Business Review

Halfords has a unique retail proposition; it is both store of first choice for its customers and market leader in each of three core product categories in which it participates. In each category Halfords’ differentiation lies in the breadth of our range, innovation and the unique service proposition offered through the knowledge and fitting capability of our store-based colleagues.

Halfords’ customer offer covers an unrivalled spectrum of product; from the resilient and defensive characteristics of our needs driven, low average transaction value, car maintenance business through to the growth provided by a resurgent cycling market and the technological drivers within car enhancement.

Operating across a series of disparate markets, characterised by fragmentation of the competition, Halfords’ turnover is more than 15 times greater than its nearest direct competitor. This scale advantage, further evidenced by Halfords’ national coverage in the UK of 430 stores located mainly on prime out of town retail parks, enables the Group to deliver outstanding value to its customers.

In an environment where consumers are becoming more selective with regard to higher ticket expenditure, the defensiveness of the Halfords business model together with ongoing effective trading strategies has delivered a further year of strong sales growth, with sales 7.2% higher than the previous financial year. Demonstrating the underlying resilience of our business this represents the 20th consecutive year of such growth, with sales growth over the last two decades averaging more than 7% per annum.

Halfords continues to make good progress against each of the four elements of its business strategy:

• Investing in the store portfolio
• Leveraging the Halfords brand
• Improving the supply chain
• Marketing the Halfords’ service proposition

and we believe that these financial results demonstrate that our strategy is being translated into improved profitability and shareholder value.

Nick Wharton

Paul McClenaghan