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Halfords strong on the bike with ‘staycation’ products performing well even after summer

Profit before tax for the six months to October is expected to top £55mln

Halfords Group PLC - Halfords strong on the bike with ‘staycation’ products performing well even after summer

Halfords Group PLC (LON:HFD) said trading momentum has continued despite the summer ‘staycation’ trends have been shelved.

Sales in its cycling division increased 46% year-on-year in the five weeks to September 25, while autocentres jumped 18% and the motoring division was up 7%.

READ: Halfords warns winter profits could be lower after strong ‘staycation’ demand

As a result, the retailer of motoring and cycling products expects profit before tax for the six months to October to top £55mln, from the £35-40mln guided previously.

However, the FTSE 250 group remains mindful of a potential second wave of COVID-19, the dwindling down of the furlough scheme and the outcome of Brexit negotiations.

Here to stay

Peel Hunt noted that the improvements seen so far are set to continue, while the cycling tailwind will be supported by government’s efforts to get us on our bikes.

“It is very much worth remembering that these bumper years mean that balance sheets are significantly improved: Halfords will nearly be debt free by year end and that surely means a return to the dividend list will come sooner rather than later,” analysts said.

“The bears suggest that after this bumper profit year, Halfords will return to the uninspiring norm. That misses the point that Halfords is improving as a business.”

Shares climbed 21% to 218.62p on Thursday morning.

Quick facts: Halfords Group PLC

Price: 229.1625 GBX

LSE:HFD
Market: LSE
Market Cap: £456.3 m
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