Halfords has addressed the need for changes to the apprenticeship levy under current market conditions.
- The company’s financial results display stagnant sales and minor profit reductions for the first half of 2024.
- Despite these challenges, Halfords’ Autocentres showed growth, contrasting with a decline in retail sales.
- Rising costs due to the recent UK Budget pose significant concerns for the company’s operations.
- Plans to expand the Fusion Motoring Services programme are underway to strengthen business ties.
Halfords has publicly urged the government to expedite changes to the apprenticeship levy, as the company’s financial results for the first half of 2024 reveal stagnation in sales and a slight fall in profits. The retailer’s underlying pre-tax profit slipped 1.4% to £21m over the 26 weeks to 27 September, while sales declined by 1% to £864.8m. Like-for-like sales remained nearly unchanged at -0.1%, with growth in the Autocentres helping to counterbalance a small drop in retail performance.
A closer look at the details shows that the Autocentres business, which comprises about 40% of Halfords’ sales, reported a modest 0.8% increase in like-for-like sales. Conversely, the retail division experienced a 0.7% decrease in like-for-like sales, primarily attributed to persistent weakness in the cycling sector. This segment continues to perform approximately 33% below the levels observed before the pandemic.
In light of the recent UK Budget, Halfords forewarned about the £23m increase in direct labour costs, highlighting the financial challenges ahead. CEO Graham Stapleton stated, “The cost implications from the recent UK Budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face.” Halfords remains focused on mitigating these cost pressures by urging the government to consider alternative business support methods, such as accelerating Apprenticeship Levy reform.
Halfords has also expressed concerns about the ongoing uncertainty in the UK economy, noting the potential impact of budget changes on consumer behavior and market trajectory. Despite these challenges, Halfords is optimistic about achieving its full-year targets. However, the company anticipates short-term costs, including the temporary closure of some garages, to facilitate the rollout of the Fusion Motoring Services programme.
CEO Graham Stapleton expressed confidence in the company’s strategic direction, stating, “I am really pleased with the progress we have delivered in the first half. Against ongoing headwinds, we have continued to focus on controlling the controllable, with a disciplined approach to cost and margin optimisation.” Halfords is now aiming to expand its Fusion Motoring Services locations to 40 sites by the end of FY25, while continuing to leverage its omnichannel platform to meet strategic objectives.
Halfords remains optimistic about its growth trajectory despite current market challenges and strategic adjustments underway.
