May 22, 2018

Halfords drops 13% after caution on sterling and cycling

Shares in Halfords opened 13 per cent lower on Tuesday after the bike and auto accessories retailer said the weaker pound had taken a chunk out of profits and was likely to keep holding it back. Underlying pre-tax profits were down £3.8m to £71.6m in the year to the end of March, Halfords said, after absorbing a £25m "Additional cost of sales" as a result of the weaker pound against the dollar. We anticipate the motoring market will remain robust and continue to see good growth prospects for the cycling market although we do not expect prices to rise in cycling this year as in the previous year. Given this, the phasing of our remaining FX mitigation actions and decisions to accelerate investment in services and customer capabilities, we currently anticipate FY19 Underlying Profit Before Tax to be broadly in line with FY18.

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