Halfords on right road to meet profits targets

Published on Thursday 20 November 2008 21:17

CAR parts and bike seller Halfords said it remained on track to meet profit targets, despite a further slowdown in sales in recent weeks.

The group reported pre-tax profits of 49.1 million for the 26 weeks to 26 September, an increase of 3.2 per cent on a year earlier after efforts to boost margins offset a 1.1 per cent decrease in like-for-like sales over the period.

Halfords said the period since the end of the half-year had seen a further slowing in like-for-like sales, but stressed it was still confident of delivering profits in line with expectations.

Chief executive David Wild said the core areas of Halfords' business were doing well in the current economic climate, particularly the car maintenance sector. He added that the company worked hard to maintain market leadership in this category, with a typical Halfords store holding parts for about 90 per cent of the cars in the UK.

The chain has also benefited from the migration of technology such as digital music and satellite navigation to the car.

But Halfords said the market proved more challenging during the half-year, as continued volume growth was offset by the decision of the two biggest brands in the market to reduce their prices on new products.

Halfords said the cycle market continued to enjoy a period of encouraging growth.

The group has 455 stores with more than 10,000 staff and more than 10,000 product lines. Own brands include Ripspeed for cars enhancement and Bikehut for cycles.

Freddie George, a retail analyst at stockbroker Seymour Pierce, said yesterday's profits figure was slightly better than his forecast. He added: "We will not be changing our 2008-9 'top of the range' pre-tax profit forecasts of 94.5m. The business is partly counter-cyclical and is approaching easier comparatives in the third quarter."