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 Highlights:

  • HFD FY25 underlying profit before tax rose 6.4% YoY to GBP 38.4 million, exceeding guidance.
  • The company plans to open 60 new Fusion sites in FY26 toward its 150-garage target by FY27.
  • HFD declared a final dividend of 5.8p, raising total FY25 payout to 8.8p, up 10% YoY.

Halfords Group plc (LSE:HFD) is a UK-based retailer and service provider operating across Retail, Autocentres, Mobile Expert, and Commercial Fleet Services segments, offering motoring and cycling products, vehicle maintenance, van-based services, and fleet solutions.

The company has announced its preliminary results for the 52 weeks to 28 March 2025, reporting a decent financial performance marked by improved profitability, strong cash generation, and continued progress in its strategic transformation toward a motoring-focused business model.

The company reported underlying profit before tax of GBP38.4 million, representing a 6.4% YoY increase and exceeding the previously guided range of GBP 32 million to GBP 37 million. Like-for-like sales rose 2.5% YoY, with the Autocentres division up 3.7% YoY and the Retail division growing 2.1% YoY. Motoring-related products and services now account for around 80% of group sales.

Halfords saw a significant 250 basis point increase in gross margin year-on-year, ending at 50.7% YoY, driven by better buying improved pricing, service mix, and favourable foreign exchange rates. Total cost savings of approximately GBP 35 million were achieved, effectively offsetting GBP 33 million in inflationary pressures, including higher labour costs linked to increases in the national minimum wage.

While the group reported a statutory loss of GBP 30.0 million (compared to a profit of GBP 38.8 million in FY24), this was attributed to a non-cash goodwill impairment linked to updated discount rates following UK gilt yield movements and does not impact operational performance.

Autocentres’ underlying EBIT (excluding Avayler) rose 21.2% YoY to GBP 18.3 million, supported by growth in the service, maintenance, and repair segment, and operational efficiency gains. When including Avayler, underlying EBIT was GBP 15.7 million.

Retail EBIT, on an underlying basis, was GBP 39.0 million, slightly lower than the previous year due to wage inflation and enhanced employee rewards, despite strong margin management. The reported EBIT loss for Retail was GBP 14.9 million, again affected by the impairment charges.

The group continues to develop its Fusion garage model, with 50 locations currently operating. These sites are designed to integrate motoring services and improve operational profitability at the local level. Halfords confirmed plans to open 60 more Fusion sites in FY26, with the remaining to follow in FY27, and a target of reaching 150 Fusion garages. Average capital expenditure per site is expected to be around GBP 200,000.

Free cash flow for the year increased by GBP 13.6 million to GBP 43.0 million, reflecting improved profitability and disciplined working capital management. Inventory was reduced by GBP 12.3 million, and the company ended the year with net cash of GBP 10.1 million (pre-IFRS16), marking an GBP 18.2 million year-on-year improvement.

The Board declared a final dividend of 5.8 pence per share, bringing the total FY25 dividend to 8.8 pence, up 10% YoY from FY24.

Halfords noted that early trading in FY26 is in line with expectations, though it remains cautious on consumer spending trends. The company aims to offset inflationary pressures with further pricing, cost, and efficiency measures. Investment will continue across digital customer experience, the Halfords Motoring Club, and contact centre systems.