While group revenues were up one per cent for Halfords in its preliminary yearly results (up to March 29th 2013), profits dropped significantly - down 24.5 per cent after tax.
2012's 'summer of sport' boosted cycle sales, according to the retailer. However the prolonged winter weather managed to negate the positive impact and cycle sales were largely flat, dipping slightly by 0.6 per cent like-for-like for the year.
Cycling P&A sales rose by over a quarter in the final quarter as the retailer gears up to its 'enhanced PACs (Parts, accessories and clothing) proposition in the new financial year'.
Split between online and bricks and mortar, online revenue grew 15 per cent (over the whole business), representing 10.3 per cent of retail sales.
The retailer's statement reads: "After a disappointing start to the year, it was a particularly strong summer for Cycling sales. The enthusiasm surrounding British successes in the Tour de France, Olympics & Paralympics helped fuel a stronger demand for cycles, cycle products and cycle accessories and we capitalised on this with our agile trading stance.
"The strong demand for premium cycles continued throughout the year, particularly our exclusive Boardman and Pendleton ranges. We were pleased to add to our ranges with the introduction of Pinarello cycles, the brand ridden by Team Sky and used by Sir Bradley Wiggins to win the Tour de France.
"During the second half overall cycle sales were affected by a poorer Christmas for kids and mainstream bikes, which continued into the final quarter as the prolonged winter weather delayed the start of the family cycling season.
"Cycling LfL sales were down 0.6% for the year. Online Cycling Parts, Accessory and Clothing (“PACs”) sales were up 26.5% in the final quarter as we began to introduce new ranges ready for a full-scale launch of our enhanced PACs proposition in the new financial year."
Selling over 1 million bicycles a year, Halfords said it sees good opportunities for growth in the cycle market. Citing the cycle market size as £700m, the retailer said it had around 20 to 25 per cent market share. The firm said the 'PAC' market was of a similar size but that it had a 15 per cent share in this market.
Halfords went on to say that the entire cycling market grew by 8.5 per cent last year and over the next five years is anticipated will grow by around 23 per cent. The cycle repair market, worth circa £100m, Halfords said it believes it has only a eight per cent share. By focusing on that area in the last 12 months it saw sales growth of 25.3 per cent and is implementing a strategy for further growth in this category in FY14.