Halfords reports flat sales and pressures from rising costs in its 2024 first-half results, prompting a call for apprenticeship levy reform.
- The company saw a slight 1.0% drop in group revenue, totalling £864.8m, compared to the prior year.
- While Autocentres experienced a small increase in like-for-like sales, the retail division faced declines, notably in the cycling sector.
- Halfords’ strategic focus is on expanding Fusion Motoring Services to integrate retail and Autocentre offerings.
- The recent UK Budget introduces significant additional costs, impacting Halfords’ financial forecasts and prompting strategic adjustments.
In its first-half results for 2024, Halfords revealed a challenging financial landscape. The company’s group revenue reported a decline of 1.0%, with figures reaching £864.8m. This period saw a marginal decrease in like-for-like sales by 0.1%, as the motoring and cycling retailer contended with economic pressures and a fluctuating market environment.
One notable area of stability for Halfords has been its Autocentres division, which generated a modest increase in like-for-like sales of 0.8%. As Autocentres comprise approximately 40% of the company’s sales, their performance provided some balance against the broader decline experienced within the retail segment. The retail arm of Halfords, however, reported a 0.7% fall in like-for-like sales, a consequence attributed largely to a weakened cycling market post-pandemic, remaining significantly below levels seen prior to Covid-19 disruptions.
As part of its strategic response to the current trading conditions, Halfords is prioritising the acceleration of its Fusion Motoring Services initiative. This aims to create an integrated operational framework between its retail stores and Autocentre facilities. Currently operational in 22 locations, the programme plans to expand into 40 sites by the end of the following fiscal year, enabling a more cohesive service offering to customers.
The company also expressed concerns over the potential impacts of the recent UK Budget, which unexpectedly introduced an additional £23 million in direct labour costs. This development has led Graham Stapleton, the CEO, to advocate for government consideration towards an expedited reform of the Apprenticeship Levy. He stated: “The cost implications from the recent UK Budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face.”
Despite these financial headwinds, Halfords remains optimistic about meeting its full-year targets, although acknowledging the potential for short-term financial impacts, such as temporary service disruptions for strategic developments. Stapleton conveyed optimism about the progress made thus far, especially under the Fusion initiative, noting a significant positive impact on sales and profits.
Moving forward, Halfords intends to leverage its established omnichannel platform to weather the economic challenges and continue advancing its commercial objectives.
Halfords navigates a challenging financial environment, emphasising strategic innovations and policy reforms for sustained growth.