7:51 am, January 13, 2023
Halfords has warned investors that a staff shortages and a slump in demand are likely to hit profits in 2023.
The retailer and MOT provider says that profits are expected to suffer in the face of a shortage of technicians and weak demand for tyres.
The outfit, which is listed on the London Stock Exchange, says its autocentres have been ‘unable to recruit enough skilled technicians’ ahead of the peak season for MOTs.
Graham Stapleton, chief executive officer at Halfords, said: ‘With unprecedented demand in our motoring services business, we are particularly impacted by the nationwide skills shortage, with recruitment proving to be extremely challenging in the current labour market.’
In an announcement to investors, Halfords also said that the ‘weak’ tyre market had lasted longer than first expected.
The prolonged slump is expected to hit profits, which have also been impacted by a decline in demand for high-ticket items in its retail business, largely as a result of the cost-of-living crisis.
As a result, the group has cut its pre-tax profit forecast to between £50m £60m, from a previous range of £65m to £75m.
Despite the current struggles, bosses expect tyre demand to recover through the course of the year and has taken actions to help recruit more skilled labour.
The news comes after the group revealed that it grew by 21.7 per cent in the quarter to December 30 against the same period last year, while like-for-like sales increased per cent.
Mr Stapleton added: ‘We have seen strong revenue growth in what are exceptionally challenging circumstances, and we have continued to grow our market share whilst also tightly managing our costs, inventories and cashflows.
‘Consumer demand for our services and needs-based categories, which now account for the majority of our revenue, continues to grow, and our Motoring Loyalty Club is exceeding expectations as customers recognise the value of its unrivalled discounts and offers.’
Shares were down 20.5 per cent at 171.1p yesterday (December 13).
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