Halfords confident on profit despite slowdown

LONDON (Reuters) - Halfords (HFD.L), the car maintenance and cycles retailer, on Thursday posted a 3.2 percent increase in first-half profit and forecast full-year profit in line with expectations despite a slow-down in second-half sales.

"Halfords' ongoing product and service developments together with continuing cost management provide the board with confidence in the delivery of full year to end-March 2009 profit before tax, from trading activities, in line with expectations," said Chief Executive David Wild.

Prior to Thursday's statement these stood at about 91.5 million pounds, according to Reuters data, up from 83.5 million pounds, in the previous year.

Halfords also announced plans to accelerate its operations in Central Europe after a successful initial pilot.

For the six months to September 26 the group made a profit before tax of 49.1 million pounds.

This was slightly ahead of analysts forecasts of about 48 million pounds and compares with 47.6 million pounds in the same period last year.

First-half revenue was up 1.6 percent to 407.1 million pounds, but sales on a like-for-like basis, which strips out the impact of new space, were down 1.1 percent.

The fall in underlying sales was offset by an increase in the gross profit margin of 70 basis points to 51.6 percent, reflecting a higher proportion of sales of higher margin car maintenance products and tight cost control.

Car maintenance products, such as wiper blades and light bulbs, are regarded as "needs driven" and as such are relatively resilient to the consumer downturn.