Halfords to repay furlough grant as profits expected to soar

Halfords’ profit forecasted between £90m and £100m

Halfords (LON:HFD) announced on Monday that it expects to post a profit for the year between £90m and £100m as cycling’s boom during the pandemic continues.

Shares in Halfords rose by 19.86% to 347p upon the company’s announcement.

Following its better than expected performance, the company offered to repay the £10.7m received as a part of the government’s furlough scheme.

The company said: “The board has taken the decision to repay in full £10.7m of furlough income received, and the profit range is after this repayment.”

For the first seven weeks of Q4 2021, between 2 January and 19 February, like-for-like growth was up 6.2%, with retail and Autocentres at 13.3% respectively.

Halfords’ results indicates the sustained impact of the pandemic on cycling, according to investment director at AJ Bell, Russ Mould.

“The bullish trading statement from Halfords shows the love for cycling picked up by Britons during lockdown still has momentum,” Mould said.

“While previous cycling booms, including the one linked to the 2012 Olympics, have lost traction rapidly, it may be that the more dramatic impact of Covid on our lives will make the cycling habit stick this time.”

Halfords could also benefit from a return to normality, said Mould, as people will increasingly use their cars for longer journeys.

“On the auto side Halfords could be a beneficiary of a reopening of the economy as people get their cars on the road or at least consider longer journeys for the first time in months and want to get their vehicles checked over to ensure they are road-safe and ready.

More than £907m has been spent on cycling-related infrastructure and 1,400 miles of new bike lanes have been rolled across Europe since the pandemic began.

However, the company warned over further uncertainty in the weeks ahead. “Trading patterns continue to be volatile, with sales before Easter particularly difficult to predict while the UK remains in lockdown. As the country starts to open up once more, our overriding priority remains the health and safety of our colleagues and customers,” Halfords said.

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