Halfords Group (HFD) investor relations material

Executive summary

• Achieved 2.5% like-for-like sales growth and underlying PBT up 6.4% to £38.4m, with gross margin up 250bps to 50.7%, the highest in three years.

• Delivered £35m in cost and efficiency savings, offsetting £33m of inflation, mainly from wage and freight costs.

• Free cash flow rose to £43m, up £14m year-over-year, and net cash improved by £18.2m to £10.1m.

• Dividend increased by 10% to 8.8p, covered 1.5x by profit after tax, reflecting strong financial performance.

• Strategic focus on expanding Fusion Garages, growing Motoring Club membership, and leveraging unique assets.

Financial highlights

• Group gross margin expanded by 250bps to 50.7%, driven by better buying and price optimization.

• Like-for-like sales grew 2.5% year-over-year; retail LfL up 2.1%, cycling returned to growth.

• Auto centers delivered 3.7% like-for-like sales growth and 320bps margin expansion.

• Statutory loss before tax due to non-cash exceptional charges, including a £49.1m impairment.

• Non-underlying items totaled a £68.4m charge, mainly non-cash goodwill impairment.

Outlook and guidance

• Trading in early FY26 is in line with expectations; profit expected to be weighted to H2 due to cost increases and investment timing.

• Over 100 Fusion garages planned by year-end, with at least 60 more sites for FY26; continued focus on premium Motoring Club membership growth.

• Over £20m of cost savings identified to mitigate inflation in FY26.

• Capex planned at £60m to £70m for Fusion, digital, and systems investment.

• Clear plans to mitigate further cost headwinds through pricing and cost control.