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October 4, 2012 8:43 am
A surge in sales of bikes and cycling accessories, on the back of the Olympics and Tour de France, helped Halfords beat forecasts for the second quarter.
Sales from stores open at least a year rose 4.6 per cent in the 13 weeks to September 28, with like-for-like cycling sales up almost 15 per cent.
The better-than-expected performance – after a string of disappointments – sent Halfords shares up 14 per cent to 303.5p at the close on Thursday.
Paul McClenaghan, commercial director, said there had been strong demand for Halfords’ range of bikes designed by Olympic gold medallists Chris Boardman and Victoria Pendleton.
“The Boardman and Pendleton ranges really resonated with the customers during the Olympic period,” he said. “The exposure that Chris had during the Tour de France and Victoria during the Olympics helped to raise the profile of the brand.”
He said the success of the Boardman range “allowed us to sell bikes over £1,000 on a regular basis”.
But Halfords’ mid to premium Carrera range also benefited from customers “who wanted to get back into road cycling during the course of the Olympics”.
Cyclists kitting themselves out for a return to the sport also helped drive sales of cycling clothing and accessories, where the group had strengthened its range.
Halfords, which on Tuesday named former head of Pets at Home Matt Davies as its new chief executive, said that as a result of the better performance, first-half pre-tax profit was expected to be £40m-£42m – above the consensus of analysts’ forecasts of £35.8m.
Similarly, full-year pre-tax profit would be in the upper half of the £62m-£70m range.
However, a poor performance in the first quarter, when Halfords cycling and camping sales were hit by the wet weather, still meant like-for-like retail sales fell 1.6 per cent in the first half.
Halfords Autocentres car repair and maintenance business also saw like-for-like sales rise 12.4 per cent in the second quarter, the best performance since the unit was acquired nearly three years ago.
Philip Dorgan, analyst at Panmure Gordon, said: “The second-quarter performance is a very strong turnaround after the depths of the first quarter. While perhaps some of the improvement is a one-off, the new chief executive has a stronger platform than he might have expected as he starts his first day.”
Dennis Millard, chairman, said Halfords remained cautious despite the better-than-expected performance.
A “cold hard winter”, as long as there was not too much snow, would be better for the car repair business because this would mean windscreen wipers and batteries would wear out more quickly. A mild winter would be less helpful.
The strength of Christmas trading would also be a crucial factor, as it’s “an important time of the year, particularly in cycling”, he said.
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