Bike spike sends Halford profits soaring

Strong sales of cycling goods during lockdown adds £20m to retailer’s predicted first-half pre-tax profits

Written by Georgie Dobie

Posted 01.10.2020 | Retail

Bike spike sends Halford profits soaring thumbnail

Halfords has upgraded its profit guidance for the year after experiencing “unprecedented levels of demand” for bikes and cycling equipment throughout the pandemic.

The cycling and motoring retailer reported a 46 per cent like-for-like lift in its bike business during the five weeks ending 25 September 2020, the period where the summer spike tends to round off.

Expected profit before tax for the first half of FY21 is now expected to be in excess of £55m, compared with the £35-40 it predicted in early September.

Halfords says the performance highlights “the strength of our unique proposition and continual improvement in supply to meet unprecedented levels of demand”.

The retailer benefitted from stronger than usual sales during the pandemic, as families spent more on goods like bikes and other outdoor ride-ons rather than foreign holidays, festivals and social gatherings. Servicing and other add-ons also saw a rise as a result of restrictions.

But it has warned that a second lockdown or further impact from covid-19, which it says “seem more pronounced” in recent weeks, could hit its bottom line for the rest of the year, and it remains “cautious” about its second half results.

“We are well placed to address any headwinds we may face and capitalise on the tailwinds as they arise,” the retailer added. “Our balance sheet and liquidity position remain strong.”

Halford’s will post its full interim results on 18 November.

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