TIDMHFD
RNS Number : 5469U
Halfords Group PLC
19 January 2017
19 January 2017
Halfords Group plc
Strong sales growth, investment in TyresOnTheDrive.com, special
dividend
Halfords Group plc ("the Group"), the UK's leading retailer of
motoring, cycling and leisure products and services and a leading
independent operator in vehicle servicing, maintenance and repairs,
today updates the market on its trading performance for the 15-week
period to 13 January 2017, an investment in TyresOnTheDrive.com and
a special dividend.
Q3 Year-to-date
(15 weeks) (41 weeks)
% change % change
------------------------------------------------ ------------- ---------------------------
TOTAL REVENUE
------------------------------------------------ ------------- ---------------------------
Halfords Group +11.4% +8.1%
------------------------------------------------ ------------- ---------------------------
Retail +13.1% +9.0%
------------------------------------------------ ------------- ---------------------------
Autocentres +1.1% +2.7%
------------------------------------------------ ------------- ---------------------------
LIKE-for-LIKE (LFL) REVENUE
------------------------------------------------ ------------- ---------------------------
Halfords Group +5.9% +3.5%
------------------------------------------------ ------------- ---------------------------
Retail +7.0% +4.0%
------------------------------------------------ ------------- ---------------------------
Motoring +6.8% +3.2%
------------------------------------------------ ------------- ---------------------------
Car Maintenance +8.4% +4.6%
------------------------------------------------ ------------- ---------------------------
Car Enhancement +0.6% -2.0%
------------------------------------------------ ------------- ---------------------------
Travel Solutions +15.4% +9.1%
------------------------------------------------ ------------- ---------------------------
Cycling +7.4% +5.5%
------------------------------------------------ ------------- ---------------------------
Autocentres -0.6% +0.4%
------------------------------------------------ ------------- ---------------------------
Key points
-- Group revenue +11.4%, with Retail LFL +7.0% and Autocentres LFL -0.6%
- Growth in all Retail categories as we continue to execute our
"Moving up a Gear" strategy
- Strong LFL service-related sales growth of +13.7% and Group
online sales LFL of +16.3%
- Promotional activity as planned and similar year-on-year,
gross margin in line with expectations
- In Motoring, continued growth in fitting services alongside
strong performances in batteries, dashcams and child seats
- In Cycling, sales growth in both bikes and PACs(4) helped by
new ranges. Cycle Republic and Tredz continued to grow strongly
- In Autocentres, we continued to enhance our customer
proposition through extended opening hours and new technician pay
grading, reflected by improving customer metrics
- Further strategic progress with the first "Store of the
Future" concept store opened in Derby, continued improvements in
customer data and the Dayforce IT project roll-out, to improve the
efficiency of shop colleagues
-- Operating agreement signed with TyresOnTheDrive.com alongside a minority investment
-- Special dividend of 10 pence per share to be paid in February 2017
Financial outlook and guidance
There is no change to our expectation of Group Profit Before Tax
for the current financial year, which is in line with market
consensus. We anticipate that, following the investment in
TyresOnTheDrive.com ("TOTD") and the special dividend announced
today, net debt to EBITDA will be circa 0.8 times at the end of
this financial year. We have developed detailed plans in response
to the increase in costs from adverse FX movement and we are
confident that we will be able to fully mitigate the impact over
time.
Investment in TyresOnTheDrive.com
Halfords today announces that it has entered into an operating
agreement with TOTD, a UK mobile tyre fitting business, to develop
opportunities together to leverage each others' capability and
expertise. The agreement includes projects to deliver certain sales
and cost synergies and the opportunity for Halfords to trial a
broader mobile delivery proposition for its motoring services. In
parallel with the agreement, Halfords has acquired a minority stake
in TOTD for up to GBP8m.
Capital structure and special dividend
Having expanded the Group's capabilities in both motoring and
cycling in recent months, through the Tredz, Wheelies and TOTD
investments, the Board does not expect to undertake further
acquisitions in the near future. Accordingly the Board has approved
a special dividend of 10 pence per share, totalling approximately
GBP20m, as part of our progress towards our previously stated net
debt target of 1 times EBITDA. This special dividend will be paid
on 17 February 2017 to shareholders on the register at the close of
business on 27 January 2017.
Jill McDonald, Chief Executive, commented:
"I am very pleased with the strong sales performance across our
business in the important third quarter of the year. 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."
Enquiries
Halfords +44 (0) 1527 513 113
Jonny Mason, Chief Financial Officer
Adam Phillips, Corporate Finance & IR Director
Teneo Blue Rubicon +44 (0) 207 260 2700
Ben Foster, Haya Herbert-Burns, Shona Buchanan
Notes
1. This announcement contains inside information.
2. Like-for-like sales represent revenues, including those
attributable to Click & Collect, from UK and Irish stores and
UK autocentres trading for greater than 365 days, plus online
revenues from direct deliveries. Where appropriate, revenues
denominated in foreign currencies have been translated at constant
rates of exchange.
3. The Motoring category of sales comprises the aggregate of Car
Maintenance, Car Enhancement and Travel Solutions.
4. "PACs" refers to Parts, Accessories and Clothing, for Cycling.
Conference Call
There will be a conference call for investors and sell-side
analysts at 9:00am today. For details of the call please contact
Teneo Blue Rubicon.
Reporting Calendar
We will report our annual results for the 52 weeks ending 1
April 2017 on 25 May 2017. Thereafter we will next report on the 20
weeks ending 18 August 2017 on 5 September 2017.
About Halfords Group
Halfords is the UK's leading retailer of motoring, cycling and
leisure products and, through Halfords Autocentres, is also one of
the UK's leading independent operators in vehicle servicing,
maintenance and repairs. Customers shop at 460 Halfords stores and
13 Cycle Republic shops in the UK and Republic of Ireland and at
halfords.com for pick-up at their local store or direct home
delivery. Halfords Autocentres operates from 313 sites nationally
and offers motorists high-quality MOTs, repairs and car servicing
at affordable prices. Customers can also shop at three Tredz stores
and a Giant store in South Wales as well as online at tredz.co.uk
and wheelies.co.uk for cycling products and direct home
delivery.
Halfords employs approximately 11,000 colleagues and sells
around 9,000 product lines in store, increasing to around 165,000
Retail products online. The Retail offering encompasses significant
ranges in car parts, cycling products, in-car technology, child
seats, roof boxes and camping equipment. Halfords' own cycling
brands include Apollo, Carrera, Boardman, Pendleton, Wiggins and
Trott cycles, augmented by a range of other brands of cycles and
accessories, including Kona, Mongoose, Raleigh and Pinarello and,
through Tredz, a wide range of premium brands including Giant,
Specialized, and Cannondale. In Motoring, the Halfords Essentials
and Halfords Advanced ranges are sold alongside brands such as
General Electric, Bosch, Garmin, TomTom, Karcher, Thule and
Autoglym. Halfords offers customers expert advice and a fitting
service called 'wefit' for car parts, child seats, satellite
navigation and in-car entertainment systems, and a 'werepair'
service for cycles.
www.halfords.com www.cyclerepublic.com www.tredz.co.uk
www.halfordsautocentres.com www.boardmanbikes.com www.wheelies.co.uk
www.halfordscompany.com
About TyresOnTheDrive.com
Established in 2011, TOTD is a fast-growing operator that fits
customers' tyres at homes or at work, reaching 85% of the UK
population. It achieves first class customer service through its
convenient and professional proposition, based upon an online
platform developed in house by an experienced management team.
Since its inception TOTD has achieved compound average sales growth
of 92%. Halfords will account for TOTD as a sub-20% minority
investment. For more details on TOTD and its services visit
www.tyresonthedrive.com.
Cautionary Statement
This report is based on information from unaudited management
accounts and contains certain forward-looking statements with
respect to the financial condition, results of operations, and
businesses of Halfords Group plc. These statements and forecasts
involve risk, uncertainty and assumptions because they relate to
events and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied
by these forward-looking statements. These forward-looking
statements are made only as at the date of this announcement.
Nothing in this announcement should be construed as a profit
forecast. Except as required by law, Halfords Group plc has no
obligation to update the forward-looking statements or to correct
any inaccuracies therein.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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