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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 nation’s go-to retailer and services provider for motorists and cyclists
Evolving into a services-focused business
Acting responsibly for a sustainable future
Our colleagues are the driving force behind our success
Revenue (£m)1
+0.3%
Underlying Profit Before Tax 1, 2
-4.9%
Profit Before Tax (£m)1, 2
-55.5%
Dividend Per Ordinary Share (p)
-66.7%
Underlying Basic EPS (p)1, 2
-0.8%
Basic EPS (p)1, 2
-51.4%
-23.7%
+3.0%
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
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.
Inspire our customers through a differentiated, super-specialist shopping experience
Support our customers through an integrated, unique and more convenient services offer
Enable a life-time of motoring and cycling
Enable a lifetime of motoring and cycling
Championing the shift to electric smart travel through education, engagement and community support
Help put the consumer in control, through products, services and solutions
Walk the walk: make our business carbon neutral by 2050
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.
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.
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.
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.