Sales up but profits down at Halfords

Operating profits may have dipped but underlying profit before strategic investments – ie the roll-out of more Bikehuts – was up 7 percent. A total of 57 Halfords stores have now been converted to the Bikehut format with another 22 due for roll-out next month.

Sales were up by 3.2 percent overall with cycle sales increasing by 4.6 percent.

In a press conference this morning David Thompson and Steve Russell, Boots CEO, and David Thompson, his deputy, were asked about their plans for Halfords.

Thompson said: "If anybody came knocking on the door and gave us an offer which we had seriously to consider in the light of our shareholder value credentials then we would have to do so.

But he added: "That has not happened and there’s been plenty of opportunities to do that.

"I suspect it’s because we know more about the cash flow of that business than the market does at the moment. We have a little way to go yet to demonstrate that it really is a great business."

Russell said: "If there were a way of releasing significantly higher levels of shareholder value we’d take it."

But he claimed there is no pressure to dispose of Halfords and he remains comfortable having it in Boots’ portfolio of businesses.