Halfords profit up 24% in half year

Halfords said that it would be increasing its interim dividend by 20 per cent to 6.00 pence per share.

During the half year Halfords managed to reduce its net debt to £106 million, down from £174 million at the same time the previous year. Debt reduction was helped by operating cash flow of £112.3 million.

The effect of people taking “staycations” instead of foreign holidays as the recession took its toll gave the company an excellent performance in its Leisure business, which saw market share growth and a “record camping season”.

In car maintenance Halfords saw growth thanks to an extra 180,000 “wefit” transactions.

The company’s multi-channel sales increased by more than half to reach more than 5.2 per cent of Halford’s sales.

A cost-cutting programme allowed Halfords to save £4 million, helping to offset underlying cost inflation.

Halfords said that it had managed to open seven new stores in the period.

David Wild, Chief Executive of Halfords, said, “We are very pleased with these results that clearly demonstrate the success of our four-point strategic growth plan. This strong first half profit, cash flow performance and our well-structured balance sheet, lay the foundation for the on-going development of our business.

“Our market-leading core product areas, like car maintenance, performed well in the second quarter increasing market share and our leisure categories, of cycling and camping products exceeded our expectations. These strong sales compensated for the economic headwinds experienced in our international markets and for the decline in the Satellite Navigation sector.

“While we remain cautious on the consumer outlook for 2010, our continued confidence in ongoing earnings growth has led the board to increase the interim dividend by 20% to 6p.”