ref="http://www.cityam.com/company/halfords">HALFORDS yesterday warned that profits would be held back over the next two years as the bicycle-to-car parts retailer unveiled a three-year turnaround plan to reach £1bn sales by 2016.
Shares in the FTSE 250 firm plummeted 15 per cent yesterday after it revealed that, to help fund its £100m investment plan, it will slash the final dividend per share by 35 per cent to 9.1p.
New chief executive Matt Davis said the company would be meeting with investors in the next few weeks and expected “mixed feedback”.
But the former Pets At Home boss insisted that the new strategy would deliver “long-term revenue and profit growth together with sustainable shareholder value”.
Outlining the plan, called Getting into Gear 2016, Davis said around £50m will be spent on revamping 150 stores with larger cycle areas selling clothing and accessories.
The group will also invest in staff training, improving customer service and also launching a new website by the end of the year.
Davies has set a target of lifting annual sales to £1bn by 2016 from £871m in the past year.
Halford posted a profit before tax of £72m for the year to 29 March, down 21.9 per cent from £92.2m a year ago but at the top end of the company’s guidance. Revenue rose by one per cent to £871.3m, helped by a strong performance across its Autocentres division.