Halfords expects full-year profit at upper end of guidance
By Josh White
Date: Tuesday 15 Apr 2025
(Sharecast News) - Halfords said in an update on Tuesday that it expects to report profit before tax near the upper end of its previously-guided £32m to £37m range for the year ended 28 March, following a strong finish to the year and continued momentum in its motoring services business.
The London-listed motoring and cycling specialist retailer said group like-for-like sales rose 2.3% for the year, building on a 5% increase in 2024.
Gross margin expansion accelerated in the second half, helped by pricing optimisation, improved procurement under its 'Better Buying' programme, and a favourable hedged currency rate.
The company also exceeded its £30m cost-saving target, offsetting over £30m of inflationary pressures.
It said its Autocentres division delivered like-for-like sales growth of 3.7%, with services, maintenance and repair (SMR) volumes offsetting continued softness in consumer tyre demand.
Retail like-for-like sales rose 1.7% for the year, with an improvement in both motoring and cycling categories during the second half.
Halfords highlighted the success of its 'Fusion' initiative, which was integrating motoring services across retail stores and garages.
Converted locations had seen sales increase by up to 50% and were on track to double profitability.
The company said it had now identified around 150 potential sites for conversion, with plans to upgrade at least half in the 2026 financial year.
Membership of the Halfords Motoring Club surpassed five million, accounting for nearly half of MOT volumes in its garages and covering around 15% of the UK car parc.
Around 370,000 were paying premium members, contributing £18m in annualised subscription revenue.
The group said it ended the year with a net cash position, supported by strong profitability and disciplined working capital management.
Looking ahead, Halfords said it expected to fully mitigate the estimated £23m of additional labour costs arising from changes in the minimum wage and National Insurance thresholds announced in the Autumn Budget.
Mitigation plans included further pricing optimisation, procurement efficiencies, and continued portfolio and strategic development.
However, the company noted ongoing volatility in retail sales and an uncertain consumer outlook.
The update also confirmed a leadership change, with Graham Stapleton stepping down as chief executive after seven years.
He was being succeeded by Henry Birch, who was joining the business this week.
"This is a performance to be proud of, mitigating more than £30m of inflation in what continued to be a very challenging trading environment in the 2025 financial year," said chief executive officer Graham Stapleton.
"I want to thank every single Halfords colleague for their hard work in achieving a significantly stronger result than we anticipated at the start of the financial year.
"After seven years leading the transformation of Halfords from a cycling and motoring retailer to an omnichannel motoring services super-specialist, most recently brought to life through the Fusion programme, it is time for me to hand over the reins for the next phase of the business's evolution.
"I wish Henry and the team all the best."
Halfords said its full-year results were scheduled for release in June.
At 0924 BST, shares in Halfords Group were up 9.09% at 135.5p.
Reporting by Josh White for Sharecast.com.
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