Halfords Autocentres: Up to 600 possible expansion sites

Halfords, which bought Nationwide Autocentres almost 18 months ago, has suggested that there could be scope to increase its expansion plans beyond the ambitious target to double its presence to around 400 sites announced during the purchase. During a recent conference with financial analysts the company spoke of the “analysis of potential catchments – 400 possibly up to 600 sites.”

Initially the firm, which has already rebranded virtually all the branches in the old Nationwide network, said it would open 12 – 18 new centres during the first year. So far the firm has reported achieved this with 16 new centres opened during the last 12 months. Now the target is to open 30 during 2012, while developing the company’s infrastructure to support its growth ambitions.

Currently the company says its model, which is based on actual results of the existing network, is on track with a “strong pipeline of new sites consistent with 30 per annum.” However, with the firm talking of up to 600 sites on the map this kind of growth would take around 13 years at present rates – which has led to speculation from industry sources that growth by larger scale accusation could be on the cards.

The company’s recent success following Halfords Autocentres first national advertising campaign would seem to say that the cash is flowing in the right direction. Subsequent results for the Autocentres business have been described as “encouraging” with an up-lift in like for like (LfL) sales from -2.3 per cent in January/February to +0.9 per cent for the following 10 weeks to 9 May. Weekly online bookings for the Autocentres business have significantly increased, rising 93 per cent year-on-year in the post launch period, against a rise of 21 per cent for January/February.

EBIT guidance for the Autocentres business for full year 2013 remains unchanged at around £7 million (before any charges for amortisation). The company expects to require capital investment of £5 million for “the targeted opening of 30 new centres” which will be “self funded by the Autocentres business.” Openings are anticipated to generate around £1 million of start up losses in full year 2012 results.

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