Halfords Group (HFD) H2 2024 earnings summary

Executive summary

• Revenue grew 7.9% year-over-year to £1,712.8m, with like-for-like growth of 5.0% and market share gains in all four core markets despite challenging macroeconomic headwinds and weak demand for big-ticket discretionary purchases.

• Services now represent over half of group revenue, with strong performance in Autocentres and B2B, and significant growth in commercial fleet services and SMR revenue.

• Over £35m of cost savings delivered, exceeding initial targets, mainly through product cost reduction, organisational restructuring, and property savings.

• Cash management remained strong, with operating cash flow up £13m to £167.4m and net debt (excluding leases) at £8.2m.

• Proposed final dividend of 5p per share, bringing the full-year dividend to 8p, a 20% reduction reflecting lower profits.

Financial highlights

• Group revenue from continuing operations: £1,696.5m (+7.9% year-over-year); total revenue including discontinued: £1,712.8m (+7.6%).

• Group gross margin was 48.2% (down 50bps year-over-year), with strong margin expansion in Autocentres offsetting FX and cycling market headwinds.

• Underlying profit before tax (PBT) was £36.1m, down £8.1m year-over-year, reflecting inflation and market headwinds.

• Net debt (excluding leases) stood at £8.2m; leverage (pre-lease) 0.1x, (post-lease) 1.7x, below targeted range; £180m debt facility extended to April 2028.

• Operating cash flow improved by £13m to £167.4m; CapEx was £46m, split between maintenance and strategic projects.

Outlook and guidance

• FY25 expected to remain challenging with further volume declines in cycling and consumer tyres, and continued cost inflation, especially from wage and freight costs.

• Focus on mitigating headwinds through cost and efficiency savings, targeting over £30m incremental savings.

• Continued investment in platform optimisation, with strategic initiatives like Fusion rollout and Avayler expansion.

• Confident in achieving midterm profit targets of £90–£110m if markets recover as forecast, though recovery is expected to take longer.