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(Alliance News) - Halfords Group PLC on Tuesday reported a much smaller annual profit due to operating expenses but said sales in its new year have begun to improve as the lockdown eases.
Shares in Halfords were down 9.2% at 160.80 pence in London in afternoon trading.
Car parts and bicycle retailer Halfords posted a GBP19.4 million pretax profit for the 53 weeks ended April 3 compared to a GBP51.0 million profit for the previous financial year ended March 2019. The March financial year was one week shorter than financial 2020.
Redditch, Worcestershire-headquartered Halfords's revenue was 1.8% higher at GBP1.16 billion compared to GBP1.14 billion previously.
However, operating expenses were 6.1% higher at GBP556.7 million versus GBP524.6 million previously which led to a profit decline.
The company has continued to trade during lockdown as an essential retailer and has operated in most of its financial 2021 first quarter on a "dark-store"basis serving customers only from the store entrance. During April and May, some of these were converted to 'Lite' stores which are open but have limites on customer numbers.
In the 13 weeks ended July 3, group sales were down 2.8% from the prior year and down 6.5% like-for-like, far better than the 23% LfL decline in the four weeks to May 1.
The company has put cost cutting and cash preservation measures in place, suspending its dividend and reducing foods-not-for-resale spend. As at Friday last week it had GBP200 million of total liquidity available and GBP10 million of cash.
Halfords has withdrawn is financial 2021 guidance and is still cautious when its comes to the months ahead.
Chief Executive Graham Stapleton said: "The start of the current financial year has of course been dominated by the impact of Covid-19, and our status as an essential retailer was a clear endorsement of the wider role that Halfords has to play in keeping the UK moving. Having responded quickly and decisively to cater for the surge in popularity of cycling during lockdown, we are now seeing increased demand for motoring services and products as people start using their cars regularly again having not done so for the last few months.
"Despite the wider uncertainty caused by Covid-19, we remain confident in the long-term prospects for Halfords given the strong macro tailwinds within our market-leading Motoring and Cycling businesses."
By Anna Farley; annafarley@alliancenews.com
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