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LONDON, May 11 (Reuters) - Shares in British bicycles and
car parts retailer Halfords soared as much as 26% on
Monday, boosted by the government's announcement that people
should consider cycling to work as the coronavirus lockdown is
eased.
Transport minister Grant Shapps said on Saturday that even
with public transport reverting to a full service, once social
distancing rules were taken into account there would only be
effective capacity for one in 10 passengers in many parts of the
UK transport network, just a tenth of the pre-crisis
capacity.
He urged Britons to continue to work from home where
possible, but said those who did have to commute to work should
consider cycling or walking rather than taking to their cars.
He said the UK's road infrastructure would be changed to
accommodate more cyclists.
Shapps also said E-scooter trials would be brought forward,
with the potential for rental vehicles on UK roads as early as
June.
Halfords is Britain's biggest cycling retailer with a market
share of about 25% and 450 repair centres. It is also market
leader in E-scooters.
"Saturday's evangelical Department of Transport speech could
have been written by Halfords' CEO, with its very helpful
remarks on cycling and E-scooters," said analysts at Peel Hunt.
"We have generally been loath to forecast V-shaped
post-Covid recoveries but this might be different. Our new
numbers today reflect a very strong bounce-back in sales and
EBITDA, (core earnings) led by cycling with motoring lagging,"
they said.
On Monday, Halfords launched a campaign aimed at the
estimated 7 million British adults who have bicycles languishing
in sheds and garages. It said it will provide a free "32-point"
check on neglected bikes to help people get ready for the post
lockdown commute.
Halfords noted that only 4% of commuter journeys are
currently made by bike, while cycling accounts for just 2% of
all journeys. In the Netherlands, it is 27%.
In March, Halfords said it was planning for a sales decline
of 25% in its 2020-21 year and suspended its
dividend.
The stock was up 27.2 pence at 178.1 pence at 0821 GMT,
paring year-on-year losses to 25% and valuing the business at
356 million pounds ($440 million).
($1 = 0.8097 pounds)
(Reporting by James Davey; editing by Sarah Young and Hugh
Lawson)