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Annual Report and Accounts for the Year Ended 3 April 2020

Halfords is the UK’s leading provider of motoring and cycling products and services.

Halfords is the UK’s leading provider of motoring and cycling products and services.

A Year of Focus and Momentum

We are fulfilling our vision to be super-specialist...

Halfords is the nation’s go-to retailer and services provider for motorists and cyclists

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...by responding to the nation’s needs

Evolving into a services-focused business

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...and building a sustainable future...

Acting responsibly for a sustainable future

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...always caring about our customers’ lives on the move.

Our colleagues are the driving force behind our success

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A year of focus and momentum

We are fulfilling our vision to be super-specialist...

Halfords is the nation’s go-to retailer and services provider for motorists and cyclists

Read more

...by respondingto the nation’s needs

Evolving into a services-focused business

Read more

...and building a sustainable future...

Acting responsibly for a sustainable future

Read more

...always caring about our customers’ lives on the move.

Our colleagues are the driving force behind our success

Read more

A Year of Focus and Momentum

We are fulfilling our vision to be super-specialist...

...and building a sustainable future...

...by responding to the nation’s needs...

...always caring about our customers’ lives on the move.

Group Highlights

Revenue (£m)1

+0.3%

Revenue

Underlying Profit Before Tax 1, 2

-4.9%

Underlying profit before tax

Profit Before Tax (£m)1, 2

-55.5%

Profit before tax

Dividend Per Ordinary Share (p)

-66.7%

Dividend Per Ordinary Share

Underlying Basic EPS (p)1, 2

-0.8%

Underlying Basic EPS

Basic EPS (p)1, 2

-51.4%

Basic EPS

Profit before tax

-23.7%

Dividend Per Ordinary Share

+3.0%

Profit before tax, after non-recurring items

-23.7%

Revenue (£m)1

+0.3%

Underlying profit before tax(£m)1, 2

-4.9%

75%

Group revenue matched to customers

26%

Total Group sales which are service-related

82%

of halfords. com online orders click and collected in-store

15%

Total Group sales from B2B channels

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Chairman’s Statement

In a year dominated by political uncertainty, low levels of consumer confidence and another very mild winter, Halfords Group turned in a resilient and highly credible performance.

Chief Executive’s Statement

Growth in services is a critical part of our strategy and our ability to provide these from approximately 900 fixed and mobile locations across the UK provides customers with a convenience unmatched by any other UK business.

Our Marketplace

Our Motoring and Cycling products segments remain core but we have a greater market opportunity in growing our existing services business. We will evolve into a consumer and B2B services-focused business, with a greater emphasis on motoring.

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Inspire

Inspire our customers through a differentiated, super-specialist shopping experience

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Support

Support our customers through an integrated, unique and more convenient services offer

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Lifetime

Enable a life-time of motoring and cycling

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Inspire

Inspire our customers through a differentiated, super-specialist shopping experience

Read more

Support

Support our customers through an integrated, unique and more convenient services offer

Read more

Lifetime

Enable a lifetime of motoring and cycling

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Inspire

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Support

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Lifetime

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Inspire

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Support

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Lifetime

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Our ESG Strategy

Championing the shift to electric smart travel through education, engagement and community support

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Our ESG Strategy

Help put the consumer in control, through products, services and solutions

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Our ESG Strategy

Walk the walk: make our business carbon neutral by 2050

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Our Corporate Governance

We have implemented effective frameworks and practices to ensure that high standards of governance, as well as good values and behaviours, are consistently applied throughout the Group.

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Our Principal Risks and Uncertainties

The Board carried out an assessment of the Group’s principal risks during the year, considering whether existing risks had changed in severity and whether new risks had materialised during the year.

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Investment Case

1

Market-leading business

We are the UK’s largest retailer of motoring and cycling products and services, allowing us to drive benefits in procurement, innovation and customer offering. In car servicing, the market is highly fragmented with no clear leader – with 2% share we have significant opportunity for growth.

2

Value-creating opportunities

Our strategy will see us develop into areas with good longterm growth prospects such as motoring services, B2B and electric mobility. We also have opportunities to significantly improve return on invested capital.

3

Building a service-focused business

In the medium-term, half of our business will be in Services – which are essential in their nature – meaning we are a more resilient business with higher customer retention, a lower risk profile and stronger and more sustainable returns on capital.

4

Strong balance sheet and cash generative

The Group has always maintained a strong balance sheet and benefits from a cash generative business model, with good Free Cash Flow enabling investment in our plan.

5

Dividend returns

Until the COVID-19 pandemic we have consistently paid a dividend, supported by strong levels of Free Cash Flow. In normal times, we remain committed to returning cash to shareholders through an ordinary dividend.

1

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

2

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

3

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

4

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

5

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

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