Bikes brighten Halfords' half yearly financials

Sunny weather boosts business, with cycle repair on the up while cycle sales make up over half of Halfords' online sales
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Halfords' half year financials saw revenue and profits rise, with cycling revenues up 14.2 per cent like-for-like. 

In the 26 weeks ending September 27th 2013 (compared with the 26 weeks ending Sept 28th 2012), cycle Repair was a key focus and saw sales up 27.7 per cent in the half.

Online retail sales – a focus area for Halfords – grew 16.9 per cent. Over half of Halfords' online retail sales were represented by Cycling. 88 per cent of online orders were collected in store during the period.

Total Group Revenue rose 7.7 per cent from £455.6m to £490.6m. Pre-tax profits grew 5.2 per cent to £44.6m and sales were up 7.7 per cent to £490.6m.

The solid results are just the beginning, according to chief exec Matt Davies. 

He said: “These are early days in our three-year transformation plan but it is encouraging to see the Retail business deliver a strong first-half performance. In Cycling we were helped by the better weather but made the most of it by ensuring we had the stock and compelling offers to meet demand."

The following is a (very) long look at the retailer's cycle business, taken from today's financial statement:

"Over the spring and summer, Halfords becomes much more of a Cycling business and the category was the standout performer in the first half, with LFL revenues up 14.2%. Successive wins for British competitors at major sporting events maintained the UK’s significant interest in Cycling; Halfords took advantage of both this and what was undoubtedly better weather.

There were significant enhancements to the range in the period. This included a new Pendleton, launched alongside the great success of the Somersby. A high-specification carbon-fibre Boardman road bike, priced in the period under £1,000, sold well. Apollo, the UK’s largest bike brand, added a road racer at just £200 and a popular new junior road racer within the Carrera Zelos range was priced at under £250.

Promotional events and spot buys augmented the strong performance. Up-weighted clearance activity was matched with spot buys under the Carrera and Raleigh brands and offers included 10% off all road bikes during the Tour de France and Olympic legacy events. Additional investments in stock were notable in Cycling to ensure that continually strong demand was met with good availability in store and online.

A new TV-advertising campaign that reflected a very different approach in our Cycling marketing strategy matched our desire to extend our community responsibilities. Halfords now partners with Re-Cycle, a charity which sends reconditioned bikes to Africa, where bikes are in significant demand. A summer bike trade-in event offered customers a 10% discount on a new bike when they brought in their old bike, collecting c.5,000 used bikes for shipment to our charity’s partners in Africa in the process.

In our desire to support the resurging interest in Cycling amongst children, our store colleagues held kids’ workshops on Cycle Repair, attended by around 10,000 children during the summer holidays.

Cycle Repair was a key focus, with sales up 27.7% in the first half. We helped profile our Cycle-Repair service by proudly partnering with Sky for their series of weekend Sky Rides around the country, providing assistance to thousands of participants. Our team of mechanics also attended other major Cycling events such as the Deloitte Ride Across Britain and many other local events.

In the period total in-store service income included within all of the above categories increased by 19.3% to £10.4m, with the majority of revenues emanating from 3Bs’ fitting and Cycle Repair."

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