Halfords in profit thanks to cycling boom

Cyclist Victoria Pendleton has helped rekindle Britain's love affair with the bike

The chain saw cycle sales race 14.2 per cent ahead in the six months to September 28 after launching ranges endorsed by cycling celebrities Victoria Pendleton and Chris Boardman.

It said the cycling business was the “standout performer” in the first half, helping drive a 6.4 per cent hike in underlying pre-tax profits to £44.6m – its first profits growth for two and a half years.

Shares leapt more than 9 per cent higher as the performance came in better than expected, marking a sharp turnaround on the 23 per cent profits plunge seen a year earlier and 22 per cent dive seen in its recent full-year results.

Chief executive Matt Davies said the results were encouraging, but added it was still “early days” in the group’s recovery plan.

The former Pets at Home boss, appointed last year, has pledged to refresh tired-looking stores and improve customer service over the next three years as part of an overhaul to return earnings to their former glory.

Halfords said measures under the turnaround, such as better stock availability, stronger product ranges and a marketing push also contributed to the 7.7 per cent leap in half-year like-for-like retail sales.

The group followed an impressive first quarter, when retail sales surged 8.8 per cent higher, with further growth of 6.6 per cent in the latest three months despite tough comparisons amid the Olympics a year earlier.

But its autocentres arm continued to struggle, with sales down 2.1 per cent in the first half after worsening trading in the second quarter, when sales slipped 3.4 per cent.

Halfords is searching for a new boss to lead the autocentres business, which offers car servicing and repairs and operates from around 300 sites.

It aims to improve customer service and will open new centres to turn around the division’s performance.

Halfords, which employs around 12,000 staff, also plans to ramp up its wider retail store refurbishment programme, with aims to refresh more than 25 stores by the end of March, up from original plans for between 10 to 15 shops.

It also plans to upgrade every cycling department in the next three years.