Halfords hit by car centre sales slump

HALFORDS yesterday warned that a dip in sales at its Autocentre servicing shops had forced it to lower its profit forecast.

Halfords estimated a year to 1 April pre-tax profit of between £124m and £127m, with group sales of £869m and gross margins broadly flat.

The estimate was slightly down on the £127.6m pencilled in by analysts.

Sales from stores open at least a year fell by 6.8 per cent in the 13 weeks to 1 April.

Like-for-like sales from Nationwide Autocentres fell by 1.4 per cent. Within this, like-for-like car maintenance sales fell by 11.7 per cent, while car enhancement sales fell by 8.8 per cent. But the retailer, whose traditional bicycle and car parts business was last year supplemented by the purchase of Autocentres, announced a share buyback of up to £75m.

Chief executive David Wild said: “Having to lower a profit forecast is obviously disappointing, The bad weather early in the winter meant that our autocentres were busier than they have been more recently.

“However, the performance overall is flat. We have been encouraged by our cycle sales across premium and other ranges.”

He said that the rate of growth the company had targeted for the Autocentres would be slower, but he was still confident it had been a shrewd acquisition. Thirty new centres will open this year, the company confirmed, while a new advertising campaign will be launched next week.

Kate Calvert, analyst at Seymour Pierce, said: “We remain concerned that management has pruned the cost base back too far in the retail business and will have to put more cost back in to drive sales.”