Cycling helps boost Halfords' profits
Retailer on the acquisition trail, but are any cycling businesses on its shopping list?
Halfords Group, the automotive and leisure retailer, has revealed that its pre-tax profit jumped 26.7% in the year to 2 April 2010, on total revenue 4.6% ahead at £831.6 million, helped in part by continued strong sales and increased market share in its bicycles division.
Among the highlights from a cycling point of view as disclosed in a presentation to city analysts are a 57% rise in the number of Bikecare service plans sold, and the company’s stores serviced a whopping 444,000 bikes – a year-on-year increase of 47%.
Halfords, which now trades from 439 stores in the UK and has a further 30 in the Republic of Ireland, Poland and the Czech Republic, also confirmed that it had now sold 21,000 Boardman bikes, for which it has the exclusive distribution rights. The brand, of course, is currently sponsoring the sprints jersey in the Halfords Tour Series, for which the retailer has taken on the headline sponsor role this year.
During the year, the company made its first acquisition, Nationwide Autocentres, and chief executive David Wild said that the company planned to make further acquisitions, without revealing what businesses might be on the shopping list.
That doesn’t stop us speculating, though, and with cycling forming such an important part of the business and continuing to become more popular, and the group also looking to the internet for growth, a sales channel that allows it to stock more specialised, premium products than it can do in its stores, you can see where that acquisition strategy might potentially lead.