(Alliance News) - Shares in Halfords Group PLC sunk on Thursday morning in London after the motor and cycling products retailer offered up a less than appetising outlook.
Shares in Redditch, England-based Halfords were down 19% at 160.40 pence each, adding to its disappointing performance in 2022, which has seen shares slump 55%.
In the year ended March 31, pretax profit increased to GBP96.6 million from GBP64.5 million the year prior, and was up from GBP22.7 million in financial 2020. The company proposed a final dividend of 6.0 pence per share, up from 5.0p a year ago.
Underlying pretax profit dropped to GBP89.8 million from GBP99.5 million, but was up from GBP56.9 million two years ago.
Revenue improved to GBP1.37 billion from GBP1.29 billion the year before, and increased from GBP1.14 billion two years ago.
"Our Motoring business in Retail and Autocentres has shown strong growth. Cycling sales stepped back in the context of strong comparators and supply disruption," Halfords explained.
Year on year, Retail revenue slipped to GBP1.00 billion from GBP1.04 billion, but Autocentres revenue was up to GBP368.0 million from GBP252.5 million.
Chief Executive Graham Stapleton said: "The strength and resilience of this performance is a great illustration of Halfords's transformation over the past two years. Our strategic shift towards motoring services has delivered higher, more predictable and more sustainable returns, and our acquisitions of both National and Iverson Tyres during the year mean that we are now the UK's largest motoring service provider."
"Motoring now represents over 70% of Halfords's total revenue, and the fact that our products and services in this category tend to be needs-based rather than discretionary will help us to navigate our way through the well-documented macroeconomic uncertainty that we are currently seeing," he added.
Halfords also noted sales of e-bikes, e-scooters and accessories was up 74% on two years ago, and servicing for electric cars in its garages has almost tripled year-on-year.
Stapleton said: "While rising inflation and declining consumer confidence will naturally present short-term challenges for any customer-facing business like ours, we remain confident in Halfords's long-term growth prospects due to our service-led strategy and the enduring strength of our brand, people, products and services."
Looking to financial 2023, Halfords is guiding for underlying pretax profit between GBP65 million and GBP75 million.
It added: "We believe we are well-positioned, given our market leadership position in both motoring and cycling, and our strong balance sheet, to emerge from this challenging trading environment in a relatively stronger position."
By Paul McGowan; paulmcgowan@alliancenews.com
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Halfords (HFD)