Halfords Group PLC (LON:HFD) saw its interim profits more than double after it was allowed to trade during the pandemic as an essential retailer.
The group capitalised on high demand for cycling products by sourcing more stock as well as launching new products and brands.
READ: Halfords strong on the bike with ‘staycation’ products performing well even after summer
The motoring business grew market share despite UK traffic slumped by a third and the MOT was deferred, so the company is recruiting more service-oriented roles and further training existing staff on electric vehicle servicing to boost the segment.
By April, Halfords aims to have at least one electric car technician in every garage and electric bike and scooter servicers in all stores.
However, the outlook for the second half can be challenged by further lockdowns as fewer vehicles would be on the road.
Conversely, demand for cycling products is expected to keep up despite the normal seasonal decline in the winter months.
The retailer did not issue guidance for the remainder of the year due to COVID-19 and Brexit uncertainty.
In the 26 weeks to October 2, revenue jumped 7% to £638mln while profit before tax rocketed 101% to £55mln, helped by efficiency programmes, the furlough scheme and business relief rates.
Cycling delivered higher profits thanks to better buying terms, component rationalisation and more effective promotions, with margin forecast to grow by 3% by year-end.
“Our fundamental view is that there are many positive changes afoot at Halfords and strategically the company is in much better shape,” Peel Hunt noted.
“Macro tailwinds will probably persist but they aren’t needed for HFD to progress: we remain highly positive.”
Shares rose 2% to 267.5p on Wednesday morning.