Automotive part retailer Halfords (LON:HFD) smashed analysts’ expectations over the Christmas period, boosted by increased sales in the cycling division and extended opening hours.
Group revenue for the 15 weeks to January 13th grew 11.4 percent, like-for-like retail sales up 7.0 percent.
All retail sections benefitted from its customer service initiative – the “Moving up a Gear” strategy – leading the group to announce a special dividend of 10 pence per share to be paid next month.
The figures compare to analysts’ average forecast of 3.6 percent and first half growth of 2.2 percent.
Halfords also took the opportunity to announce that it has entered into an operating agreement with TOTD, a UK mobile tyre fitting business, to “develop opportunities together to leverage each others’ capability and expertise”.
Alongside the deal, Halfords acquired a minority stake in the business of up to £8 million. The agreement includes projects to deliver certain sales and cost synergies and the opportunity for Halfords to trial a broader mobile delivery proposition for its motoring services.
Jill McDonald, Halfords’ chief executive, commented:
“I am very pleased with the strong sales performance across our business in the important third quarter of the year. We continue to make good progress implementing our “Moving up a Gear” strategy which will enable us to capitalise on the long term growth opportunities in our markets. We benefited from growth in new ranges, our unique “wefit” services and great execution by our colleagues over the busy peak period.”
The results will come as welcome news for investors, after Halfords reported a 12 percent drop in first-half profit in November after being affected by the fall in the value of the pound following Britain’s vote to leave the European Union.
Halfords shares are currently up 9.80 percent at 387.80 (1028GMT).