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."
