Halfords' Post-Olympics Cycling Interest Helps Sales, But Profits Are Down

On Your Bike! Halfords Receives Boost From 'Wiggins Effect'

Car parts and bicycle retailer Halfords has suffered a sales slump of 1.9% despite expectations that a "summer of sport" would boost revenue.

Half-year profits slumped by 23% to £41.9 million, down from £54.7m a year earlier. Retail for the half year totalled £393m

But Halfords claimed the figures would have been worse without the so-called "Wiggins effect", which helped improve trade after a miserable first quarter, when like-for-like sales plunged 7.5%.

Taking the second quarter of trading alone, retail sales rose 4.6% thanks to a surge in cycling and repairs, inspired by the British success not only at the Olympics, but also with the Tour de France.

Chairman of Halfords Dennis Millard said while the group was cautious about pressures on consumers in the run up to Christmas, it remained "on track" to make a pre-tax profit of up to £70m this year.

City analysts reacted positively to the news this morning, with Investec Securities telling its investors: "There has been good progress on its strategy, and key performance indicators are all moving in the right direction.

"With the key winter and Christmas trading periods ahead...we make no changes to our headline forecasts. Our target price nudges up to 360p and we reiterate Buy."

Huffington Post UK reported in August that Halfords was expected to do well out of the Olympics.

Demand for cycle clothing also increased as people return to the roads following the dismal start to the summer. And Victoria Pendleton's range of bikes sold 70% more in the past month, compared with June.

The sales boost will be welcome news for Halfords new chief executive Matt Davies, the former chief exec at Pets At Home who was parachuted in after David Wild's abrupt departure in the summer.

Davies took over the job in early October, and immediately received support from many of the city's analysts as a strong leader.

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