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Halfords’ profits hit as sterling slump

Halfords’ profits hit as sterling slump

PARIS: Halfords’ success in driving up sales across its car and bicycle business has been scuppered by the slump in sterling, which has driven up the cost of the parts it imports.

Over the summer Halfords’ retail division of motoring, cycling and leisure products grew its like-for-like sales by 2.4pc. Meanwhile its garage servicing and auto repairs arm delivered like-for-like growth of 0.9pc in the 26 weeks to the end of September.

But despite a 6.3pc increase in revenue to £567.3m, Halford’s pre-tax profits sank 16.7pc to £39.1m due to increased spending on promotional activities, staff investment and and more expensive imports, which the company buys in dollars. Halfords put the cost from sterling’s devaluation at around £6m in the first half.

“The depreciation of sterling brings cost headwinds,” said Jill McDonald, chief executive. “However, we have developed a number of initiatives to mitigate the profit impact and remain confident in the underlying performance of the group.”

The company’s share price plummeted almost 5pc to 327p.