Halfords accelerates Autocentre investment after strong first-half 2024 results

Halfords Groups reports that its “strong” first-half 2024 financial performance was driven by “substantial revenue and profit growth through increased market share” and “optimisation of our Autocentres business”. And that means we can expect accelerated capital investment in Autocentres moving forward.

Specifically, the results for the 26 weeks to 29 September 2023 show up revenue is up 13.9 per cent compared with the same period a year earlier. Since the Halfords figures cover a period which include the impact of acquisitions, like-for-like sales growth metrics can be used as a way of filtering out such effects as well as branch openings. Nevertheless, like-for-like sales increased 8.3 per cent “despite [a] challenging macro environment”.

Indeed, market share gains in all categories plus growth in “needs-based categories, such as retail motoring and motoring services”, which of course includes the autocentres business, had a particularly positive impact on overall figures.

Meanwhile, continued strong growth of over 37 per cent in B2B, means that sector – which is driven by two tyre-related businesses (commercial fleet services and Avayler) now represents nearly a third of group revenue.

Autocentres delivered strong sales growth and profitability, with total sales up 33.9 per cent and like-for-like sales up 18 per cent. That means Autocentre pre-tax profits (EBIT) in the period amounted to £10.9 million, up +£14.1 million). That improvement was the result of the optimisation and and garage utilisation improvements at “acquired businesses”.

For its part, Avayler – the Halfords garage and tyre retail Software as a (SaaS) business – received a “landmark investment and 15-year commercial contract” from Bridgestone.

Accelerated Autocentre investment

Our B2B businesses and needs-based categories are continuing to show very strong growth. However, trading patterns have been volatile across the first half of the year, and in the last couple of months we have seen some market softening in our discretionary big-ticket categories, which has been reflected in slower LFL sales growth.

Commenting on the news, chief executive officer, Graham Stapleton said: “Despite the challenging and volatile trading environment and slower-than-expected recovery in some of our markets, we have made a good start to the year, with substantial sales and profit growth, and increased market share across the business…

“….I’m particularly pleased with the very strong performance of Autocentres, where we are delivering significantly improved returns. In light of this, we are accelerating capital investment in the garage services operating model and customer experience in 10 towns in the balance of this financial year.” However, details of exactly what this accelerated capital investment means in practice remain to be seen.

(Source: Halfords)