Halfords, the UK’s leading provider of motoring and cycling services, today reported a 3.3 per cent increase in pre-tax profit for the first half of its financial year despite inflation eating into margins.
Over the 26 weeks to 29 September, the company recorded a 13.9 per cent jump in revenue to £873.5m.
However, it also recorded a decline in its gross profit margin, from 49.9 per cent to 47.8 per cent year-on-year thanks to high inflation and management’s decision to keep prices low for shoppers.
The group’s autocentres, which have been a key area of focus for management, saw the strongest growth.
Sales rose 33.9 per cent year-on-year. The rest of the retail business recorded revenue growth of just 3.2 per cent.
Graham Stapleton, chief executive officer, 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.”
He added: “In the face of continuing economic uncertainty, we remain fully focused on optimising every element of the business, and I’m particularly pleased with the very strong performance of autocentres, where we are delivering significantly improved returns.”
The results followed reports Halfords snubbed a £1.4bn merger offer with van hire firm Redde Northgate on the basis that it “undervalued” the motor and cycling group.
It is understood Redde Northgate could launch a fresh bid if “the valuation gap between the two sides closes.”