Halfords has committed to repaying all the £10.7m in furlough money it received from taxpayers, thanks to stronger-than-expected sales during the latest Covid lockdown.
The cycle and car parts retailer said like-for-like group sales unexpectedly jumped 6.2% in the first seven weeks of 2021. It now expects to report annual pretax profit of between £90m to £100m, above consensus estimates for £71m, as it benefits from the cycling boom during lockdown. Profits were £55.9m for the year to April 2020.
The group – which has 443 stores, 367 garages and a fleet of 121 auto servicing vans – committed to repaying the furlough cash it used to keep staff on its payroll during lockdown.
“Although we have continued to experience a volatile trading environment across the first seven weeks of the fourth quarter, overall trading has been stronger than we initially anticipated across the business,” Halfords said.
The company said its auto centre business grew 13% over the seven weeks to 19 February and increased its market share, thanks to strong demand for both its garage and mobile van servicing business. That was despite a 40% drop in car travel during the lockdown, compared with pre-pandemic levels.
Cycling revenues also jumped 43% thanks to sales of adult and children’s bikes and “exceptional growth” from its higher-end Tredz cycling brand. Halfords has benefited as consumers increasingly turned to cycling as a way to avoid public transport during the Covid pandemic, as well as for leisure and exercise.
However, the company warned over further uncertainty in the weeks ahead. “Trading patterns continue to be volatile, with sales before Easter particularly difficult to predict while the UK remains in lockdown. As the country starts to open up once more, our overriding priority remains the health and safety of our colleagues and customers,” Halfords said.
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Halfords to repay £10m Covid furlough cash after strong sales