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Halfords expected to post slight dip in full-year profits

Published 29/05/2016

Halfords will posts annual results on Wednesday amid signs bike sales are back on track
Halfords will posts annual results on Wednesday amid signs bike sales are back on track

Retailer Halfords will reveal the progress of its turnaround plan when it unveils full-year results in a quieter week for corporate news.

The car parts to bicycles chain posts annual results on Wednesday amid signs that its bike sales are back on track.

The group has reported two quarters of like-for-like bike sales growth in a row, with a 1.9% rise in the final three months of its year.

This marked a welcome recovery for the group, which was hit by a dire performance in its peak summer trading period last year.

Halfords , which operates 463 stores, posted a 5.9% fall in half-year underlying profits to £46.4 million after the bike woes last summer, when sales dropped 11% between mid-July and mid-August.

Recently-hired boss Jill McDonald is spearheading an overhaul to revive the retailer's flagging performance, including a renewed push in the bike sector, with Olympian and Tour de France champion Sir Bradley Wiggins signed up to launch a new children's range.

Full-year profits are expected to drop, but only marginally, to £79.9 million from £81.1 million the previous year thanks to more robust trading in its car maintenance arm and travel offering, which sells products such as camping furniture.

It saw impressive trading at its Autocentre garages, which notched up a 2.5% rise in like-for-like sales over the year, while its travel arm saw sales surge 9.5% in the fourth quarter.

Andrew Wade, analyst at Numis Securities, said last summer's dismal bike sales were "increasingly looking like a weather-related blip".

A recent move to snap up two bicycle firms showed Halfords is making a fresh push into cycling.

Halfords said last week that it had splashed out £18.4 million to acquire online company Tredz, along with Wheelies, the UK's largest provider of bicycle replacement for insurance companies.

Ms McDonald said on unveiling the deals that she continues to ''believe in the long-term growth potential of the cycling market''.

Combined, the two South Wales-based companies pulled in revenue of £32 million last year.

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