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Halfords profit jumps as pandemic spurs British cycling boom

LONDON (Reuters) - British bicycle and car product retailer Halfords HFD.L reported a more than doubling in first-half profit, boosted by a COVID-19-driven cycling boom, but cautioned on its second half outlook due to the impact of lockdowns on motor vehicle traffic.

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Cycling has increased in popularity as many Britons avoid traveling on public transport during the pandemic and increasingly view it as a health and leisure activity.

Halfords’ revenue rose 9.6% to 638.9 million pounds in the six months to Oct. 2, with a 54.4% jump in like-for-like sales of cycling products contrasting with a 23.7% fall in motoring products sales, reflecting less car journeys.

Its garage business, Autocentres, achieved total sales growth of 38.7%.

The group made an underlying pretax profit of 56 million pounds, up from 25.9 million pounds in the same period last year.

As Halfords is deemed an “essential” retailer by the government, its stores can trade through lockdowns.

Shares in Halfords were up 5.3% at 0859 GMT, extending 2020 gains to 64.2% and valuing the business at 547 million pounds.

The group said trading over the first five weeks of its second half was “relatively strong”.

But it noted some impact on sales of motoring products as England’s second national lockdown came into force on Nov. 5.

It said it was not providing profit guidance for the full 2019-20 year, given the impact that national and local lockdowns may have on its performance.

The group said it had “great confidence” in the medium-term opportunity for its motoring products and services business.

It said this was illustrated by a recruitment programme to fill a wide-range of service-oriented roles across stores, Autocentres and Halfords Mobile Expert vans.

Reporting by James Davey; Editing by Kate Holton and Kim Coghill

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