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UK's Halfords profit falls 18%, sees flat outcome in new year

UK's Halfords profit falls 18%, sees flat outcome in new year
FILE PHOTO: A commuter cycles in central London, Britain January 19, 2017. REUTERS/Stefan Wermuth   -   Copyright  Stefan Wermuth(Reuters)
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LONDON (Reuters) – British bicycles and car parts retailer Halfords on Tuesday reported a 18% fall in annual profit and, with consumer confidence “fragile”, forecast a flat outcome in its new financial year.

In September, Halfords, under new CEO Graham Stapleton, set out a strategy to become “a truly differentiated, service-led super specialist,” focused on motoring and cycling.

But its shares have gone backwards and are down 38% over the last year.

“We continue to believe our customer strategy is the right direction for the long-term sustainability of our business. The delivery of this plan is likely to take longer than we expected as we adapt the plan to the current environment,” Halfords cautioned, highlighting challenging levels of consumer confidence.

For the year to March 29 Halfords made an underlying pretax profit of 58.8 million pounds. That was towards the bottom end of guidance of 58-62 million pounds, issued in January when Halfords warned on profit, and was down from 71.6 million pounds in the 2017-18 year. Revenue was flat at 1.14 billion pounds.

The profit decline was driven by a lower motoring sales mix year-on-year, due to mild winter temperatures, weakened consumer confidence in the run up to Christmas, as well as investment in the business.

Shares in Halfords closed Monday at 239 pence, valuing the firm at 476 million pounds.

(Reporting by James Davey, Editing by Paul Sandle)

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