Halfords Q1 2012/13 IMS - interim dividend unchanged

Halfords Group plc First-Quarter FY13 Interim Management Statement

Halfords Group plc, the UK's leading retailer of automotive and leisure products and services and leading independent operator in garage servicing and auto repair, today updates the market on its trading performance for the 13-week period to 29 June 2012:

Key Points for the Quarter

Retail

• A weak start to the quarter with revenue LfL of -12.4% for the first 8 weeks followed by an improvement in the following 5 weeks (LfL: +0.9%)
• A solid performance in Car Maintenance with 3Bs fitting penetration at 27.0% (Q1 FY12: 22.4%) contributing to a 26.9% growth in Retail service revenues
• Car Enhancement remains in decline but an encouraging positive LfL performance in Car Audio
• Cycling and other Leisure revenues materially impacted by the unseasonal weather conditions with Cycling revenues down 9.6% 
• Good progress in online revenues (+13.0%) with the new fulfilment proposition enhancing the multi-channel offer
• Q1 gross margins and costs in line with our expectations 

Autocentres

• Pleasing performance with further strong growth in revenue and market share
• Tyre fitting now represents in excess of 10% of Autocentre revenues

Group

• Further progress in delivering the long-term strategy; encouraging feedback from the 3 "laboratory" stores
• Group remains cash generative with a strong balance sheet
• The Board intends to declare at the time of the half-year results an unchanged interim dividend of 8p per share, payable in January 2013
• David Wild steps down as Group CEO. Dennis Millard becomes interim Executive Chairman. Search underway for replacement CEO

 Guidance for the Full Year

Whilst still early in the year, given the uncertain trading environment our planning assumptions now reflect continuing negative Retail LfLs in the remainder of the first half, with second-half Retail LfLs likely to be flat to mid-single-digit negative. Previous guidance on Retail margins and costs and on Autocentres' profit growth is broadly unchanged. Under these scenarios, FY13 Group Profit Before Tax for the year would range between £62m and £70m and healthy underlying cash flows would continue to be generated whilst making progress implementing our strategic priorities.

Dennis Millard, interim Executive Chairman, commented:

"The consumer environment remains difficult and the unseasonal weather conditions this quarter had a direct impact on sales of cycles and outdoor leisure products. In this challenging economic environment the management team will be focused on maximising our trading performance and cash generation, prudent cost management and delivering the longer term strategy outlined to shareholders in May 2012."