Halfords feels the pinch as bike sales punctured

HALFORDS shares slammed into reverse after it warned profits would be hit by higher costs and lower spending on bikes by customers feeling the pinch.

The cycling and motoring retailer reported profits of £29m for the six months to the end of September – half what it made in the same period last year.

As such, it warned profits for the full year would be at the bottom end of its £65m to £75m range.

Shares fell 7.3pc, or 15.5p, to 198.1p. The slump in profits came despite a 10.2pc rise in half-year revenues to £765.7m. But while revenues at its autocentres – which specialise in car servicing, MOTs and repairs – jumped 70pc to £265.2m, the retail business saw a 7.1pc decline to £500.5m.

Within its retail arm, sales of motoring products from windscreen wipers to engine oil fell 2.4pc. But cycling revenues were down nearly 12pc as demand for bikes and bike parts eased.

With sales in the cycling division cooling following a boom during the pandemic, the group is now focusing on building its revenue stream from servicing bikes and cars. Service-related sales account for 42.6pc of group revenues and are expected to rise to more than 50pc next year after its acquisition of tyre dealer Lodge Tyre.

The FTSE 100 rose 0.17pc, or 12.4 points, to 7465.24 and the FTSE 250 gained 0.4pc, or 78.13 points, to 19,500.50.

The proposed tie-up between two of the country’s biggest newspaper publishers has been scrapped as The Scotsman’s owner decided against a bid for its larger rival Reach, which owns the Mirror and Express.

National World – run by newspaper tycoon David Montgomery – said the ‘circumstances are not aligned’ having previously said it was exploring a potential bid for its larger rival three weeks ago.

The deal would have combined two major publishers of local and regional newspapers in the UK.

Reach, formerly known as the Mirror Group, owns more than 130 titles across the UK.

They include the Liverpool Echo, the Daily Record, the Manchester Evening News, the Star and OK! Magazine, as well as many more local publications.

National World, which owns the Yorkshire Post, said there would have been ‘considerable industrial and financial advantages to combining the newspaper portfolios of the two companies’, but concluded the circumstances were not right.

Reach shares gained 2.6pc, or 2.9p, to 113.4p but National World lost 2.5pc, or 0.5p, to 19.25p.

Boohoo was forced to respond to claims of poor working conditions at its site in Burnley following newspaper reports.

The fast fashion brand said making sure ‘people are safe and comfortable in their workplace is our highest priority’. Shares sank 1.1pc, or 0.43p, to 38.38p.

Britvic rose 2pc, or 15.5p, to 784.5p as it enjoyed rising sales and profits following warmer weather and the easing of Covid restrictions. The drinks maker behind Robinsons, Lipton ice tea and Fruit Shoot saw its revenue jump 15.5pc to £1.62bn in the year to September. Profit soared 45.3pc to £140.2m in the period.

Johnson Matthey received a thumbs up from investors after the chemicals group revealed how it would make savings by streamlining the business.

Around 15pc of senior management jobs will be axed to cut costs by £150m. Shares gained 3.5pc, or 72p, to 2105p.

Thread maker Coats saw sales rise by 6pc in the four months to October, beating the 5pc figure analysts expected. Coats flagged foreign exchange headwinds of 5pc compared with 3pc to 4pc in the previous update. Shares slid 0.7pc, or 0.5p, to 68p.