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Halfords : raises profit outlook on British cycling boom

10/01/2020 | 03:03am

British retailer Halfords raised its first-half profit outlook on Thursday as a coronavirus-driven cycling boom continues but said it remains cautious about the second half.

The group, which sells motoring and cycling products and services, said its first-half pretax profit is now expected to be more than 55 million pounds, up from the 35 million to 40 million pounds previously guided.

Cycling has increased in popularity as many Britons avoid travelling on public transport during the pandemic and increasingly view it as a health and leisure activity.

Group like-for-like sales rose 22% year on year in the five weeks to Sept. 25, it said, with cycling product sales jumping 46%, helped by improved supply to meet unprecedented demand.

Motoring product sales rose 7.5%, while Halfords' garage business, Autocentres, achieved sales growth of 18%, prompting the group to launch a campaign to recruit hundreds of technicians.

However, Halfords is less optimistic about the second-half outlook.

"The potential impact of second waves of COVID-19 now seems more pronounced than just a few weeks ago, and the economic impact of an end to the furlough (job retention) scheme and the outcome of Brexit negotiations remains very uncertain," it said.

Shares in Halfords, up 7% this year, closed at 181.4 pence on Wednesday, valuing the business at 360 million pounds.

(Reporting by James Davey; Editing by David Goodman)

© Reuters 2020
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