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Halfords Group PLC on Wednesday said increasing costs caused half-year profit to fall, more than offsetting revenue growth.
The Worcestershire-based motor and cycling products retailer said pretax profit fell 54% to £29.3 million in the six months to September 30, from £64.3 million a year prior. Revenue grew 10% to £765.7 million from £694.8 million.
Total operating costs before non-underlying items increased by 21% to £358.7 million from £295.7 million a year ago. Cost of sales increased by 11% to £372.6 million from £335.4 million.
The company declared an unchanged interim dividend of 3 pence per share.
Looking ahead to the current financial year 2023 ending March 31, it cited ‘good visibility’ on costs for the second half, having bought utilities at costs in line with financial year 2022.
However, it expects underlying pretax profit to be at the lower end of the £65 million to £75 million range, falling by up to 28% from £89.8 million in financial year 2022. In the just posted first half of financial year 2023, underlying pretax profit fell by 50% to £29.0 million from £57.9 million.
Chief Executive Officer Graham Stapleton said: ‘Since the period close, we’ve continued to see resilient trading in the more needs-based categories, but there has been a softening in the more discretionary areas. It remains challenging to predict consumer confidence for the remainder of financial year 2023, but we don’t expect the challenges that businesses are facing to dissipate soon.’
Halfords shares were 6.0% lower at 200.80 pence each in London on Wednesday morning.
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