Halfords Group PLC (LSE:HFD) has warned of price rises on the back of a multi-million-pound surge in costs related to last month’s Budget.
Higher employer national insurance and minimum wages are set to add around £23 million to costs from next year, the motor retailer said in interim results on Tuesday.
“The cost implications from the recent UK Budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers,” chief executive Graham Stapleton stated.
“While we will work hard to mitigate these costs, we urge the government to consider alternative ways of supporting businesses like ours.”
Inflation “may” be passed through on the company’s managed services as a result, Halfords warned.
Uncertainty around the Budget had also caused volatile trading in recent months and left doubt over the latter half of the year, the company said.
Revenue dipped by 1% to £864.8 million during the six months to September, or by 0.1% on a like-for-like basis, while reported pre-tax profit fell 23.3% to £17.8 million.
Halfords noted it was “comfortable” with meeting consensus expectations for the year.
“However, the analysis was conducted prior to the recent UK Budget, and it is unclear how macroeconomic indicators including inflation, interest rates and unemployment levels will respond to the changes announced, and hence impact these forecasts,” it said.