Bicycles and car parts retailer Halfords Group PLC on Thursday reported a fall in pretax profit due to acquisition-related cost rises, but said revenue grew and it remains on track for its full year.
The mid-cap company said it made a pretax profit of GBP39.1 million in the 26 weeks to September 30, down 16% from the GBP46.4 million it made a year before due to one-off costs and higher operating expenses related to the acquisition of bicycle retailer Cycle Republic, and the opening of new Cycle Republic stores.
Pretax profit without exceptional items, however, also fell, down 12% year-on-year to GBP40.8 million, driven by a 275 basis point decline in its retail gross margin, partly as a result of the depreciation of sterling, to 47.6% from 50.3%. The group invested in its services-related sales in the first half, which resulted in sales from this channel rising 14% year-on-year, but with higher related costs.
Total revenue for the group increased to GBP567.3 million from GBP533.5 million, up 6.3% and growing 2.2% on a like-for-like basis. Retail like-for-like revenue was up 2.4% while Autocentres like-for-like revenue was 0.9% higher.
Halfords declared an interim dividend of 5.83 pence per share, up 3.0%from the 5.66p paid a year prior.
Halfords said it remains confident it will meet market expectations for the full year to March 2017.