Halfords riding high in the City

THE car parts-to-bicycles retailer Halfords is expected to tell the City it remains firmly in acquisition mode when it rolls in with strong annual profits this week.

Analysts say it is probably too early to get a detailed update on the integration of car servicing firm Nationwide Autocentres, which Halfords only bought in February.

But the acquisition was well-received by the City along with a trading update the following month that revealed the company was to close its seven loss-making stores in the Czech Republic and Poland.

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John Stevenson, retail analyst at broker KBC Peel Hunt, said: "Unfortunately it may be a little early to get something on the impact of Nationwide Autocentres.

"But I think they are after more acquisitions, and are looking to hire a head of acquisitions."

Halfords said in a trading update last March that it expected to beat City profit forecasts, leading to a rash of upgrades. The City consensus for pre-tax profit is 115.1m, with a full-year dividend consensus of 18.75p.

Sales at shops in the UK and Ireland open at least a year were up 0.8 per cent in the 11 weeks to 19 March, with a 13 per cent leap in sales of car maintenance products during the bad weather.

Stevenson said: "One of the strengths of Halfords' car business is that it is often a distress purchase, not a discretionary one.

"If your exhaust or windscreen wiper falls off, or your battery fails, you have to buy."

The market will also be interested in what chief executive David Wild has to say about the scope for expanding market share in children's bikes. It is estimated that Halfords has a 30 per cent share in British bikes overall, but only between 20 and 25 per cent in children's cycles.