Halfords Group PLC (LSE:HFD) shares fell 2.2% to 140.45p, with investors seeming to be unimpressed as the retailer confirmed a solid set of first-half results, reaffirmed full-year guidance and unveiled a refreshed strategy under new chief executive Henry Birch, focused on improving execution and long-term growth.
The company’s first-half results – largely pre-released in an update last month – showed like-for-like sales up 4.1% thanks to robust performances in cycling and garages, with underlying pre-tax profit edging up 1% to £21.2 million.
The updated strategic plan, Birch said, is “not about radical change”, but about building on existing strengths.
It will be delivered in three phases: 'Optimise,' to maximise value from existing operations; 'Evolve,' to invest in structural efficiencies; and 'Scale,' to grow digital retail and garage networks over the longer term.
Birch, who started in April, said the "phasing is reflected in an updated capital allocation framework, which continues to prioritise maintenance of a strong and resilient balance sheet," with the ratio of net debt to adjusted EBITDA excluding leases no greater than 0.8 times.
He said M&A is "not a priority in the near-term" and that Halfords will continue to pay a dividend in line with its cover-based policy of 1.5x to 2.5x underlying profit after tax.
For the current year's outlook, the group said it remains on track to deliver underlying profit in line with consensus and expects capital expenditure to stay within its £60-70 million guidance range.