Halfords gets a boost from Brits on bikes
HALFORDS, the car maintenance and bicycle retailer, yesterday reported a 2.4 per cent rise in full-year profits to £92.4m as the demand for bikes and camping equipment surges in the downturn.
Finance director Nick Waller said: “The demand for bikes is sustainable, people are using cycling to beat congestion, for economic reasons and increasingly to help the environment.”
Halfords currently sells 1m bikes a year, equivalent to one in three bikes in the UK.
However, the group yesterday posted its first fall in revenues in 20 years, largely due to softening demand for in-car satellite navigation systems.
The group reported a 0.3 per cent drop in revenue to £794.7m for the 52 weeks in 2008 with like-for-like sales declining by 3.3 per cent.
The group said that while the recession took its toll, with sales falling in the third quarter, trading has since improved.
Chief executive David Wild said: “We naturally remain cautious given the continued fragility of the economy and consumer confidence.
“There are, however, clear indications that Halfords is well positioned to deliver further earnings growth in the year ahead,” he added.
The group is also benefiting from its car maintenance division, as repair their own cars more often. Halfords generates sales of £6m from its in-store fitting service alone.
The group said it plans to open 10 to 15 UK stores in the next year, and is confident about long-term European expansion.
Sat Navs have been hit by a drop in demand for big-ticket items, leading to price cuts of around 20 per cent, which has put margings under pressure. Yesterday the group raised its final dividend by 5.3p to 15.9p.