Positive like-for-like sales momentum looks set to continue at car parts-to-bicycles retailer Halfords (HFD). Growing national interest in cycling is boosting business at the tills and offers a key catalyst for further forecast upgrades.
The running Shares favourite (see Plays, 20 Feb) pleased with first quarter trading update. Retail like-for-like sales grew by a better-than-expected 7.9%, driven by a stellar turn from the cycling category. Burgeoning interest in the sport, boosted by the Tour de France and with the Commonwealth Games to come, is lifting demand at a time when Halfords, which recently acquired Boardman Bikes, is investing in cycling ranges.
With other parts of Halfords’ retail business, including autocentres and car maintenance, trading positively there’s clear momentum behind the business. For the year to March 2015, Numis Securities looks for pre-tax profits of £78.7 million (2014: £72.8 million) and 10% earnings growth to 31p, as well as a dividend hike to 15.5p (2014: 14.3p).
