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Halfords has predicted that it will see a rise in both profits and sales in both the mid-term and mid-to-long term, as announced at its Capital Markets Day for investors and analysts.
In the mid-term, the group expects sales to grow to around £1.9bn and profit-before-tax to grow to £90-£110m. It attributed this to a mix of its core markets recovering from the “very challenging” current conditions, a growing market share, its acquisition synergies maturing, and the use of “scaled and rich” customer and vehicle data to drive customer lifetime value.
In the mid-to-long term, it expects sales to grow to around £2.2bn, and profit-before-tax to grow to £130-£150m, as it “invests in driving profitable revenue growth” and continues scaling its Autocentres business.
In addition, its SaaS provider Avayler is expected to deliver revenues of £25-35m and EBIT of £5-8m, as it is rolled-out to more clients.
It ultimately expects to deliver FY23 underlying profit before tax within its current guidance. It added that the business is underpinned by a strong balance sheet, and that it expects a positive free cash flow throughout the mid and mid-to-long-term to “keep us within our prudent leverage targets going forward”.
In its latest update to investors, the group said that since 2018, its strategy has “seen us evolve into a consumer and B2B services-focused business, with a greater emphasis on motoring”, and that across that period revenue has grown by around 40%.
It hailed its “unique and scaled” platform, which it said has built an interconnected infrastructure of stores, garages and vans, and created a “data and digitally-enabled business”.
Graham Stapleton, CEO of Halfords, said: “Since 2018, we have doubled the size of our B2B and services business and have become the UK’s biggest motoring services provider, increasing our group sales by c.40%. From here, we see significant potential for future growth, both in our existing business and in adjacent markets.
“We are today providing a clear roadmap for the mid-term, as we focus on leveraging the unique platform that we have built. We will also be outlining the exciting longer-term strategic transformation opportunities that we see ahead as we unlock the enormous potential within the Halfords brand and infrastructure.”
