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Halfords Cycles to Profit Growth Amidst Retail Recovery
29 Nov
Summary
- First-half profit increased 1% to £21.2m despite higher operating costs.
- Cycling sales surged 8.8% due to market recovery and warm weather.
- Gross margin improved by 200 basis points, aided by a cost-efficiency program.
Halfords announced a modest increase in its first-half 2025 profit before tax, which rose by 1% to £21.2 million compared to the previous year. This uplift was significantly driven by an 8.8% surge in cycling sales, benefiting from market recovery and favorable summer weather. The company also saw a 3.3% rise in overall group revenue, achieving like-for-like growth of 4.1%.
Improved gross margins of 51.4% played a crucial role in offsetting increased operating expenses, which were impacted by inflation. Halfords' 'Better Buying' cost-efficiency program was a key factor in this margin improvement. The business also reported strong free cash generation of £27.6 million and ended the period with a healthy net cash position of £18.6 million.
Looking ahead, Halfords is advancing its 'Optimise, Evolve, Scale' strategy, focusing on efficiency, technology, and network expansion, including its Fusion garage concept aiming for 150 sites by FY27. The company reaffirmed its full-year profit guidance and capital expenditure plans.
