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Halfords pulls aways fast as it announces special divi

Published: 08:02 19 Jan 2017 GMT

Car service
Revenue in the 15-week period to 13 January was up 11.4% year-on-year

Car parts and bikes seller Halfords Group PLC (LON:HFD) is to pay a special divi of 10p after a strong sales performance over Christmas.

Like-for-like (LFL) sales in the third quarter of the group’s financial year were up 5.9% year-on-year. LFL sales in the first 41 weeks of the financial year were up 3.5%, so the growth rate has accelerated.

On the retail side, LFL sales in the third quarter were up 7.0% (41 weeks: +3.5%), with the Cycling side peddling a bit faster than the Motoring side; the former’s LFL sales were up 7.4% (41 weeks: +5.5%), while the latter’s were up 6.8% (41 weeks: +4.0%).

The Autocentres business saw a 0.6% decline in LFL sales in the third quarter, bringing the year-to-date growth rate down to +0.4%.

As for that special divi, the board said it does not expect to undertake further acquisitions in the near future, leaving it clear to splash out around £20mln on a 10p special divi to be paid to shareholders on the register at the close of business on 27 January.

Having said that, the group did announce an £8mln investment in TyresOnTheDrive.com (TOTD), a UK mobile tyre fitting business.

Halfords will work with TOTD to develop opportunities. The agreement includes projects to deliver certain sales and cost synergies and the opportunity for Halfords to expand its mobile delivery services.

“We continue to make good progress implementing our ‘Moving up a Gear’ strategy, which will enable us to capitalise on the long term growth opportunities in our markets. We benefited from growth in new ranges, our unique ‘wefit’ services and great execution by our colleagues over the busy peak period," said Jill McDonald, chief executive of Halfords.

The group left guidance on full-year profit before tax unchanged.

Net debt as a proportion of underlying earnings (EBITDA) is expected to be around 80% by the end of the financial year.

The group said it has prepared for the effects of sterling’s decline and is confident they can be mitigated over time.

Shares in Halfords rose 7.3% on the announcement.

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