikes will need the kind of minor repairs Halfords specialises in. However we think supply disruption is probably a bigger issue going into the fourth quarter – there’s nothing more frustrating than a sold out sign and lack of product availability could shift customers back towards online competitors.”

Halfords shares (LON: HFD) are trading +4.61% at 290,30 (0946GMT).