LONDON (Reuters) - British retailer Halfords Group Plc has posted a sharp rise in cycling sales, helping yearly profit beat expectations and boosting its shares more than 9 percent.
Halfords is benefiting from an upsurge in the popularity of cycling after British successes in the London 2012 Olympics and the Tour de France, while the start of the latter competition in Yorkshire, northern England, in July will make another landmark year for the sport.
The company - among Britain’s biggest seller of bicycles - said like-for-like sales of cycles and cycling gear, ignoring new store openings, rose 41.6 percent in the three months to March 28, giving 19.4 percent growth in the category for the year.
Chief Executive Matt Davies said the group had broadened its model range, particularly for women and young cyclists, and was also selling more clothing and accessories.
“We see this as a really exciting year for cycling and we’re really well positioned,” Davies told reporters on Thursday. “Clearly there’s The Giro d‘Italia, the Tour de France, the Commonwealth Games, and we’ve got some great products.”
The Giro d‘Italia diverted from its usual route around Italy to start in Belfast this month, while the Commonwealth Games in Glasgow from July could involve further successes for British riders.
The Tour de France has been won by British riders Bradley Wiggins and Chris Froome in the past two years.
While mild weather helped Halfords’ cycling sales, it had the opposite result on car maintenance products like batteries and antifreeze, with sales falling 0.5 percent in the final quarter, Davies said.
Full-year adjusted pretax profit rose 1.1 percent to 72.8 million pounds against an average forecast of 70.1 million, on revenue up 7.9 percent to 939.7 million.
Its shares, which have risen by 38 percent in the last 12 months, were trading up 9 percent at 482 pence at 1012 BST, having hit a four-month high of 490.5p.
Analysts at brokerage Investec upgraded their pretax profit forecast for the year to end-March 2015 by about 7 percent to 75.8 million pounds after what they said was an “eye wateringly strong exit to the year from cycling”.
Davies, who joined the group 18 months ago, is implementing a 100 million pound turnaround that includes store revamps, new ranges and staff training.
Chief Financial Officer Andrew Findlay said the plan was delivering results and saw core earnings exceeding the 103.4 million level recorded in 2013 in the current financial year, rather than next.
“We are comfortable to give guidance that’s come forward one year,” he said. “Consensus (of analyst expectations) was already there, but we’re confirming that’s the view we take as well.”($1 = 0.5925 British Pounds)
Editing by Sarah Young and David Holmes