First-half profit at Halfords doubled after a surge in bicycle purchases offset a softer market for motoring accessories, but the retailer opted not to declare a dividend for the period.
The group, whose shares were among the weakest performers among general retailers in 2019, has turned out to be one of the corporate winners from the Covid-19 pandemic.
Group sales in the 26 weeks to October 2 rose 9.6 per cent to £638m, with pre-tax profit doubling to £55m from £27.5m in the same period a year ago. The company’s first half included almost all of the UK’s first national lockdown but not the current four-week shutdown in England.
Cycling-related sales at Halfords’ 440 stores were up 54 per cent in the period as, helped by a government incentive scheme, British consumers turned to bikes as a way of avoiding public transport during the pandemic.
The company said trading for the first five weeks of the second half continued to be “relatively strong” and it expected “good growth” in cycling sales.
Motoring has been more difficult. During the first lockdown, car traffic fell to as low as a fifth of normal levels and the government allowed a grace period on the roadworthiness test that UK vehicles older than three years must take each year.
As a result, retail motoring sales fell 23 per cent although revenue in the service-led Autocentre business grew 38 per cent. There was strong demand for its mobile service, which dispatches mechanics in a fleet of 105 vans to fix cars at customers’ homes.
Electric mobility was a big factor across both sectors, with sales of e-bikes rising 184 per cent and the number of hybrid car services performed up 78 per cent.
Halfords will train another 100 technicians in electric vehicle servicing and repair. It said the UK needed to double the number of technicians it trained each year in order to service and repair the estimated 11m electric vehicles that would be on the roads by 2030, after the government indicated it would ban sales of new petrol and diesel cars by that date.
The company did not make forecasts for the full year, saying it remained “cautious” about the impact of the current lockdown in England and the uncertainty over the UK’s Brexit transition period.
“Unlike the previous lockdown, we have been able to plan and mitigate against some of this risk early,” it said.