Halfords Delivers Profit at Upper End of Guidance Despite Challenging Conditions
Why we think this is good
Halfords has delivered a strong performance, with profit expected to be at the upper end of guidance despite facing headwinds from volatile retail sales, uncertain consumer outlook, and supply chain challenges. The company's Autocentres segment performed well, and the Fusion rollout program continues to drive significant sales and profitability improvements. However, the outlook remains uncertain, and the company faces increased costs from changes to the Minimum Wage and National Insurance thresholds.
Key Points
- Profit expected to be at upper end of £32m to £37m guidance range
- Positive group like-for-like sales growth of 2.3%
- Autocentres (ex-Avayler) delivered 3.7% LfL sales growth
- Strong cash generation, closing year with net cash
- Facing increased costs from Minimum Wage and National Insurance changes
- Uncertain outlook due to volatile retail sales and supply chain pressures
Summary
Halfords Group plc (HFD) has reported a strong finish to FY25, with underlying Group profit before tax expected to be around the upper end of the £32m to £37m range previously guided. The company delivered positive group like-for-like sales growth of 2.3%, with the Retail segment returning to positive LfL sales in H2. Autocentres (ex-Avayler) also performed well, with LfL sales growth of 3.7%. The company has generated strong cash through business profitability and working capital discipline, closing the year with net cash. However, the outlook remains uncertain, with the company facing increased costs from changes to the Minimum Wage and National Insurance thresholds, as well as potential indirect impacts on the supply chain. The company plans to accelerate the Fusion program, which has delivered exceptional returns to date.