Halfords cuts 2013 final dividend by 35%

DividendMax Ltd.

Halfords cuts 2013 final dividend by 35%

Key Points For The Year

Group revenues up 1.0%

Successful implementation of areas of strategic focus, particularly Car Maintenance and Online fulfilment

Broadly-flat Retail gross margin and a decline in the Autocentres gross margin reflecting tyre mix

Retail operating costs up 5.3% with investment in colleagues and strategic initiatives

Decline in profit before tax and non-recurring items of 21.9%, in line with expectations

23 new Autocentres opened as investment for long-term growth continues

Free cashflow of £71.8m and net debt down 20.5%

Final dividend of 9.1 pence proposed

Getting Into Gear 2016

Existing three-pillared strategic framework robust, recognising the many strengths of Halfords

Autocentres strategy remains unchanged; growth of 20-30 new centres per year to continue

Re-positioning of Retail business: focus on sales growth to support ongoing sustainable profitability

The three-year Retail plan contains the following five elements:

- Service Revolution: a step change in customer service

- The H Factor: reasserting Halfords authoritative category propositions

- Stores Fit To Shop: upgrading the Halfords store estate 

- 21st Century Infrastructure: developing necessary IT and supply-chain capabilities

- Click With The Digital Future: creating a service-led digital proposition

The plan includes c.£100m of Retail capital investment over three years, underpinned by a significant increase in both operating costs and stock

Group sales target of £1bn in FY16

Matt Davies, Chief Executive, commented:

"Halfords Retail sales performance in FY13 reflected a demanding trading environment and demonstrated how we can exploit our offer with investment and by focusing on areas of opportunity. The Autocentres performance was satisfactory against a backdrop of a declining market and particular challenges in the fleet sector. The fall in Group profitability however illustrates the pressing need for sustainable revenue growth to offset ongoing cost inflation.

Today I am announcing our 'Getting Into Gear 2016' plan, designed to significantly improve our Retail customer experience and bring about sustainable and profitable sales-growth momentum. This programme will focus on supporting our colleagues to deliver consistent friendly expertise backed by major improvements in store environments, plus building on the authority of our offer, infrastructure and digital capabilities. We expect these vital investments will inevitably reduce short-term Retail profitability but will deliver long-term revenue and profit growth together with sustainable shareholder value."

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