Halfords: Best ever Christmas week
Halfords’ third quarter trading update reveals that revenues rose 11.5%, including the group’s best ever Christmas week. That reflects a 30.5% increase in Autocentre and 7.7% increase in Retail revenue. The group saw particularly positive results from Online Cycling sales and the Halfords Mobile Expert proposition.
Graham Stapleton, Chief Executive Officer, commented: “We are pleased to have delivered a strong performance under hugely challenging circumstances, including our best ever Christmas week. Despite a large reduction in traffic on the roads, our strategically important Autocentres business saw significant growth, with particularly strong demand for the services of our growing fleet of Halfords Mobile Expert vans.
“We are currently carrying out over half a million services and repair jobs on cars and bikes each month, and therefore continue to play an essential role in keeping the UK moving during this pandemic. Throughout the crisis we are privileged to have been able to offer free checks and discounts to 239,000 NHS workers, teachers and Armed Forces staff to help them keep their vehicles safe and roadworthy.
“The health and safety of our colleagues and customers remains our number one priority and I would like to offer my sincere thanks for their unwavering loyalty and support.”
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown said: “The combination of essential retailer status, the roll-out of Halford Mobile Expert and an online offer that finally seems to have got its act together delivered a bumper Christmas for Halfords – the best it’s ever had.
“We have been long-term fans of Halfords – and at times that’s been a tough place to be. The transition from out of town warehouse retailer to service led specialist has been a difficult one, but the initiatives begun several years ago now seem to be bearing fruit. Drawing on staff expertise to deliver services alongside retail gives the group a clear differentiator from online competitors and seems to be pulling customers through the door, meanwhile, the Mobile Expert proposition increasingly means auto centre expertise can be delivered where and when a customer needs them.
“Looking ahead lockdown 3 is clearly a headwind since if we’re all staying home fewer cars and bikes will need the kind of minor repairs Halfords specialises in. However we think supply disruption is probably a bigger issue going into the fourth quarter – there’s nothing more frustrating than a sold out sign and lack of product availability could shift customers back towards online competitors.
“Overall though there’s a lot to like in these numbers. Increased investment and restructuring could hold back cash flow and the balance sheet at the full year, but once the heavy lifting’s out of the way Halfords could start to really motor.”