9:49 am, June 27, 2024
Automotive giant Halfords has seen its annual profits tumble despite the firm’s Autocentres benefitting from increased sales.
The group, which sells everything from car parts to bicycles, endured a difficult year with consumers slashing spending on ‘non-essential big ticket items’.
In the 12 months ending March 29, the group reported an 18.3% drop in underlying pre-tax profits to £36.1m. Meanwhile, on a statutory basis, pre-tax profits tumbled 45% to £19.9m.
Bosses have put the decrease down to a fall in demand for bikes, with like-for-like cycling sales dropping 2.8%.
However, it was not all bad news, with Halfords’ Autocentres business enjoying a 10.7% rise in sales throughout the year. Largely as a result of those sales, the wider group saw growth of 5%.
Directors say they do not expect a change in buyer behaviour in the new financial year, with larger items such as bikes and touring products, as well as tyres, expected to be hard to shift.
The latest figures include tyre supply chain business, which has since offloaded as part of an outsourcing deal.
The group also says it was impacted by high inflation over the year, with costs rising by around £37m bringing its total cost inflation to about £120m in the past three years.
Chief executive Graham Stapleton said: ‘The Autocentres business was the star performer yet again – this was delivered despite a challenging tyre market, where drivers continue to delay the replacement of unsafe tyres.’
He added that the ‘short-term outlook remains challenging’ but the group was ‘determined to improve tyre safety in the UK, and we are equally committed to supporting our customers through the cost-of-living crisis’.
Halfords said it had resorted to promotions to boost cycling sales, ramping this activity up by 33% in the second half of the financial year.
It also said more customers are purchasing cycling products on credit, affecting the firm’s margins.
