Halfords reports 10.5% drop in annual profits
Retailer Halfords has posted a 10.5% fall in annual profits as it took a hit from the weak pound and saw the timing of Easter knock recent sales.
The c ar parts-to-bicycles chain reported pre-tax profits of £71.4 million for the year to March 31, down from £79.8 million a year earlier, as the pound's plunge since the Brexit vote sent the costs of imported goods surging by £14 million.
It also revealed a 1.2% drop in like-for-like retail sales in the final three months due to the later timing of Easter this year.
But the group said retail sales were 3.9% higher on a more comparative basis for the 15 weeks to April 28.
Outgoing chief executive Jill McDonald - who is leaving in October to head up Marks & Spencer's clothing, home and beauty business - said: " Profit performance for the year was impacted by the weaker pound, but our plans are well developed and I am confident this will be offset over time."
Halfords warned the weak pound will continue to impact profits, but said plans to offset the cost pressures were "encouraging".
Ms McDonald added that while there was "uncertainty" in the consumer spending outlook given the squeeze on household finances from rising inflation, the group has not so far seen any impact of this on trading.
She said: "We enter a challenging period from a macroeconomic perspective, with uncertainty over consumer spending and sterling depreciation bringing input cost headwinds.
"However, we approach this on the front foot and from a position of strength."
On an underlying basis, pre-tax profits were 7.5% lower at £75.4 million.
Despite the Easter-affected final quarter, like-for-like group sales rose 2.7% over the year, with retail sales up 3.1%.
It saw a strong performance from bikes, with sales leaping 5.1% higher, while travel solutions sales lifted 7.9%.
Its autocentres service delivered a 0.6% rise in sales across the year.
The group is now hunting for a replacement for Ms McDonald ahead of her departure in the autumn.
Dennis Millard, chairman of Halfords, said: "We are grateful for the positive contribution Jill has made across the business and she will leave Halfords with a strong team in place and a clear direction to drive future growth."
Ms McDonald has been leading a turnaround at Halfords that has helped revive flagging sales, although the past year has been blighted by the cost impact of the pound.