Halfords profits beat expectations after cost savings and price rises
Recently-appointed boss Henry Birch said it reflected a ‘strong’ performance from the business and made progress with its growth strategy.
Halfords has revealed stronger-than-expected profits for the past year, supported cost savings and pricing measures.
The motoring and cycling retailer said it saw underlying pre-tax profits rise by 6.4% to £38.4 million for the year to March 28. It had previously pointed to profits between £32 million and £37 million.
Recently-appointed boss Henry Birch said it reflected a “strong” performance from the business and made progress with its growth strategy.
It came as the company sought to reduce costs in order to cushion the impact of inflation.
Halfords told shareholders that it saw around £33 million of cost inflation over the year, partly driven by the increase in the minimum wage.
It said it had offset this through cost savings worth around £35 million.
The group said it improved its profitability over the year through improving its buying operations and higher pricing.
It added that it expects to offset further cost inflation, partly linked to April increases in National Insurance contributions and the national minimum wage, through “a combination of pricing, buying and cost opportunities”.
Meanwhile, total revenues rose 0.1% to £1.72 billion for the year, with like-for-like growth of 2.5%.
The firm’s autocentres business saw like-for-like growth of 3.7%, while retail sales were up 2.1%.
The retailer also said that “warm spring weather and a late Easter” helped it keep momentum into the start of the new financial year, with its cycling business performing “very strongly”.
Henry Birch, chief executive of Halfords, said: “I am very pleased to be announcing a positive set of results for Halfords.
“The business has delivered a strong financial performance, made good strategic progress and has a clear plan in place to tackle external inflationary forces.
“It is an exciting time to be joining and I see significant potential to optimise and grow this fantastic business.”