Halfords Group 20-week Trading Update

[idpickering]

Key points

· Solid performance despite challenging retail environment. Group LFL +2.8%, Retail LFL +2.6% and Autocentres LFL +4.0%, in line with our expectations

· Retail Motoring sales +3.8% LFL, driven by growth in fitting services, car cleaning products, tools, and staycation-related products

· Retail Cycling sales +0.8% LFL, with a good peak summer period offsetting the impact of poor weather at the start of the year and an early Easter. Electric bikes were the standout performer and PACs sales continued to grow

· Autocentres performed well with sales +4.0% LFL and continued momentum on the operational improvements; on track to deliver profit growth for the year

· Group online sales of +11.3% with 85% of Halfords.com orders collected in store

https://www.investegate.co.uk/halfords- ... 00046343Z/

[OLTB]

Thanks Ian - this has been one I've been looking at - and I think monabri has mentioned before about the ratio of on-line sales to physical store pick-up where staff have the opportunity to cross-sell. I also like their auto centre garages - there are several near me and they always seem to be full.

Cheers, OLTB.

[idpickering]

Thanks Ian - this has been one I've been looking at - and I think monabri has mentioned before about the ratio of on-line sales to physical store pick-up where staff have the opportunity to cross-sell. I also like their auto centre garages - there are several near me and they always seem to be full.

Cheers, OLTB.

You're welcome OLTB. I have toyed with buying some Halfords in the past, but am put of niche type retail shares after having held Dixons (DSGI) in the past. Maybe I should just get over that eh?

Ian.

[Wizard]

Thanks Ian - this has been one I've been looking at - and I think monabri has mentioned before about the ratio of on-line sales to physical store pick-up where staff have the opportunity to cross-sell. I also like their auto centre garages - there are several near me and they always seem to be full.

Cheers, OLTB.

You're welcome OLTB. I have toyed with buying some Halfords in the past, but am put of niche type retail shares after having held Dixons (DSGI) in the past. Maybe I should just get over that eh?

Ian.

Ian

Surely way too small for you, market cap only just keeps them in FTSE350. Certainly far below size I would even spend time looking at.

Terry.

[idpickering]

Ian

Surely way too small for you, market cap only just keeps them in FTSE350. Certainly far below size I would even spend time looking at.

Terry.

Hi again Terry, at a market cap of £680m, they fall well below my usual screening £1Bn minimum market cap, so you are therefore correct. Too small for me. The 5% rise in sp as of now is nice for holders currently though.

Ian.

[monabri]

Thanks Ian - this has been one I've been looking at - and I think monabri has mentioned before about the ratio of on-line sales to physical store pick-up where staff have the opportunity to cross-sell. I also like their auto centre garages - there are several near me and they always seem to be full.

Cheers, OLTB.

Not guilty! Halfords has been discussed recently elsewhere;

viewtopic.php?f=15&t=13022&p=157174&hilit=Halfords#p157174

where their online business was highlighted by someone else. I expressed a concern that similar good to what HFD sell in store (meaning tools, polishes, car cleaners,radio,sat navs etc) could be bought online at a lower cost. This was too big a threat IMHO.

[OLTB]

Apologies - sorry monabri!

[Breelander]

Halfords has been discussed recently elsewhere ... where their online business was highlighted by someone else...

I think you are referring to me, here...
viewtopic.php?p=157260#p157260

Too small for some, but above my personal £500m absolute lower limit. I've held since 2011.

[Clitheroekid]

I bought some HFD at the end of May, as I felt the sell-off had been overdone. The 1.5 times covered yield of 5.5% was attractive, but as is often the case with shares that I buy my decision was influenced by the fact that it's a company that I've dealt with personally on several occasions, and I like them.

In particular, they saved me about £400 on a service. My Merc dealer quoted £850 for a service, but I discovered that HFD offer what they call a full manufacturer's service. This is identical in every respect to the main dealer service, but in my case it cost £450. The car's out of warranty, so a dealer service doesn't add anything of significance, and they were a pleasure to deal with, unlike my somewhat snooty Merc dealer.

It's encouraging that their online sales were up 11%, and it's interesting that 85% of the customers picked up the goods at a store. I think the stores will be less severely hit than many other retailers, as the type of products that HFD sell are often wanted by customers immediately. With a large network of stores customers can easily obtain products the same day, which gives HFD an advantage over online only retailers.

Also, because the products are wanted quickly they are probably less price-sensitive than goods that people are happy to wait a couple of days for.

Whilst I don't see them doing anything spectacular I feel they're a good `boring' share for the HYP part of my portfolio with a nice and (so far as one can ever say this) fairly high and safe yield.