Halfords Sales Reach £831.6 million Supported by Nationwide Acquisition

Halfords Group Plc has reported preliminary full year 2010 results (April to April) showing sales of £831.6 million, up 4.6 per cent on 2009 and up 0.7 per cent like-for-like. The company’s gross margin grew to 54.4 per cent, while operating profit shot up 17.5 per cent to £119.7 million, representing 14.4 per cent of sales (2009: 12.8%).

The acquisition and “successful integration of Nationwide Autocentres” – four of the network’s branches are already said to have converted their livery – were clearly important parts of the company’s strong results. David Wild, Chief Executive, commented: “Halfords has had an excellent year…Sales growth in core areas, margin expansion and disciplined cost control has led to the delivery of 25 per cent earnings growth…In addition we made our first acquisition, Nationwide Autocentres, which represents a natural extension of Halfords service proposition in the car aftermarket and is already making a good contribution to the Group.”

So far executives report that sales from the autocentre business are “in line with expectations”. Now managers are looking into ways they can cross market and capitalise on the strength of the company’s Halfords.com website, which saw its traffic increase 40 per cent in the last year to 30 million. Now that four Nationwide Autocentres branches have been rebranded with the Halfords moniker, the rollout across the rest is scheduled to be completed by the end of 2011.

Looking ahead the company plans to “double earnings from the Autocentre operations over the next three years” and harness its strong cash flow to seek further acquisitions that meet our investment criteria. And this means that 12 – 18 new sites have been identified for the company’s ambitious target of doubling the number of dots it controls on the map.