LONDON (ShareCast) - (Sharecast News) - Halfords said it would spend up to £20m a year extra on improving stores and integrating services to keep up with changing consumer trends.


The bike and car parts retailer said annual capital spending would increase to as much as £60m from guidance of about £40m. Graham Stapleton, who became chief executive in January, said Halfords would fund the investment with cost and capital efficiencies.

Pre-tax profit will be broadly unchanged in 2020 from 2019 despite the extra investment and will rise at a rate in mid single digits after that, Halfords said.

The company left debt and capital targets unchanged but said it would preserve the annual dividend and aim to increase it every year. It is also targeting increased free cash flow.

The FTSE 250 company's shares fell 4.4% to 321p at 08:19 BST.

Halfords reported solid trading in an update on 4 September as like-for-like sales increased 2.8% in the 20 weeks to 17 August. Stapleton said the company had a good business but needed to improve to compete in a rapidly changing retail market.

Under the strapline "supporting and inspiring a lifetime of motoring and cycling" he promised to invest in stores, garages and digital platforms. The statement was short on specifics but Stapleton is due to give more detail at an investor presentation.

Stapleton said: "We are a strong and growing business, that benefits from a solid financial platform and highly experienced and capable colleagues. However, customer behaviours and the competitive environment are changing and we face an increasing number of headwinds."

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