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Halfords targets profit growth in 2021 with new strategy

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LONDON (Reuters) – Bicycles-to-car-parts retailer Halfords <HFD.L> said it would step up investment to deliver profit growth from its 2021 financial year with a programme to upgrade its stores, services and digital offering.

In an update published on Thursday ahead of its Capital Markets Event, Halfords said capital expenditure would increase from the prevailing guidance of about 40 million pounds per year to up to 60 million pounds a year over the medium term.

The strategy is to make Halfords “a truly differentiated, service-led super specialist.”

The group, which will also seek to cut costs and gain efficiencies, forecast full-year 2020 pretax profit flat on full-year 2019 with mid-single-digit percentage annual growth anticipated thereafter as the plans take effect.

“Customer behaviours and the competitive environment are changing and we face an increasing number of headwinds,” said Chief Executive Graham Stapleton, a former Dixons Carphone <DC.L> executive who joined Halfords in January.

“Our new long term strategy means we will become far more focused on the categories we are best known for, motoring and cycling.”

Sky News reported on Wednesday that Halfords has made a takeover offer for struggling rival Evans Cycles.

Shares in Halfords, down 4 percent so far this year, closed Wednesday at 335.8 pence, valuing the business at 669 million pounds.

(Reporting by James Davey; editing by Sarah Young)

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