The bikes and motoring retailer said pretax profits rose 184% to £64.5m in the year to 2 April, as total sales rose almost 14% to £1.3bn.
Growth was led by a 54% rise in sales of cycling products at established stores as the nation turned to two wheels for leisure and to socially distanced alternatives to public transport. Sales of e-bikes and electric scooters were particularly strong – up 94%. The company also repaired and serviced over 1m bikes last year as the nation dug old sets of wheels out of sheds and garages.
Graham Stapleton, the chief executive, said the company had tens of thousands of bikes arriving in stores every week but could still not promise full availability because some branded manufacturers could not keep up with demand.
“Supply was, and remains, a challenge, but where necessary we quickly adapted specifications and componentry to mitigate bottlenecks in production and worked with new suppliers to achieve a steady intake of bikes throughout the year,” Stapleton said. He said the company had already bought in enough e-bikes and scooters to support another 90%-plus rise in sales this year.
The cycling performance offset a 12% fall in motoring products at Halfords stores as the number of cars on the road fell by a quarter last year.
The group’s Autocentre car servicing group also increased sales by almost 32% as it helped families get cars back on the road after time out during lockdowns by sending technicians out to homes with a new fleet of 143 vans.
Halfords is aiming to add 60 vans in the year ahead and looking to acquire further motor service businesses as it plans to increase its number of garages to as many as 550 from 374 at present.
“Covid-19 was clearly the most significant challenge faced by any retailer, but we have also faced Brexit, container shortages, port congestion and more recently, the blockage of the Suez canal.
“Our performance not only showcases the resilience of our core business and the relevance of our strategy but also the importance of our progress in creating a more efficient and profitable business,” Stapleton, said.
The group’s profits were boosted by a radical overhaul of its store estate including the closure of 22 Cycle Republic outlets and 42 Halfords stores last year, a move that will save more than £15m a year in costs. Online sales more than doubled to account for more than two-fifths of the group total.
Halfords said demand for bikes and cycling products had remained strong in recent weeks – up 42% in the nine weeks since 2 April. It has tripled its bike-building capacity to help meet demand as the retailer’s customer research showed that more than a third of UK adults intended to buy a bike in the next six months.
Sales are expected to stay buoyant as restrictions on foreign travel and a return to more normal motoring helps cycling and prompts a significant rise in motor-touring kit for British holidays such as roof boxes, cycle racks and even plug-in electric fridges.
Increased adoption of cycling in the past year is likely to continue thanks to government-backed investment in infrastructure and “societal need to tackle climate change”, Stapleton said.
Halfords is taking on 2,000 more electric bike, car and scooter technicians, on top of 800 already on board, to cater to changing travel habits.
“The general economic outlook remains challenging, with consumers likely to be more cautious,” said Stapleton. “The dramatic acceleration in online shopping and a more challenging economic picture have brought value into sharp focus.”