British car and bike parts retailer Halfords has posted lower annual profits after being forced to swallow rising costs linked to the Brexit-hit pound.
The car parts-to-bikes group booked a 6 per cent fall in full-year pre-tax profit to £67.1 million (€76.5 million) in the year to March 30th, while revenue rose 3.7 per cent to £1.13 billion (€1.29 billion).
Halfords outlined £25 million (€28.5 million) in additional costs as a result of the weaker pound against the US dollar.
Sterling’s decline against the US dollar following the referendum has pushed up import prices for retailers.
Halfords has attempted to mitigate the impact through “supplier negotiations, operational efficiencies and pricing”.
But investors were not impressed, with shares tumbling over 14 per cent shortly after market open.
Despite the currency headwinds, like-for-like sales grew 2 per cent, with retail motoring sales were up 1.9 per cent and cycling by 2.9 per cent on a comparable basis.
Exciting future
The results are the first presented by Graham Stapleton, the former Dixons Carphone executive who succeeded Jill McDonald as Halfords CEO in January. Ms McDonald went to Marks & Spencer to lead their clothing business.
Mr Stapleton said: “We are pleased with the full-year 2018 performance in a challenging retail environment, with profits in line with expectations.
“By focusing more on our specialisms and our services, ensuring that we always provide best value to our customers and presenting a more seamless and inspirational omni-channel experience, there is a really exciting future of growth ahead of us.”
The chain said it saw strong demand for bikes including electric models, as well as cycle repairs, with sales by number up despite recent price hikes.
However, the extreme weather in March dented sales volumes.
Separately, Halfords announced the appointment of ex-British Airways boss Keith Williams as chairman, replacing Dennis Millard, who is retiring.
– Reuters
