CITY REACTION

Retailer Halfords has posted a 10.5 per cent fall in annual profits as it took a hit from the weak pound and saw the timing of Easter knock recent sales.

The car parts and cycles chain reported pre-tax profits of £71.4 million for the year to the end of March, down from £79.8m a year earlier, as the pound’s slide since the Brexit vote sent the costs of imported goods surging by £14m.

It also revealed a 1.2 per cent drop in like-for-like retail sales in the final three months due to the later timing of Easter this year.

But the group said retail sales were 3.9 per cent higher on a more comparative basis for the 15 weeks to 28 April.

Outgoing chief executive Jill Mcdonald – who is leaving in October to head up Marks & Spencer’s clothing, home and beauty business – said: “Profit performance for the year was impacted by the weaker pound, but our plans are well developed and I am confident this will be offset over time.”

Halfords warned the weak pound will continue to impact

0 Like-for-like sales across the group motored ahead 2.7% over the year

NICHOLAS HYETT, ANALYST profits, but said plans to offset the cost pressures were “encouraging”.

Mcdonald added that while there was “uncertainty” in the consumer spending outlook given the squeeze on household finances from rising inflation, the group has not so far seen any impact of this on trading.

She said: “We enter a challenging period from a macroeconomic perspective, with uncertainty over consumer spending and sterling depreciationbringinginputcostheadwinds. However, we approach this on the front foot and from a position of strength.”

On an underlying basis, pretax profits were 7.5 per cent lower at £75.4m. Despite the Easter-affected final quarter, like-for-like group sales rose 2.7 per cent over the year, with retail sales up 3.1 per cent.

The firm saw a strong performance from bikes, with sales leaping 5.1 per cent, while travel solutions sales lifted 7.9 per cent. Its autocentres service delivered a 0.6 per cent rise in sales across the year.

“We just hope that the group doesn’t lose its way again once Jill Mcdonald has left for pastures new”