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* Cycling business like-for-like sales up 57.1% in Q1
* Motoring revenue down 45.4%
* Sees full year loss of 10 mln stg in worst case scenario
* Shares down 8%
(Adds detail, shares)
LONDON, July 7 (Reuters) - British retailer Halfords
said underlying cycling sales surged 57.1% in its latest quarter
as people avoided public transport during the coronavirus
lockdown, but a gloomy profit scenario sent its shares sharply
lower.
The stock was down 8% at 0804 GMT on Tuesday, extending
year-on-year losses to 27%, after Halfords said its worst case
scenario for the full 2020-21 year was for group like-for-like
sales to fall 9.5%.
That would mean a profit scenario ranging from zero to a
pretax loss of 10 million pounds ($12.5 million), down from an
underlying pretax profit of 55.9 million pounds in 2019-20.
As a provider of products deemed essential, Halfords was
able to trade through the lockdown period. It had 359 stores
trading as of July 3.
The group said cycling sales were also boosted by fair
weather and an increase in cycling as a health and leisure
activity.
"We believe cycling demand will remain strong throughout the
year and we will work hard to supply these unprecedented levels
of demand," it said.
Group like-for-like sales in the 13 weeks to July 3, its
fiscal first quarter, fell 6.5%, with the cycling performance
more than offset by a 45.4% decline in the higher-margin
motoring division as lockdown limited car journeys.
The group has withdrawn formal guidance for the 2020-21 year
because of the uncertainty surrounding COVID-19, but gave three
trading scenarios.
To get it through the crisis, Halfords has implemented a
range of measures to reduce costs and preserve cash, including
suspending its dividend, cutting non-essential spending and
making use of the government's business rates relief and wage
support schemes.
The group has 235 million pounds of liquidity.
"Despite the wider uncertainty caused by COVID-19, we remain
confident in the long-term prospects for Halfords," CEO Graham
Stapleton said.
($1 = 0.8013 pounds)
(Reporting by James Davey; editing by Kate Holton, Louise
Heavens and Barbara Lewis)
