04 October 2012 10:31
Halfords saw a boost from the so-called "Wiggins effect" over the summer, as the struggling retailer returned to growth and said that profits were likely to beat expectations.
Just hours after unveiling a new chief executive in former Pets At Home boss Matt Davies, the company revealed a 4.6% increase in retail sales in the 13-week period to September 28th, compared to a 7.5% drop in the first quarter.
The bounceback was driven by a 14.7% surge in cycling sales, which the business put down to better weather and the British success in the Tour de France and Olympics from the likes of Bradley Wiggins, Sir Chris Hoy and Lizzie Armitstead.
Halfords said it expected pre-tax profits for the first half of the year to be £40 million to £42 million, nearly 20% higher than City forecasts, while full year profits are expected to be at the top end of previous guidance of £66 million to £70 million.
The better-than-expected performance will be a positive welcome for Mr Davies, who takes up the top post today following a tough period for the group.
He replaces David Wild who quit in July following a profit warning and a sharp sales decline, as record rainfall hit sales of cycles and outdoor goods.
Chairman Dennis Millard said the group had recovered some ground lost in the spring.
But he added: "Our second-half planning assumptions, however, remain cautious given the prevailing pressures on the consumer as we approach the important winter and Christmas trading periods."
Mr Davies – who was chief executive of Pets At Home for eight years – will be paid a £500,000 salary and is entitled to a potential £750,000 annual bonus, with up to a further £750,000 in long-term incentive shares from next August.
He said he wants to help the group achieve its "full potential".