Underlying Profit Before Tax, on a pre-IFRS 16 and 52-week basis, was £55.9m, only marginally lower than last year despite the challenging retail environment and the impact of COVID-19. Excluding the impact of COVID-19 and mid-year acquisitions, underlying profit was in line with the prior year. In part due to another strong performance on working capital, Net Debt reduced by £8.6m in the year, ending at £73.2m. Further details are available in the Chief Financial Officer's Report.
Considering the uncertainty driven by the potential future impact of COVID-19, the Board has taken a series of measures to preserve cash, including the suspension of the dividend. The final dividend payment is therefore nil, meaning the full-year ordinary dividend is 6.18 pence.
An Acceleration of Our Strategy
In November 2019, we announced our intention to accelerate a key part of the Strategy. As we explained then, we believe this is the right time to accelerate the growth of our motoring services business, enhancing our differentiated position in a fragmented market and providing the Group with a less capital-intensive source of profitable growth. As a result, Halfords will evolve into a consumer and B2B services-focused business, with a greater emphasis on motoring, generating higher and more sustainable financial returns.
This accelerated strategy remains fundamentally unchanged post-COVID-19 but we will adjust some aspects of the plan and the way we execute it. Capital expenditure will be lower in the short term, so we will defer the capital-intensive aspects of the plan until we have the confidence to increase investment. We will, however, accelerate other aspects, such as our investment in Digital and reducing the property cost of our Retail estate. Our long-term strategy remains the right direction for Halfords and the way we have traded through COVID-19 only underlines our confidence that we are on the right path.
The Year Ahead
Last year I spoke about the uncertainty of Brexit and the challenging economic backdrop. These remain but have now been overtaken by the unprecedented event of COVID-19. It is very difficult to know with any degree of certainty how the near-term future will look, but whatever the environment, Halfords Group remains in a strong position to weather the storm. We have the right strategy in place for the long-term and an experienced leadership team to deliver it, supported by thousands of dedicated colleagues. I have no doubt that the future of Halfords is in safe hands.
6 July 2020