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Halfords (HFD) Ordinary 1p Shares

Sell:307.60p Buy:309.40p 0 Change: 4.80p (1.58%)
Market closed Prices as at close on 17 September 2021 Prices delayed by at least 15 minutes | Switch to live prices |
Ex-dividend
Sell:307.60p
Buy:309.40p
Change: 4.80p (1.58%)
Market closed Prices as at close on 17 September 2021 Prices delayed by at least 15 minutes | Switch to live prices |
Ex-dividend
Sell:307.60p
Buy:309.40p
Change: 4.80p (1.58%)
Market closed Prices as at close on 17 September 2021 Prices delayed by at least 15 minutes | Switch to live prices |
Ex-dividend
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

HL comment (8 September 2021)

Halfords' revenue rose 10.5% in the first 20 weeks of the financial year. Compared to pre-pandemic trading, revenue rose 18.7%, or 16.8% on a like-for-like basis. That reflects double digit growth in all business areas.

The group warned of challenges, including cost inflation, freight disruption and capacity issues, as well as recruitment challenges among technicians and HGV drivers.

Halfords still expects to achieve full year pre-tax profit of over £75m.

The shares fell 1.7% following the announcement.

View the latest Halfords share price and how to deal

Our view

Halfords performed exceptionally during the pandemic, and it only seems to be gaining momentum. Double digit boosts to revenue aren't something many retailers - especially those with a bricks and mortar presence - can boast.

While its status as an essential retailer and the staycation boom were tailwinds outside its control, we think that performance highlights fundamental strengths.

Servicing an unprecedented boom in cycling revenue is a triumph of inventory management. That's been helped by the rapid shift to online sales, which rose over 100% for the full year. Given the increasing importance of digital sales it should be no surprise the physical estate is being streamlined - with an additional 42 shops closed in recent times. Remaining stores are focused on delivering what online rivals can't: click & collect and a face-to-face service from an employee who knows what they're talking about.

The success of the new 'Mobile Expert' offer, which sees Halfords technicians come straight to your door, is testament to what the combination of the right product and staff expertise can achieve if delivered at the right time in the right place. The offer is in its infancy, but growth is impressive and has the potential to keep expansion ticking over while also encouraging cross-selling into the Autocentres themselves. The fact both Autocentre MOTs and Mobile Experts can be booked directly from the retail website should help the group make the most of its large retail customer base.

We're also reassured by the fact the balance sheet is in good health. That financial strength means the ordinary dividend is back on the table, but any extra surplus cash will first be funnelled to protecting the balance sheet and investing for growth. Dividend growth is therefore unlikely to shoot the lights out.

We're supportive of that move, because plenty of uncertainty remains. Supply constraints - especially in cycling - and recruitment challenges across garage and mobile van technicians mean sales growth is slower than it might otherwise be. We also worry what the next important summer season will look like as the world gets back to normal and staycations become less popular.

Halfords' end markets have shown considerable resilience. We think the mix of online sales portal and real-world expertise is a winning formula long term. That should help it survive the turmoil engulfing much of the retail sector. We've noticed an increased air of caution in management's commentary though, so some ups and downs are likely.

Halfords key facts

  • Price/earnings ratio: 11.2
  • Ten year average Price/earnings ratio: 11.8
  • Prospective dividend yield (next 12 months): 2.9%

All ratios are sourced from Refinitiv. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn't be looked at on their own - it's important to understand the big picture.

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20 week trading update (percentage growth figures are compared to pre-pandemic sales)

Retail revenue rose 7.8%, 17.1% on a like-for-like (LFL) basis. LFL growth reflects customers transferring from closed shops. Increased staycations helped the sales of touring products, and Motoring LFLs were up 11.2%. Cycling grew 24.2% on an LFL basis, including a strong increase in electric bikes.

Halfords said: ''the global cycling supply chain continues to experience considerable capacity constraints, leading to low availability of bikes throughout the period''. The group expects supply chain issues to continue for some time.

Overall online sales rose 83%.

Autocentres revenue rose 86.2% (LFL 15.5%), reflecting increased scale and improved focus on B2B. The Mobile Expert Vans recorded growth of 61.7%. There have been ''recruitment challenges'' and Covid-related absences for garage and Mobile Expert Vans technicians, which lowered sales.

Find out more about Halfords shares including how to invest

This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.


Previous Halfords updates
















Halfords - Strategy Update Thu 27 September 2018




Halfords - Moving up a gear Thu 19 January 2017


Halfords: A solid year Wed 01 June 2016



Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used.

The London Stock Exchange does not disclose whether a trade is a buy or a sell so this data is estimated based on the trade price received and the LSE-quoted mid-price at the point the trade is placed. It should only be considered an indication and not a recommendation.

Trades priced above the mid-price at the time the trade is placed are labelled as a buy; those priced below the mid-price are sells; and those priced close to the mid-price or declared late are labelled 'N/A'.