Halfords' share price drops on £15m sterling hit

 
Helen Cahill
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Halfords has been increasing the number of services it offers (Source: Halfords)

Halfords' share price fell in morning trading after the retailer said it had faced a £15m hit from sterling's devaluation.

The figures

For the 26 weeks to 29 September, Halford's revenue rose 1.5 per cent on a like-for-like basis. Total sales grew 3.8 per cent, up from £567.3m to £588.7m.

In its retail arm, sales were up 1.9 per cent, and sales fell 1.3 per cent in its autocentres.

Underlying profit before tax fell from £40.8m to £36.8m, a drop of 9.8 per cent.

At time of writing, Halfords' share price was down six per cent at 313p.

Read more: Halfords poaches Dixons Carphone executive to replace CEO

Why it's interesting

Halfords said today that the devaluation of sterling will cost the company a total of £25m for the 2018 financial year, and the bulk of the cost (£15m) has fallen in the first half of the year. However, the retailer said today that it had managed to offset a large part of this cost.

Kate Calvert, analyst at Investec, said the devaluation of sterling had overshadowed a good set of results. She said the worst of the effect of currency movements had been tackled, and that the firm was making good strategic progress.

Read more: M&S appoints Halfords' chief to take on embattled clothing arm

What Halfords said

Jonny Mason, chief financial officer and interim chief executive, said: "We have delivered more improvements for our customers in this first half, with new services for motorists and cyclists, provided by trained, friendly, expert colleagues, and new ranges of great products.

"It is pleasing to report positive sales growth for this period, despite the poorer summer weather and the uncertainty in the UK economy."

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