Halfords Group (HFD) H1 2025 earnings summary

Executive summary

• Delivered broadly flat underlying profit before tax (PBT) of £21.0m year-over-year, despite significant inflationary pressures and weak consumer demand, supported by £15m in cost savings and strong margin optimization.

• Gross margin improved by 160bps to 49.4% through pricing optimization and cost-saving initiatives.

• Maintained a strong balance sheet, ending the period in a net cash position of £1.3m, and declared a 3.0p per share interim dividend.

• Strategic investments in Fusion Motoring Services and the Motoring Club are delivering ahead of plan, with Fusion rollout accelerated to 40 sites and Motoring Club membership surpassing 4 million.

• Free cash flow was £28.1m, a £47.3m improvement year-over-year, supported by stock reduction.

Financial highlights

• Group revenue declined 1.0% year-over-year to £864.8m; like-for-like sales were flat.

• Underlying EBIT was £26.4m, down 4.3% year-over-year; underlying EBITDA was £89.4m, down 1.7%.

• Underlying basic EPS was 7.6p, unchanged year-over-year; interim dividend maintained at 3.0p per share.

• Net cash (excluding leases) improved to £1.3m from net debt of £47.0m in H1 FY24.

• Cost savings of £14.6m–£15m delivered in H1, on track for £30m full-year target.

Outlook and guidance

• FY25 profit expected to be strongly weighted to H1; consensus expectations reaffirmed.

• H2 faces uncertainty from continued wage inflation, incremental freight costs, and temporary garage closures for Fusion rollout.

• FY26 faces c.£23m in direct labour cost increases from UK Budget measures, with mitigations under review.

• Greater ability to mitigate headwinds in Autocentres due to pricing power; further mitigation options under review.