Halfords Regulatory News (HFD)

21st July 2011

INTERIM MANAGEMENT STATEMENT

Halfords Group plc, the UK's leading retailer of automotive/leisure products and operator in auto servicing, announces its Interim Management Statement for the 13 weeks to 1 July 2011.

HIGHLIGHTS

·; Cycling LfL sales up 11.5% driven by premium and new entry-level bikes

·; Wefit 3Bs penetration increases to 22.4%, and Audio fit sales up 38%

·; Retail online sales up 9.2% with 86.7% collected in store

·; Autocentres sales growth continues, +7.4% with LfL sales up 2.1%

RETAIL

Conditions for the UK consumer remain difficult. Within this environment Halfords cycle sales have grown strongly, particularly in our premium brands; Boardman, Voodoo and Carrera, the latter benefiting from promotional activity in preparation for a new range launch in July. Our new Trax Bikes are successfully delivering our entry-level cycle strategy. Within Car Maintenance the growth in penetration of our fitting services continues, and in Car Enhancement we are growing market share. Product promotional activity has also proved popular and supported the delivery of gross profit.

As referenced at the Preliminary Results announcement, appropriate investments are being made in margin to maximise profits. This, together with the mix effect from the strong sales of lower margin premium and Trax ranges (notwithstanding that it is still early in the financial year), is anticipated to deliver a gross margin reduction of at least 100bps for the full year.

AUTOCENTRES

Despite the challenging environment for the garage sector, Halfords Autocentres' revenues have continued on a positive and improving trend since relaunch. Halfords brand is gaining traction in car servicing as we help motorists with quality service at affordable prices. We are investing further in marketing to drive even greater awareness.

CAPITAL RETURN AND DIVIDEND

The company remains in a sound financial position. To date we have purchased 8.4 million shares for £32.4 million at an average price of 385.9 pence per share through our share buyback programme that commenced on 7 April 2011. The final dividend of 14 pence per share will, subject to shareholder approval at the AGM on 2 August 2011, be paid on 5 August 2011.

David Wild, Chief Executive Officer, commented:

"Halfords is continuing to trade effectively in a difficult environment for UK consumers. Our response to the economic challenges is a clear trading strategy that offers value through great prices, quality, innovative products and expert service. The results can be seen most clearly in our strong cycling sales, where customers have responded favourably to our promotions and new products. Our position is supported by "that's helpful that's halfords", a marketing campaign that reinforces Halfords unique service proposition.

We are also pleased with the progress in our Autocentres business. The positive trend in sales has been achieved at a difficult time for motorists when they are reducing mileage. It demonstrates the strength of our proposition and the potential for the Halfords brand to grow in the garage-servicing sector.

We remain confident in the cash generation capabilities of the business and with the combination of recommended dividend payments for FY11 together with the share buyback, we will return a total of £120m to shareholders."

Notes

The information in this announcement is based on unaudited management accounts information

1 The sales benefit within Retail from the timing of Easter is estimated to be c. 1.0%.

2. Like-for-like sales represent revenues from stores or autocentres trading for greater than 365 days. Where appropriate, revenues denominated in foreign currencies have been translated at constant rates of exchange.

3. Retail and Group revenues exclude £1.9m of revenues from Central Europe in Q1 FY11.

Analysts Call

There will be an analysts call today at 8.15 am.

Dial in details are:

Participant dial-in: 0800 368 1986

No PIN required

There will be a playback facility available until midnight on Wednesday 27 July.

To access this, the details are:

Replay Access Number: 0800 368 1890

Replay Access Code: 378434#

Enquiries:

Analysts:

Halfords Group plc

Andrew Findlay, Group Finance Director +44 (0)207 379 5151 (On the day)

Louise Richardson, Investor Relations Officer +44 (0)1527 513113 (thereafter)

Media:

Maitland

Neil Bennett +44 (0)207 379 5151

Richard Farnsworth +44 (0)207 379 5151

Financial Calendar

Halfords will announce its second Quarter Trading Statement on 6 October 2011.

Notes to Editors:

www.halfords.co.uk

www.halfordscompany.co.uk

www.halfordsautocentres.co.uk

Halfords Group plc

The Group is the UK's leading retailer of automotive, leisure and cycling products and through Halfords Autocentres also the UK's leading independent car servicing and repair operator. Halfords customers shop at 466 stores in the UK and Republic of Ireland and at halfords.com for pick-up at their local store or direct home delivery. Halfords Autocentres now operates from 242 sites nationally and offers motorists dealership quality MOTs, repairs and car servicing at affordable prices.

Halfords employs approximately 11,000 staff and sells over 14,000 different product lines with significant ranges in car parts, cycles, in-car technology, child seats, roof boxes, outdoor leisure and camping equipment. Halfords own brands include the in-store Bikehut department, for cycles and cycling accessories, Apollo and Carrera cycles and exclusive UK distribution rights of the premium ranged Boardman cycles and accessories. In outdoor leisure, we sell a premium range of camping equipment, branded URBAN Escape. Halfords offers customers expert advice and a fitting service called "wefit" for car parts, child seats, satellite navigation and in-car entertainment systems, and a "werepair" service for cycles.

Cautionary Statement:

This report contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of Halfords Group plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Halfords Group plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.