Halfords lifts revenue and margins in first half, keeps full-year guidance

Investing.com -- Halfords Group Plc (LON:HFD) on Thursday reported higher revenue and improved margins for the 26 weeks to Sept. 26, saying it remained on track to meet full-year expectations after the motoring and cycling services provider posted £893.3 million in revenue, up from £864.8 million a year earlier, while gross margin widened to 51.4% from 49.4%.

Underlying profit before tax edged up to £21.2 million from £21 million, while reported profit before tax declined to £17.2 million from £17.8 million. 

The company cited 4.1% like-for-like sales growth, driven by 9% growth in cycling and 4.3% in Autocentres, with retail like-for-like sales up 4%. 

Retail revenue rose to £533.2 million from £516.1 million, and Autocentres revenue increased to £360.1 million from £348.7 million.

Halfords reported £27.6 million of free cash inflow, resulting in £18.6 million of net cash, compared with £1.3 million in the prior year period. 

The interim dividend remained 3 pence per share, unchanged from a year earlier. Operating costs rose 7.9% to £433 million from £401.1 million, reflecting labour and cost inflation. 

Group underlying EBITDA was £89.5 million, broadly flat with £89.4 million a year earlier, and underlying EBIT remained £26.4 million.

The Redditch-based company reported gross profit of £459.2 million, up from £427.5 million. Non-underlying items totaled £4 million, primarily related to organisational restructuring costs tied to warehouse management system implementation issues, resulting in £3.1 million of related costs and £0.9 million associated with closures. The company reported that warehouse challenges at its Coventry distribution centre had been resolved.

Chief executive Henry Birch in a statement said cycling was a “stand-out performer, with LFL sales up 9%,” and said consumer garages “also performed particularly well, up around 8%,” referring to Fusion garage rollouts. 

He added, “While the operating environment remains unpredictable, our combination of needs-based products and services, as well as market leading positions in both motoring and cycling, give us the confidence that we will continue to grow our business in line with our plans.”

Halfords reported 79 Fusion sites operating during the period, aiming for about 150 by fiscal 2027. 

Membership in the Halfords Motoring Club reached about 6 million, including more than 400,000 paid members generating about £20 million in annual subscription revenue. 

The company said consumer garages posted sales growth of about 8% despite continued declines in the tyres market.

Halfords reaffirmed guidance for fiscal 2026 underlying profit before tax in line with consensus expectations and projected free cash flow within the previously guided range of £60 million to £70 million. The company said its next update is scheduled for April 2026 ahead of full-year results.