Problems with utilizing public transport for the reason that begin of the pandemic have prompted an increase in demand for automotive providers and a surge in bike gross sales at Halfords, though the corporate has warned that earnings may have a “natural fall-off” later this 12 months.
Sales at Halfords autocentres have been greater than a fifth decrease throughout lockdown regardless of its garages remaining open, as individuals have been advised to remain at house. Sales have since rebounded with a 54.7 per cent bounce in July and 65.2 per cent in August. Total autocentre gross sales are up by 30.2 per cent this 12 months thus far however they’re down by 7.6 per cent on a like-for-like foundation.
Graham Stapleton, 52, chief government, stated that whereas there have been the identical variety of vehicles on the highway as earlier than lockdown, individuals have been driving extra and taking shorter journeys.
Halfords reported a 30 per cent improve within the variety of providers it had carried out this 12 months, whereas its motoring retail arm has returned to development on the again of the staycation development that has spurred gross sales of bicycle racks and roof bins. Halfords has 444 retail shops within the UK, which account for 86 per cent of its enterprise, and 367 autocentre garages. Online orders account for greater than half of the group’s gross sales.
Its biking enterprise has continued to increase with like-for-like gross sales rising by 71 per cent final month. Halfords stated it had benefited from “favourable market shifts” together with individuals looking for alternate options to public transport and selecting biking as a strategy to keep wholesome, in addition to the federal government’s Fix Your Bike voucher scheme. The business-to-business division, which incorporates the state Cycle2Work supply, has boosted gross sales by 1 / 4 over the previous 20 weeks.
Halfords stated that it anticipated half-year earnings to be within the vary of £35 million and £40 million, in contrast with £27.5 million final 12 months.
Despite the increase in latest gross sales, shares in Halfords dropped 5½p, or three per cent, to 178½p as traders have been unsettled by its warning about second-half earnings. Halfords stated: “The macro headwinds we are likely to face, the continuing cost of operating with Covid-19, and a natural fall-off in the relative strength of cycling and staycation products during the winter, means that profit in the second half could be significantly lower than the first half.”
Mr Stapleton careworn: “There’s so many significant uncertainties in the UK, which is why it’s difficult to provide any meaningful guidance.”
Analysts at Peel Hunt, the dealer, stated they believed administration was in all probability overdoing the unfavourable temper music for the second half: “For Halfords to be below the first half would mean that it delivered by far its worst second half as a quoted company.”