Car maintenance drives growth for Halfords

Nationwide Autocentres is performing well for Halfords one month after its acquisition.

It has delivered like-for-like sales growth of 5% in the four weeks since the buyout was completed on February 18, 2010.

Rebranding the 224-strong chain of service and repair centres as Halfords Autocentres will begin in the coming financial year.

RETAIL STRONG

In the UK retail market, Halfords also reported positive trading for the 11 weeks to March 19, 2010. It posted increased revenues of 1.3% with like-for-like sales 0.8% higher than the previous year.

But it was margin-enriching car maintenance products and services that led revenue performance, delivering like-for-like growth of 13%.

This reflects the effect of the prolonged winter weather together with a record quarter of fitting participation of bulbs, blades and batteries, the company said in a statement.

The news was not so good in the leisure category, which traded below expectations. Cycle revenues in particular delivered disappointing performance with revenues only increasing by 1.9% on a like-for-like basis.

SAT NAV CHALLENGES

The company also said that the satellite navigation market remains challenging with revenues continuing to decline sharply year on year.

David Wild, Halfords CEO, said the results point to a strong year of trading for the group with full year earnings now expected to grow by 25%.

“The acquisition of Nationwide Autocentres, completed during the quarter, logically extends our successful service proposition and provides a further opportunity for future growth,” he said.

“The financial year has been a positive one for Halfords and with both of our divisions continuing to trade strongly in the fourth quarter, we expect that full year Group earnings before exceptional items will be ahead of market expectations.

“Looking forward, while the consumer environment remains challenging, we are confident that our leading positions, combined with further cost saving initiatives, will enable us to deliver another good result in FY11.”

COST SAVINGS

Halfords plans to make cost savings of around £6m by changing its distribution centre infrastructure and “realigning” store labour.

The group’s performance in Central Europe has not mirrored UK activity, with the operation posting an operating loss of £2.8m. Halfords will close its seven stores in the Czech Republic and Poland this summer.