Halfords share price soars as retailer’s motoring offering woos cash-strapped Brits
Halfords‘ share price soared over eight per cent this morning as the motoring and cycling giant revealed its sales could top £1.9bn.
The Birmingham headquartered retailer, which has seen its shares slide 30 per cent in the last year, said it expected pre-tax profits to come in at around £90m to £110m, up from £50m to 60m the previous year.
Halfords also outlined its mid to long term growth strategy, saying it was eyeing a greater expansion of its motoring services, including a ‘one one-stop-shop’ for motoring ownership, to make the experience more convenient for consumers.
The retailer, which already offers MOTs through its autocentre offering, said it will look to invest in colleague training to establish a “market leading position” in the servicing of all forms of electric cars, vans, scooters and bikes.
Graham Stapleton, chief executive officer of Halfords: “Since 2018, we have doubled the size of our B2B and services business and have become the UK’s biggest motoring services provider, increasing our group sales by circa 40 per cent.
“From here, we see significant potential for future growth, both in our existing business and in adjacent markets.”
Halfords’ transformation
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Halfords transformation from a retailer into a more services-focused group should provide a more reliable future revenue stream, as drivers subscribe to the group’s Motoring Loyalty Club.
“Things like car servicing or a new battery aren’t negotiable, which is why we’re happy to see about 50 per cent of sales now come from this more robust area. But after relatively weak group performance this financial year, Halfords is needing to rebuild investor confidence.
He added: “The group’s aiming to become a market leader in the servicing of all forms of electric cars, vans and scooters.
“The investment in infrastructure and colleague training for this won’t be cheap, but if it can solidify its position in consumers’ minds early enough in the electric vehicle transition, the investment may just pay off.”