Redditch-based Halfords Group said today that while it is confident that the post-pandemic future of the business remains strong, trading in the near term is likely to be severely impacted. This could mean a sales decline over the year of 25 per cent (£300 million).
In a statement it said: “As the UK’s largest independent provider of motoring and cycling services, we have an essential role to play in keeping the UK moving. Each month, we carry out more than a quarter of a million motoring jobs in our retail stores, over 100,000 jobs in our garages and approximately 12,500 motoring jobs at people’s homes or workplaces using our fleet of mobile vans.
“Many key workers rely on us to keep their motor fleet running, including the Ministry of Defence, the British Transport Police and several large UK utility companies. Alongside this, we carry out over 200,000 bike builds, services and repairs every month and over 40% of the Government backed Cycle2Work scheme in the UK is delivered through our Retail business. Halfords is uniquely positioned to keep the UK’s cars and bikes on the road and safe to drive or ride, providing vital support to emergency workers, fleet operations, key workers and the general population as they travel for essential supplies and, where required, attend places of work.”
The company has been designated by the Government as a provider of essential services and is able to remain open across the entire business.
The company said: “As it currently stands, our Autocentres garages and mobile vans are open and, within retail, we are working through a plan to provide partial store coverage from later this week. We will continue to take orders online on both Halfords.com and Tredz.co.uk, offering either a home delivery service or Click and Collect once branches are reopened.”
Recent trading at Halfords had been very strong in the last couple of weeks, but delivery of the FY20 profit outturn is dependent on sales performance in the final two weeks of the financial year, but the company is now seeking to strike a balance between providing essential motoring and cycling services to the UK public alongside guaranteeing the personal safety of its customers and staff.
“Given the latest Government guidance we believe there is a high likelihood that sales will drop sharply and, if so, that the shortfall will have an impact on profitability,” the company said. This could mean over a sales decline over the year of 25 per cent (£300 million).
Graham Stapleton, Halford’s CEO said: “In such difficult times the health and safety of our colleagues and customers remains our top priority and we continue to take all appropriate action in line with government advice. Halfords has an essential role to play in keeping the country moving, providing vital support to emergency workers, fleet operations, key workers and the general population as they travel for essential supplies and, where required, attend places of work.
“While significant uncertainty exists on the impact of COVID-19, we are taking immediate and significant measures to contain our costs and protect our financial position. We have a strong balance sheet, with significant liquidity headroom and low levels of financial debt.
“This is an unprecedented challenge for all of us, but I am confident that the actions we are taking to successfully navigate the current situation will put the business in a position of strength, enabling us, over the medium term, to refocus on our strategic transformation.
“Finally, I would like to thank all our fantastic colleagues and customers for their incredible support during this challenging period.”