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Halfords Group May Still Yield 7%

By Sam Robson - Apr 10, 2013 at 9:01PM

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Halfords Group confirms pre-tax profit in line with expectations.

LONDON -- Shares of Halfords Group (HFD 1.41%) were up 4.40 pence, or 1.4%, at the time of writing this morning following the announcement of its pre-close statement for the 52-week period to March 29, 2013.

The U.K.'s leading retailer of automotive and leisure products and services' total revenue rose 1.7% over the last 11-week period, with its autocentres division continuing its growth as it put in a 7.8% increase, while Retail operations fared well with a 0.5% lift against the same period last year.

Like-for-like (LFL) revenue for the 11-week period saw autocentres increase 0.8%, with retail up 0.3% -- helped only by a 10.4% uplift in its car maintenance operations, as cycling fell 8.8%, travel solutions was down 5.5%, and car enhancement dropped by 4%.

Over the 52-week period, Halfords saw a combined increase of 1% in total revenue, with autocentres' 13.5% lift more than offsetting retail's 0.9% drop-off. It was a similar story for LFL revenue over the period, as autocentres soared 7% but retail was down 0.7% (car maintenance +5.1%, travel solutions -6.8%, car enhancement -4.2%, and cycling -0.6%), which led to a marginal 0.3% increase for the company overall.

As seen with many companies releasing results recently, Halfords was also affected by the cold snap we've had in the U.K., which contributed to the decline in outdoor-focused divisions -- cycling, travel solutions -- but benefited car maintenance, which benefited from the company's strategic wefit focus.

Chief executive Matt Davies commented:

This was a robust performance demonstrating how the balance of our business can offset some variations in the weather... We are focused on significantly improving the service we offer customers and this emphasis will be central to our future investments. I look forward to outlining our plans to secure sustainable revenue growth through our three-pillared strategy at our preliminary results on 23 May.

Management confirmed that pre-tax profit is in line with prior assumptions of around 68 million pounds to 72 million pounds. Halfords remains in a good position financially, then, and well regarded by investors interested in high-yielding companies, offering a consensus yield of around 7%.

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