Halfords full-year profits have plunged as it grapples with “very tough markets”.
For the year ended March 29, the cycling and motoring retailer posted an underlying pre-tax profit of £36.1m, down 18.3% from last year, but in line with revised market guidance.
While revenue grew 7.9% to £1.7bn, Halfords said tough trading conditions persist, and that it expects volumes to fall or be flat in key product areas this year as it sees continuing declines in the consumer tyres and cycling markets, and in consumer demand for big ticket purchases.
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The business said “inflation remains a material headwind”, particularly driven by the 10% increase in the national minimum wage.
“More recently we have seen very significant increases in sea freight rates, with spot rates more than doubling since the start of our financial year,” the group said.
Meanwhile, the retailer’s autocentres delivered robust performance, with revenues up 17.6% and 10.7% on a like-for-like basis.
Chief executive Graham Stapleton said: “This has been a year of strong strategic and operational progress for Halfords, and we are pleased to have delivered a resilient financial performance against challenging core markets. We have continued to invest in our strategically important services business, which for the first time now represents over half of our total revenues.
“Our 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. In a recent survey of 6,000 tyres at Gatwick, Manchester and Edinburgh airports, we found that one in four vehicles had tyres that were dangerously worn or damaged.
“We are determined to improve tyre safety in the UK, and we are equally committed to supporting our customers through the cost-of-living crisis, by delivering great value when they need it most.
“While the short-term outlook remains challenging, we continue to build a unique, digitally-enabled, omni-channel business, which is well positioned for profitable growth”.
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