Cycling surge boosts sales at Halfords

Halfords has delivered a “strong” trading performance in the first half of its FY21, with like-for-like sales up by 5% in the 20 weeks ended 21 August 2020. 

According to the group, this was largely driven by a larger cycling market, boosted by the “positive impact” from the current staycation trend, its web platform, and increasing scale in its motoring services business.

The group also delivered “strong growth” in its areas of strategic focus. Service-related sales were up by 6.3%, for example, while online sales soared by 160%, representing 54% of total revenue in the period. 

It comes as the group has tripled its investment in the ongoing development of its web platform over the last 12 months, in a bid to “enable a dramatic shift to online ordering”.

The group has also “reaped the benefits” in motoring services of a more scaled operation, and was able to “move quickly” to capitalise on the continued strong demand for cycling products, with sales of electric bikes and scooters up 230% year-on-year.

In addition, cycling services have reportedly been boosted by its free 32-point bike check and the Government’s Fix your Bike Voucher scheme. 

Assuming expected demand levels in September, underlying H1 FY21 pre-tax profit is expected to be in the range of £35 to £40m.

Nonetheless, “significant uncertainty” remains for the second half of FY21. 

Halfords said that “given the natural fall-off in the relative strength of cycling and staycation products during winter months”, alongside a difficult economic outlook, pre-tax profit for the period could be “significantly lower” than the first half of FY21. 

Graham Stapleton, CEO, said: “This 20-week trading period started on 4 April and therefore coincides with the most significant impacts of Covid-19 in the UK.  

“We are pleased to have delivered a strong trading performance during the period.  We have also seen a return to growth in our motoring business, driven by an increase in car journeys and by a high level of demand for staycation-related products such as roof bars and roof boxes.” 

He added: “However, there is still significant uncertainty around the impact of COVID-19 and the macro-economic environment in the coming months, and as a result we are cautious on the outlook for the remainder of this year. 

“Looking further ahead, we are confident in the long-term strategy of our business and in the growth prospects of the cycling and motoring markets in which we operate.”