Halfords shares were riding high on Tuesday after the group released its first half-year results, which were punctuated with areas of optimism that shone through otherwise gloomy performance.

Group revenue was down just 0.1% in the first half of 2024 compared to 2023. Halfords faced tough comparables against last year when the company enjoyed strong growth and the flat revenue growth wasn’t a surprise.

Indeed, investors are evidently pleased that the decline in sales wasn’t more dramatic, and shares rose over 13% at the time of writing.

Autocentres’ like-for-like sales ticked marginally higher, while retail softened as consumers held off purchasing discretionary items such as cycles.

“Halfords continues to fight an uphill battle as weak consumer demand has put the brakes on growth over the first half. Marginal growth in Autocentres was offset by weakness in the Retail division, where cycling remains challenged. Price-conscious customers continued to trade down to budget ranges, and a lack of big-ticket discretionary sales has weighed on performance,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Halfords is leaning into cost cuts to help soften the impact on the profit line, with the group halfway towards its £30mn savings target.”

“The group’s confident that it can meet the market’s full-year forecasts, which are looking for underlying pre-tax profits of around £29mn. With £21mn already secured in the first half, this target now looks well within reach, especially as freight costs are expected to be at the lower end of previous guidance.”

Following in the footsteps of Kingfisher yesterday, Halfords took the half-year update as an opportunity to sound the alarm on the impact of National Insurance increases and what it means for earnings in the future.

“Halfords tries to stand out from its competition by delivering expert advice and assistance to customers, face-to-face, with more than 12,000 staff on the books,” Chiekrie said.

“That means the government’s recent decision to hike employers National Insurance contribution is set to really bite, adding around £23mn of direct labour costs next year, so the group will have to pedal even harder to try and offset these additional costs.”

European shares showed one of the first signs of approval for a decision made by Donald Trump since he won a second term on Monday.

Stocks rose on the news Hedgefund manager Scott Bessent was selected as Trump’s pick for Treasury Secretary, avoiding some of the more maverick choices that may have be detrimental to Europe.

Hopes are that Bessent’s background in finance and markets will soften Trump’s approach to tariffs that could be extremely damaging for US- Europe trade. Europe shares have been under pressure since Trump’s victory, and investors have cheered what may be the aversion of the worse scenario for European trade.

The FTSE 100 rose on the news, gaining 0.2% as of 12.40pm on Monday.

“The FTSE 100 made a decent start on Monday morning after US president-elect Donald Trump’s pick for Treasury secretary got a warm reception from the market,” said AJ Bell investment director Russ Mould.

“Hedge fund manager Scott Bessent is perceived as being a relatively conventional and safe pair of hands candidate and the market gains in Europe following the news were matched in Asia. Importantly, Bessent is seen as being less aggressive on tariffs than some of the rhetoric espoused by Trump on the campaign trail.

“A fall in bond yields in response to his unveiling suggests some of the concern about a new wave of inflationary pressures from import tariffs has eased and that Bessent might be able to do something to bring the US deficit under control. He has also spoken in favour of corporate tax cuts – solidifying a part of the new administration’s policy agenda which appeals to investors.”

The FTSE 100’s gains were reasonably broad on Monday, with around 60% of constituents trading in positive territory at the time of writing.

JD Sports was the top riser following an upgrade by Deutsche to ‘hold’ from ‘sell’. JD Sports shares sank after warning on profits last week amid slow US and UK trading. Shares in the sports retailer jumped 6% on the broker move shareholders could signal the worst of the selling is over.

Another company feeling the pressure of slow retail trade on Monday was Kingfisher. The DIY specialist called out Labour’s budget as a reason for reducing its profit outlook, as the group feels the pinch of slower trading and increased taxes.

“Shares fell sharply after the company detailed the effect of the Budget on its business. It’s a huge employer and the NIC rise will cost the group around £31 million, unless it finds ways to mitigate the increase. It’s latest sales snapshot has revealed deep caution prevalent among UK consumers in the run up to the Budget,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The rumour mill churning out expectations of widespread tax rises, dented sales in October, after a stronger performance in August and September. It meant that total group sales of £3.2 billion for the three months between August and October were 1.1% lower than the same period last year, on a like-for-like basis. As a result, it’s lowered the top end of its annual profit outlook, disappointing investors. The Budget has been a set-back as sentiment among shoppers had been improving, crucially for bigger-ticket items.”

Kingfisher was the top faller with losses of 12%.

Kingfisher shares are the latest casualty of the pessimism created by Rachel Reeves’ budget and its impact on consumer spending and business investment plans.

DIY specialist Kingfisher named the UK and French budgets as specific reasons for slow trading in Q3, which saw like-for-like sales fall by 1.1%.

As a result, Kingfisher has reduced its profit before tax outlook to a range of £510m to £540m from £510m to £550m. The adjustment is small but the mere fact Kingfisher has lowered its outlook has rocked shares sending them lower by 13%.

“After what was a strong first half of the year for Kingfisher, the DIY retailer’s latest trading update looks much more shaky, as the impact of Rachel Reeves’ recent budget may have dealt a significant hammer blow for the B&Q owner,” said Mark Crouch, market analyst at investment platform eToro.

“The rise in National Insurance costs has put pressure on Kingfisher’s profit outlook, shaving off the upper end of its projected earnings, and as consumers and businesses adjust to the latest Labour budget measures, this financial strain is becoming increasingly apparent.”

Although the share price reaction portrays doom and gloom for the retail, there were some signs of positivity. The UK business showed signs of strength with B&Q’s e-commerce platform growing 45% and Screwfix and Tradepoint increasing market share.

“Despite these challenges, Screwfix held up relatively well helping to offset some of the broader difficulties, posting modest sales growth. However, Kingfisher’s performance in France remains a concern, with sales continuing to fall. What first might have felt like a splinter at the start of the year for Kingfisher could develop into something worse if the current trends there don’t reverse,” Crouch explained.

Hummingbird Resources shares crashed to an all-time record low on Monday after the company announced it is facing significant funding constraints due to poor production at the Kouroussa Gold mine.

Hummingbird Resources shares were down 28% at the time of writing.

The heavily indebted gold miner said it faces financial difficulties despite its Kouroussa Gold Mine in Guinea reaching commercial production. Production figures fall short of the company’s previously announced target of 2,000-2,500 ounces per week, primarily due to mining capacity constraints and lower-than-expected mill feed grades.

The mine has achieved a four-week trailing average production of approximately 1,900 ounces, selling at an average price of US$2,473 per ounce, below current market rates due to existing hedging contracts.

The company announced in September this year that it had net bank debt of $135m. Poor production from Kouroussa is only making problems worse.

Hummingbird has acknowledged that even with commercial production achieved at Kouroussa, the group is unlikely to generate sufficient near-term cash flow to alleviate its current liquidity problems. These financial struggles are further complicated by loss-making operations at its Yanfolila site and payments that are due to the Mail Government.

The company is in ongoing discussions with financing partners to explore options, but the company’s high debt pile relative to its low market cap will make any resolution challenging.