Halfords (HFD) Interims

[Breelander]

One I hold in my HYP. Yes it's a retailer, but a niche one that could benefit from a downturn (motorists turning to cheaper or DIY servicing). The headlines looked good...

Revenue growth across all areas of the business
· Robust Retail sales improving through the period
· Motoring +1.1% and Cycling +4.6% on a LFL basis, with total Cycling sales up 15.4%
· Tredz & Wheelies revenues up 25% year-on-year since acquisition
· Autocentres sales +0.9% LFL and +3.6% in total
· Online sales across the Group increased 30%

...but it tanked today, SP down nearly 7%. Probably because of this...

Operating margins impacted by investments in long-term growth, FX and promotional activity
•Average hedged US$ rate declined from $1.56 to $1.46 accounting for circa 100bps of gross margin, to be mitigated over time
•Mix impact from first-time inclusion of lower-margin Tredz and Wheelies
•Cycling promotional activity during the Summer was deeper than last year
•Investment in training and pay as part of our Gears programme, leading to lowest ever colleague turnover

http://www.investegate.co.uk/halfords-g ... 00098034O/

At a forecast cover of 1.8 and yield of 5.2% it could be tempting for those brave enough to venture into retail.
source: http://www.digitallook.com/equity/Halfords_Group