Halfords (LSE: HFD) is powering along in its turnaround under chief executive Matt Davies. The firm was buoyed this morning by a 19.4% upswing in like-for-like cycle sales, which
Full-year profit before tax arrived at £72.8m, which was slightly ahead of analyst forecasts, and 1.1% up on a year earlier.
Turnaround gathers pace
When Mr Davies joined Halfords 18 months ago this “great British brand”, in his own words, was in desperate need of a shot in the arm. To March 2013 profits had diminished to £71m from £118m two years earlier.
Nine (nine!) profit warnings were issued between 2010 to 2012 as retailers struggled in the aftermath of the financial crisis.
Davies increased investment to £30.4m in the year to March 2014, including an overhaul of 23 stores, a website refresh and equipment upgrades at the firm’s autocentres.
£100m will be invested in the three year period to the end of 2016, with an aim of generating £1bn in annual sales.
Share performance
Halfords shares surged over 10% to 489p in early trade this morning, up 85% since Davies began his tenure in October 2012, and just 3% below the firm’s 52 week high of 499p.
The board is recommending a final dividend of 9.1p taking the full year dividend to 14.3p per share (yield 2.9%). Subject to approval, the final dividend will be paid on 1 August 2014 to all shareholders on the register before the close of business on 4 July.
The board intends to grow dividends broadly in line with earnings per share while maintaining 2x cover.
