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Share Name Share Symbol Market Type Share ISIN Share Description
Halfords Group Plc LSE:HFD London Ordinary Share GB00B012TP20 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  4.00 1.69% 240.50 240.00 241.50 241.50 234.00 241.00 2,681,802 16:35:14
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Retailers 1,155.1 19.4 8.9 27.0 479

Annual Financial Report

04/08/2020 7:10am

UK Regulatory (RNS & others)


 
 Halfords Group PLC (HFD) 
Annual Financial Report 
 
04-Aug-2020 / 07:10 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
Halfords Group plc 
 
Annual Report and Accounts for period ended 3 April 2020 
 
including the Notice of Annual General Meeting ("AGM") - convened for 15 
September 2020 
 
The Company announces that the Annual Report and Accounts for the period 
ended 3 April 2020 and Notice of Annual General meeting of the Company, have 
been posted or otherwise made available to shareholders and published on its 
website www.halfordscompany.com [1]. 
 
The Company's 2020 Annual General Meeting will be held at Halfords Group 
plc, Support Centre, Icknield Street Drive, Washford West, Redditch, B98 0DE 
on Tuesday 15 September 2020, commencing at 11:30 am. 
 
In accordance with Listing Rule 9.6.1, a copy of the Annual Report and 
Accounts and the Notice of Annual General Meeting of the Company have been 
submitted to the UK Listing Authority, and will shortly be available for 
inspection via the National Storage Mechanism at 
https://data.fca.org.uk/#/nsm/nationalstoragemechanism [2] 
 
Tim O'Gorman 
 
Company Secretary 
 
Halfords Group plc 
 
The Appendix to this announcement is a supplement to our preliminary 
statement of Financial Results made on 7 July 2020 (the "Final Results 
Announcement"). It contains the information required pursuant to Disclosure 
Guidance and Transparency Rule 6.3.5 that is in addition to the information 
communicated in the Final Results Announcement, and should be read together 
with the Final Results Announcement. 
 
Appendix 
 
The Chief Financial Officer's Report in the preliminary statement of the 
Final Results Announcement issued on 7 July 2020 includes a commentary on 
the principal commercial and financial risks and uncertainties to achieving 
the Group's objectives. 
 
Further details of other principal risks and uncertainties relating to the 
Halfords Group are set out on pages 68 to 78 of the 2020 Annual Report and 
Accounts. Specific financial risks (e.g. liquidity, foreign currency) are 
detailed in note 22 to the Financial Statements on pages 182 to 186 of the 
2020 Annual Report and Accounts. 
 
The following is extracted in full and unedited form from the 2020 Annual 
Report and Accounts. 
 
Risk Title       Risk           Current          Focus in 2020 
                 Description    Mitigation       Priorities in 
                                                 2021 
Strategy 
Capability and   If we do not   Strategic 
capacity to      have           priorities have 
effect           sufficient     been clearly 
significant      capacity and   defined          ? Accelerated 
levels of        capability (in following an     growth in our 
business change  terms of our   in-depth         motoring 
                 people,        strategic        services 
                 processes and  review,          business. 
                 systems) to    supported by 
(no change)      successfully   comprehensive 
                 implement the  customer, 
                 changes        colleague, 
                 necessary      market and 
                 across the     competitor       ? Specialist 
                 business, we   research and     resource 
                 will not       with powerful    brought in to 
                 realise the    insights from    boost existing 
                 expected       our Single       capability. 
                 benefits of    Customer View. 
                 our strategy 
                 and the 
                 business will 
                 not be         A Transformation 
                 sustainable.   Board provides   ? Robust 
                                governance over  business case 
                                the change       template and 
                                programme        Capital 
                                necessary for    allocation 
                                the delivery of  model 
                                the Strategy.    developed. 
                                The Board 
                                ensures there is 
                                a robust 
                                approval process 
                                for each 
                                project,         ? New 
                                allocates        capability from 
                                resource and     IT restructure. 
                                monitors 
                                progress. 
                                Project Managers ? Annual 
                                are in place     strategic plan 
                                within the       'refresh' to 
                                business to whom involve review 
                                projects can be  of progress to 
                                assigned and     date and pivot 
                                this has been    for COVID-19 
                                supplemented by  opportunities 
                                specialist       and threats. 
                                resource to 
                                boost 
                                capability. In 
                                effecting 
                                change, Halfords ? Focus on Free 
                                is requiring all Cash Flow to 
                                contributing     maintain 
                                colleagues to    sufficient 
                                observe the      capital for 
                                principles of    investment. 
                                Responsible, 
                                Accountable, 
                                Consulted and 
                                Informed 
                                ("RACI"). 
 
                                COVID-19 
 
                                In response to 
                                COVID-19 we have 
                                adapted the 
                                short-term 
                                strategic plan 
                                to focus on 
                                those activities 
                                that either 
                                respond to 
                                emerging 
                                customer trends, 
                                such as the 
                                significant 
                                shift to digital 
                                channels, or 
                                improve the 
                                long-term health 
                                of the business, 
                                such as 
                                colleague 
                                engagement and 
                                fixed cost 
                                reduction. This 
                                level of focus 
                                will ensure we 
                                utilise our 
                                resources on the 
                                most important 
                                programmes only 
                                in the year 
                                ahead, with the 
                                objective of 
                                further 
                                strengthening 
                                the business 
                                foundations 
                                before embarking 
                                on some of the 
                                more 
                                transformative, 
                                and capital 
                                intensive, 
                                aspects of the 
                                plan. 
Stakeholder      If we fail to  Progress against 
support and      secure and     our strategic 
confidence in    maintain our   objectives is 
strategy         stakeholders'  shared with      ? Series of 
                 (investors,    colleagues on a  conferences 
                 suppliers,     weekly and       relaying 
                 colleagues)    monthly basis    strategy to our 
(decrease)       support for    through team     colleagues and 
                 our strategy,  huddles and they suppliers. 
                 they may lose  also receive a 
                 confidence in  weekly blog from 
                 the business   the CEO and a 
                 and withdraw   monthly 
                 their          newsletter. 
                 resources.     Quarterly        ? Presentation 
                                updates with Q&A of accelerated 
                                are given by our services 
                                CEO, live        strategy to 
                                streamed to all  investment 
                                distribution     community 
                                centres, stores 
                                and autocentres. 
 
                                Throughout the   ? Colleagues 
                                year we engaged  and 
                                with our         shareholders. 
                                suppliers, 
                                keeping them 
                                informed of our 
                                strategic plans 
                                as key partners 
                                and listening to ? Revised 
                                their insights   internal 
                                and observations communications 
                                to enhance our   strategy. 
                                working 
                                relationship. 
 
                                We maintain      ? Replaced 
                                regular contact  financial PR 
                                with key         advisors. 
                                investors via a 
                                series of 
                                written 
                                communications, 
                                roadshows and 
                                regular          ? Launch new 
                                one-to-one       'Investment 
                                meetings.        Case' to the 
                                                 analyst and 
                                                 investor 
                                                 community. 
                                COVID-19 
 
                                The Board holds 
                                regular meetings ? Communicate 
                                with             to all 
                                shareholders and stakeholders 
                                their            our 'fast 
                                representatives. start' FY21 
                                Recent           investment 
                                discussions have plans and 
                                focused on the   guidance on the 
                                impact of        impact of 
                                COVID-19 on our  COVID-19. 
                                strategic 
                                ambitions and 
                                the 
                                opportunities 
                                and risks this 
                                creates for the 
                                Group in the 
                                short and 
                                long-term. 
Brand appeal and If we continue Our brand 
market share     to lose brand  purpose is to 
                 relevance, we  "Inspire and 
                 will be unable Support a        ? A new digital 
                 to maintain    Lifetime of      web platform 
(no change)      and grow our   motoring and     offering 
                 customer base  cycling". Our    seamless access 
                 and build      focus on         to the brands' 
                 market share.  ensuring         services and 
                                relevance is     products. 
                                centred around 
                                having a 
                                proposition that 
                                meets the needs 
                                and wants of our 
                                customers and    ? Enhancing our 
                                ensuring that    services 
                                they are aware   proposition and 
                                of our offer.    awareness with 
                                                 a greater 
                                                 emphasis on 
                                                 serving the 
                                During the year  growth in 
                                we enabled       electrification 
                                greater          . 
                                awareness of our 
                                Group 
                                proposition 
                                through the 
                                launch of our 
                                newly integrated ? Reaching new 
                                digital platform audiences 
                                providing        through our 
                                customers with   partnerships, 
                                seamless access  marketing 
                                to all our       activity and 
                                brands. Giving   channel 
                                customers        optimisation. 
                                improved 
                                accessibility to 
                                services that 
                                they may not 
                                previously have 
                                known we         ? Development 
                                provided was     of our customer 
                                further          strategy to 
                                supported by the adapt and 
                                flexibility      optimise the 
                                afforded by our  experience 
                                financial        across all 
                                services         touch points. 
                                offering through 
                                all channels. 
 
                                As the           ? Grow momentum 
                                pre-eminent      in our Group 
                                voice of the     services offer 
                                cycling and      and enhance our 
                                motor services   convenience 
                                sector, we have  with 
                                lobbied          improvements to 
                                Government on    our delivery 
                                expediting       proposition. 
                                E-scooter 
                                trials, 
                                expansion of the ? As we emerge 
                                Cycle-to-Work    from lockdown, 
                                scheme and more  continue our PR 
                                recently the     momentum and 
                                COVID-19 related social 
                                MOT extension.   engagement, 
                                We also take a   building an 
                                lead on product  industry voice 
                                innovation,      as a customer 
                                investing in new champion and 
                                E-mobility and   keeping the 
                                providing        nation moving. 
                                servicing for 
                                hybrid vehicles, 
                                serving the 
                                growth in 
                                electrification. 
 
                                We have 
                                significantly 
                                improved our 
                                social 
                                engagement this 
                                year, seen a 
                                greater mix of 
                                new customers as 
                                well as more 
                                female customers 
                                and a younger 
                                audience with 
                                our proposition 
                                enhancements and 
                                marketing 
                                investments. 
 
                                Our HME 
                                expansion has 
                                added strength 
                                to our 
                                convenience 
                                credentials as 
                                has our emerging 
                                built bikes to 
                                door initiative. 
 
                                COVID-19 
 
                                Status as an 
                                essential 
                                retailer is a 
                                responsibility 
                                we have taken 
                                seriously and 
                                one which our 
                                colleagues have 
                                embraced with 
                                pride. 
                                'Essential' 
                                status has 
                                allowed us to 
                                promote 
                                awareness of our 
                                services 
                                offering whilst 
                                serving the 
                                nation and key 
                                workers during 
                                the crisis. 
 
                                A GBP2 billion 
                                pound package 
                                provided by the 
                                Government as 
                                part of its 
                                cycling and 
                                walking 
                                investment 
                                strategy was 
                                announced in 
                                May. We 
                                anticipate high 
                                demand for the 
                                'fix your bike' 
                                voucher scheme, 
                                having 
                                experienced 
                                significant 
                                growth in our 
                                cycle repair 
                                business over 
                                the period. 
Value            Customers are  To differentiate 
Proposition      not persuaded  ourselves in a 
                 by our value   competitive 
                 proposition    retail market    ? Additional 
                 and we lose    our vision is to services 
(new)            market share   consolidate      capacity via 
                 to online      Halfords as a    the acquisition 
                 retailers and  super-specialist of McConechy's 
                 discounters.   in motoring and  and Tyres on 
                 Purely         cycling. Our     the Drive. 
                 competing on   strategy 
                 price leads to emphasises the 
                 a diminution   importance of 
                 of financial   creating value 
                 returns.       for the customer 
                                by delivering    ? Launched new 
                                services         service 
                                alongside the    offerings e.g. 
                                sale of a        WeCheck. 
                                product. 
 
                                During the year 
                                we grew our UK   ? Developed our 
                                services         Financial 
                                footprint with   Services 
                                the acquisition  offering across 
                                of McConechy's,  the Group. 
                                based in 
                                Scotland and the 
                                North of 
                                England. The UK 
                                market for 
                                motoring         ? Grow Halfords 
                                services is      Mobile Expert, 
                                fragmented with  increasing to 
                                no clear market  over 200 vans. 
                                leader. With the 
                                average age of 
                                UK cars          ? Develop our 
                                increasing, we   digital offer 
                                are well         via the 
                                positioned to    optimisation of 
                                become the UK's  the new Group 
                                leading          web platform 
                                independent      with a focus on 
                                provider of MOT  improving 
                                and servicing to convenience to 
                                motorists across customers. 
                                the country. 
 
                                During the year  ? Enhancing 
                                we also acquired solution 
                                the assets of    selling for key 
                                Tyres on the     product 
                                Drive to         categories 
                                significantly    alongside 
                                bolster our      momentum in 
                                mobile services  growing 
                                offering, which  service-related 
                                provides         sales. 
                                convenience and 
                                peace of mind to 
                                our customers, 
                                demonstrated by 
                                strong customer 
                                demand and high 
                                Trustpilot 
                                scores. 
 
                                With our Klarna 
                                partnership 
                                offering 
                                financial 
                                solutions across 
                                channels and for 
                                the Group, our 
                                products and 
                                services are 
                                more accessible 
                                for many 
                                customers. 
 
                                COVID-19 
 
                                Demand for our 
                                cycling range 
                                has been 
                                unprecedented 
                                throughout 
                                lockdown, during 
                                which time, as 
                                the UK's leading 
                                cycle retailer, 
                                we were able to 
                                demonstrate our 
                                role in enabling 
                                more people to 
                                ride more often. 
 
                                During the 
                                lockdown period 
                                there has been 
                                high demand for 
                                home delivery 
                                fulfilment, 
                                particularly 
                                bikes. We grew 
                                our bike to door 
                                initiative. We 
                                also launched 
                                'Payment 
                                online', 
                                providing full 
                                online 
                                functionality 
                                and ease of 
                                purchase for 
                                customers. 
Financial 
Brexit           Changes to     In January the   ? Delivery 
                 consumer       UK withdrawal    against our 
                 confidence,    agreement from   corporate 
                 the cost of    the EU received  strategy to 
(no change)      doing business Royal Assent,    strengthen our 
                 or             triggering a     appeal to 
                 the way in     transition       consumers and 
                 which we run   period that is   reduce our 
                 our operation  due to expire on exposure to 
                 as a result of 31 December      currency risk. 
                 Brexit results 2020. Throughout 
                 in materially  the year 
                 lower profits  preparations 
                 or             were maintained 
                 organisational for a no-deal    ? Explore 
                 strain.        scenario.        revised tariff 
                                                 and duty 
                                                 regulations to 
                                                 identify new 
                                We have a Brexit sourcing 
                                steering         opportunities. 
                                committee that 
                                evaluates the 
                                risk factors to 
                                the business in 
                                support of the 
                                Group's          ? Stock build, 
                                post-Brexit      where 
                                readiness.       appropriate, to 
                                Actions taken to mitigate 
                                date include:    short-term 
                                                 supply issues. 
 
                                · Authorised 
                                Economic 
                                Operator 
                                ("AEO") status   ? Ongoing 
                                secured in       monitoring of 
                                full, allowing   negotiations in 
                                lower friction   readiness for 
                                customs          change. 
                                procedures; 
 
                                · 
                                Comprehensive 
                                Customs 
                                Guarantee 
                                ("CCG") 
                                granted in 
                                conjunction 
                                with AEO 
                                allowing 
                                deferral of 
                                all VAT and 
                                Duty payments 
                                with 
                                a lower 
                                guarantee 
                                level; 
 
                                · an ongoing 
                                18-month 
                                hedging 
                                policy; 
 
                                · buffer 
                                stocks 
                                maintained 
                                within 
                                Halfords and 
                                with vendors 
                                to mitigate 
                                border delays; 
 
                                · lead times 
                                extended for 
                                European 
                                vendors; 
 
                                · support 
                                provided to 
                                our EU workers 
                                based 
                                in the UK. 
 
                                In the period to 
                                December, we 
                                will continue to 
                                work on our 
                                readiness and 
                                have identified 
                                areas of focus. 
                                Vendor 
                                negotiations are 
                                ongoing and 
                                terms changes 
                                are likely to be 
                                required as we 
                                move out of the 
                                transition 
                                period. We have 
                                modelled the 
                                costs our 
                                suppliers are 
                                likely to incur, 
                                enabling us to 
                                engage in 
                                constructive 
                                negotiations. 
 
                                Duty and other 
                                at the border 
                                costs related to 
                                administrative 
                                burden and time 
                                delays will 
                                affect all 
                                importers and 
                                exporters, 
                                resource and 
                                shift changes 
                                have been 
                                adopted to 
                                minimise any 
                                additional cost. 
                                Our Republic of 
                                Ireland stores 
                                will become an 
                                export and we 
                                anticipate 
                                border controls 
                                across the Irish 
                                Sea. To allow 
                                continued 
                                replenishment 
                                and returns for 
                                all Irish stores 
                                we have adapted 
                                our logistics 
                                processes. 
 
Sustainable      Changes in the A number of      ? Ongoing focus 
business model   UK economy     strategic        on building our 
                 (including     initiatives are  services 
                 consumer       well advanced to business, 
                 confidence and reduce our       leading to a 
(increase)       the value of   exposure to      more resilient 
                 the Pound)     changes in the   business and 
                 could          UK economy that  one less 
                 materially     adversely impact exposed to 
                 impact our     'business as     foreign 
                 revenue and /  usual' and the   exchange 
                 or costs, and  delivery of our  variation. 
                 therefore the  Strategy: 
                 profitability                   ? Customer 
                 of the                          propositions 
                 business.                       designed to 
                                                 secure revenue 
                                                 from existing 
                                ? procurement    customer base 
                 Unless we can  savings          (e.g. Financial 
                 reduce our     programmes in    Services, 
                 exposure to    place for direct Motoring and 
                 these economic and indirect     Cycling 
                 variables      costs;           Services, B2B). 
                 (e.g. our 
                 foreign 
                 exchange 
                 exposure) and 
                 improve our                     ? Strategic 
                 ability to     ? supply chain   sourcing 
                 move quickly   efficiencies     tie-ups (e.g. 
                 on fixed       under review     Mobivia). 
                 assets and     with 
                 property       opportunities 
                 costs, we will for strategic    ? Strategic 
                 not create a   sourcing         cost reduction 
                 sustainable    alliances;       programmes 
                 business                        targeting a 
                 model.                          reduction in 
                                                 property cost, 
                                                 supply chain 
                                                 and goods not 
                                ? developing     for resale 
                                opportunities to spend. 
                                lower warehouse 
                                and distribution 
                                costs; 
 
                                                 ? Planned 
                                                 improvements in 
                                                 cycling 
                                                 profitability. 
                                ? working 
                                capital 
                                reduction 
                                programme 
                                targeted at 
                                reducing stock   ? Working 
                                holding and      capital 
                                aligning trade   reduction via 
                                creditor terms;  strategic stock 
                                                 reduction 
                                                 programmes. 
 
                                ? a formal 
                                hedging 
                                programme has 
                                been extended to 
                                reduce foreign 
                                exchange risk; 
 
                                ? initiatives to 
                                drive revenue by 
                                extending our 
                                service offering 
                                to our existing 
                                customer base 
                                through 
                                financial 
                                services 
                                products 
                                and B2B; and 
 
                                ? continued 
                                evaluation of 
                                the impact of 
                                the UK's 
                                departure from 
                                the European 
                                Union 
                                and the impact 
                                on trade 
                                tariffs. 
 
                                COVID-19 
 
                                The occurrence 
                                of the pandemic, 
                                has elevated 
                                this risk and 
                                financial 
                                resilience has 
                                therefore, 
                                become central 
                                to our 
                                decision-making 
                                and will remain 
                                a key 
                                consideration 
                                into the 
                                foreseeable 
                                future. Early in 
                                the crisis we 
                                were able to 
                                access 
                                substantial 
                                liquidity by 
                                drawing down 
                                fully on our 
                                overdraft and 
                                Revolving Credit 
                                Facility. 
 
                                Recognition as 
                                an essential 
                                retailer has 
                                enabled us to 
                                trade well 
                                through the 
                                lockdown period, 
                                albeit at 
                                reduced levels. 
                                Postponing 
                                capital 
                                commitments, 
                                reducing our 
                                variable cost 
                                base and 
                                optimising our 
                                working capital 
                                position are 
                                some of the 
                                measures we have 
                                taken as we 
                                navigate through 
                                this period. 
Operational 
COVID-19         The viability  In response to   ? Continue to 
                 of the         COVID-19, the    build 
                 business is at Board took swift operational 
                 risk if we do  and decisive     resilience by 
(new)            not adapt our  action to        iterating the 
                 operations to  mitigate the     retail and 
                 safeguard our  potential        garage 
                 customers,     impact,          operating 
                 colleagues and including a      environments to 
                 wider          series of        ensure the 
                 community, as  operational and  ongoing safety 
                 well as taking financial        of our 
                 the necessary  measures to      colleagues and 
                 steps to       safeguard the    customers. 
                 minimise cost  business. 
                 and preserve                    ? Target a 
                 liquidity.                      gradual 
                                                 improvement in 
                                As a provider of sales volumes 
                                essential        and 
                                products and     profitability 
                                services to the  by successfully 
                                UK public, we    meeting the 
                                have remained    increased 
                                open during the  demand 
                                lockdown period. generated by 
                                We were able to  the changing 
                                keep open most   customer 
                                of our Retail    behaviour 
                                estate on a      coming out of 
                                'dark-store'     lockdown - 
                                basis, enabling  notably the 
                                us to serve      trend to more 
                                customers safely cycling 
                                from the front   journeys and a 
                                of the store,    likelihood of 
                                whilst also      more motorists 
                                ensuring our     on the road. 
                                colleagues could 
                                operate in safe 
                                working 
                                conditions. As 
                                lockdown         ? Target a 
                                restrictions     series of 'fast 
                                began to lift,   start' 
                                we enabled a     programmes to 
                                'Retail Lite'    aggressively 
                                programme to     take cost out 
                                gradually start  of the 
                                reopening stores business. 
                                to customers in 
                                accordance with 
                                social 
                                distancing 
                                requirements. We 
                                were able to     ? Continue to 
                                open over 300    stress test and 
                                garages across   reverse stress 
                                our Autocentres  test our 
                                and McConechy's  business model 
                                brands, and      to ensure 
                                operate all 77   access to 
                                mobile vans, a   sufficient 
                                services         liquidity. 
                                proposition that 
                                was particularly 
                                popular during 
                                lockdown. 
 
                                                 ? Perform a 
                                                 'lessons 
                                Proactive        learned' review 
                                measures have    of our COVID-19 
                                been applied to  response and 
                                obtain greater   renew our 
                                oversight and    business 
                                control of       continuity 
                                liquidity and    planning. 
                                cash management. 
                                We have 
                                negotiated terms 
                                with our 
                                commercial 
                                partners, 
                                reduced 
                                discretionary 
                                spend and paused 
                                capital 
                                investment. We 
                                have accessed 
                                Government 
                                support where 
                                available, such 
                                as the Job 
                                Retention Scheme 
                                and business 
                                rate relief. We 
                                have been in 
                                active dialogue 
                                with our 
                                existing lending 
                                syndicate to 
                                provide 
                                additional 
                                flexibility as 
                                required. 
 
                                An economic 
                                contraction is 
                                likely, 
                                impacting 
                                consumer 
                                confidence and 
                                discretionary 
                                income. Our 
                                financial 
                                services 
                                proposition has 
                                performed well 
                                and will be a 
                                valuable option 
                                for customers 
                                seeking to 
                                spread their 
                                costs. 
IT               Failure in our Extensive 
infrastructure   IT system(s)   controls are in 
failure          may cause      place to 
                 significant    maintain the     ? Introduction 
                 disruption     integrity of our of new Group 
                 to, or         systems and to   website hosted 
(no change)      prevention of, ensure that      through 
                 normal         systems changes  Salesforce. 
                 business-as-us are implemented 
                 ual            in a controlled 
                 activities.    manner. 
                                Halfords' key 
                                trading systems 
                                are hosted       ? Continue 
                                securely within  progression 
                                data centres     towards a fully 
                                operated by a    cloud-based 
                                specialist       hosting 
                                company and in   structure. 
                                specialist cloud 
                                services 
                                operated by 
                                Microsoft. These 
                                systems are 
                                supported by 
                                disaster 
                                recovery 
                                arrangements, 
                                including 
                                comprehensive 
                                backup and 
                                patching 
                                strategies. IT 
                                recovery 
                                processes are 
                                tested 
                                regularly. 
 
                                COVID-19 
 
                                Our cloud-based 
                                systems enabled 
                                minimal 
                                disruption as 
                                many of our 
                                colleagues 
                                transitioned to 
                                home working. 
                                Support from our 
                                service 
                                providers has 
                                ensured system 
                                stability for 
                                our remote 
                                workers. 
Skills shortage  We may be      We have a 
                 unable to      strategy that 
                 recruit,       relies on 
                 retain and     attracting and   ? Pathway 
(no change)      develop enough retaining        development 
                 people to have colleagues who   enabling young 
                 the different  can inspire and  talent to join 
                 mix of skills  support our      our business. 
                 that we need   customers and 
                 at all levels  encourage them 
                 across the     to build a 
                 business, in   lifetime 
                 the near and   relationship 
                 longer term.   with the brand.  ? Update 
                                                 recruitment 
                                                 collateral 
                                                 in-line with 
                                Our in-house     our new values 
                                resourcing team  and behaviours 
                                have developed a programme. 
                                recruitment 
                                website which 
                                highlights the 
                                importance of 
                                the Halfords 
                                behaviours and   ? Move more of 
                                details the      our eLearning 
                                skills and       training into 
                                experience       video learning. 
                                required of our 
                                colleagues. 
                                There are clear 
                                and detailed 
                                recruitment 
                                processes in     ? 
                                place which are  - 
                                reviewed 
                                regularly to 
                                respond to 
                                changes in the 
                                business. 
 
                                In our stores, 
                                our Gears 
                                training 
                                programme 
                                provides our 
                                colleagues with 
                                structured 
                                training taking 
                                them through 
                                their first 
                                18-24 months. We 
                                use our training 
                                programme to 
                                enhance skills, 
                                reinforce our 
                                behaviours, keep 
                                colleagues 
                                engaged and 
                                reach a 
                                competitive 
                                hourly rate of 
                                pay. 
 
                                We also review 
                                our skills mix 
                                frequently to 
                                ensure that all 
                                stores have the 
                                right skill 
                                levels to 
                                provide the 
                                services needed 
                                to satisfy our 
                                customer needs. 
                                The analysis 
                                from these 
                                exercises leads 
                                us to target 
                                specific skills 
                                needed as a 
                                priority to 
                                ensure we keep 
                                any skills gap 
                                minimal. Using 
                                an experienced 
                                internal 
                                training team, 
                                we then develop 
                                and deliver a 
                                targeted plan to 
                                increase skill 
                                levels in any 
                                identified 
                                areas. 
 
                                In our 
                                Autocentres, 
                                training is a 
                                fundamental part 
                                of our business 
                                and a great 
                                attraction tool 
                                for applicants. 
                                We support the 
                                training of 
                                colleagues 
                                ranging from our 
                                apprentices 
                                right through to 
                                a Level 3 
                                Technician. We 
                                provide in-house 
                                Hybrid and MOT 
                                tester courses 
                                ensuring that we 
                                can service the 
                                full car parc. 
                                We apply a 
                                targeted 
                                approach to 
                                further enhance 
                                skill levels for 
                                centres as we do 
                                with stores, by 
                                mapping 
                                against the 
                                optimal skills 
                                mix. 
 
                                COVID-19 
 
                                To support FY21 
                                requirements we 
                                translated some 
                                of our skills 
                                development 
                                material into 
                                Virtual 
                                Classroom 
                                content, 
                                allowing us to 
                                train colleagues 
                                whilst they 
                                remained in 
                                store. 
Colleague        Our employment Colleague 
engagement /     model may not  engagement is 
culture          be             vital to our 
                 sufficiently   success as a     ? Responsive 
                 attractive to  business.        action taken to 
                 recruit and    Engagement is a  address 
(no change)      retain the     metric in the    observations of 
                 talent that we Executive bonus  colleagues from 
                 need.          scheme and is    our engagement 
                                monitored by the survey. 
                                Board, under the 
                                direction of 
                                Helen Jones, the ? Continued 
                                Non-Executive    development of 
                                Director         the business 
                                responsible for  tools available 
                                Colleague Voice. to our 
                                                 colleagues, to 
                                                 improve their 
                                                 experience in 
                                An annual        the workplace. 
                                engagement 
                                survey, 
                                administered and 
                                analysed by a 
                                third party,     ? Significant 
                                provides us with increase in the 
                                reports at team  number of 
                                level. We create listening 
                                an environment   groups held 
                                which encourages across the 
                                colleagues to    business. 
                                feed back to us 
                                about how we can 
                                make Halfords an 
                                even better 
                                place to work 
                                and this is      ? Launch of our 
                                clearly          new colleague 
                                successful as    values and 
                                last year we had behaviours 
                                a survey         framework. 
                                response rate of 
                                93%. Our 
                                engagement index 
                                of 79% 
                                demonstrates 
                                that the         ? 
                                majority of our  Identification 
                                colleagues enjoy and development 
                                working at       of top talent 
                                Halfords.        to strengthen 
                                                 succession. 
 
                                The feedback 
                                received from 
                                colleagues 
                                through both our 
                                annual internal 
                                engagement 
                                survey, and the 
                                Sunday Times Top 
                                25 Large 
                                Employer surveys 
                                formed the basis 
                                of functional 
                                engagement plans 
                                across the 
                                business. 
                                Regular 
                                listening groups 
                                are held - with 
                                a total of 111 
                                across the Group 
                                as a whole. 
 
                                A full review of 
                                the culture of 
                                our business was 
                                undertaken 
                                during the year, 
                                resulting in the 
                                definition of a 
                                revised 
                                colleague values 
                                and behaviours 
                                framework. This 
                                framework was 
                                built with input 
                                from c1,300 of 
                                our colleagues 
                                from across the 
                                business and is 
                                due to be 
                                launched in 
                                2021. Further 
                                details can be 
                                found in the 
                                Corporate 
                                Governance 
                                Report on pages 
                                94 and 95. 
 
                                The 
                                identification 
                                and development 
                                of top talent, 
                                so strengthening 
                                succession was 
                                also a key 
                                focus. This will 
                                remain a focus 
                                throughout 2021 
                                and beyond. 
 
                                COVID-19 
 
                                A wellbeing 
                                newsletter was 
                                issued across 
                                the business on 
                                a weekly basis, 
                                ensuring 
                                colleague 
                                engagement has 
                                formed a key 
                                part of our 
                                response to the 
                                pandemic. 
Critical         Severe damage  Extensive 
physical         or failure of  research is 
infrastructure   physical       conducted into 
failure          infrastructure quality and      ? Refreshed our 
(including       may disrupt    ethics before    Business 
supply chain     our supply     the Group        Continuity 
disruption)      chain and / or procures         planning. 
                 business as    products from 
                 usual          any new country 
                 activities and or supplier. The 
(no change)      prevent the    Group's strong 
                 fulfilment of  management team 
                 customer       in the Far East  ? Continued 
                 orders.        blends           development of 
                                expatriate and   relationships 
                                local            with current 
                                colleagues. It   and potential 
                                understands the  new suppliers. 
                                local culture, 
                                market 
                                regulations and  ? Post COVID-19 
                                risks and we     lockdown, 
                                maintain very    immediate 
                                close            switch to home 
                                relationships    working for 
                                with both our    Support Centre 
                                suppliers and    colleagues, 
                                shippers to      supported by 
                                ensure that      enabling 
                                disruption to    technology. 
                                production and 
                                supply are       ? Adaptations 
                                managed          to critical 
                                appropriately.   work 
                                                 environments - 
                                                 e.g. 
                                                 Distribution 
                                We work with     Centres - to 
                                suppliers in     enable safe 
                                several          working 
                                territories to   conditions for 
                                reduce the risks colleagues. 
                                of disruption, 
                                and we monitor   ? Alternative 
                                sourcing         suppliers 
                                opportunities    identified to 
                                nearer to the    address 
                                UK.              potential 
                                                 disruption in 
                                                 the supply 
                                                 chain arising 
                                We maintain firm from the 
                                security and     ongoing 
                                protection       implications of 
                                measures at our  the pandemic. 
                                distribution 
                                centres. We have 
                                business 
                                continuity plans 
                                to manage any    ? Review our 
                                incidents that   Business 
                                may occur. Our   continuity 
                                logistics are    planning with 
                                overseen by an   lessons learned 
                                experienced,     following the 
                                dedicated        impact of 
                                warehouse and    COVID-19. 
                                logistics team 
                                who maintains 
                                contacts with a 
                                range of 
                                logistics 
                                businesses who 
                                could be 
                                utilised if 
                                necessary. As 
                                the conclusion 
                                of the Brexit 
                                transition 
                                period draws 
                                closer, we are 
                                continuing 
                                preparations for 
                                changes in the 
                                nature of the 
                                border between 
                                the UK and the 
                                Republic of 
                                Ireland. 
 
                                COVID-19 
 
                                We have worked 
                                exhaustively 
                                with our supply 
                                chain to respond 
                                to the unique 
                                challenges 
                                presented by the 
                                COVID-19 
                                pandemic. Since 
                                the virus was 
                                first reported 
                                in China, and 
                                during the 
                                current lockdown 
                                restrictions in 
                                the UK, we have 
                                maintained 
                                supply to our 
                                customers 
                                despite the 
                                constraints and 
                                significant 
                                demand for some 
                                of our product 
                                lines. 
Compliance 
Regulatory and   A failure to   We have a 
Compliance       adhere to our  compliance team 
                 legal and/or   with a wide 
                 regulatory     remit to set     ? Strengthened 
                 obligations    policy and       the central 
(no change)      for some or    verify that      compliance 
                 all of the     business         function to 
                 Group's        activities are   ensure focus on 
                 activities     compliant with   all relevant 
                 leads to an    legal and        activities. 
                 inability to   regulatory 
                 meet our       obligations. In 
                 responsibiliti the past year,   ? Increase 
                 es to          the Group has    colleague 
                 stakeholders   also established awareness and 
                 and/or the     a dedicated      understanding 
                 imposition of  Compliance       of personal 
                 financial      Committee with   responsibilitie 
                 penalties,     senior input and s via improved 
                 placing a      attendance from  visibility of 
                 strain on the  all areas of the Company 
                 business.      business to      policies and 
                                drive localised  development of 
                                ownership and    new training 
                                actions.         resources. 
 
                                The senior 
                                leadership team  ? Increase the 
                                communicates     number and 
                                tone from the    frequency of 
                                top to provide   onsite 
                                guidance to      compliance 
                                colleagues on    audits to 
                                all policy       assess 
                                commitments.     adherence to 
                                                 Company 
                                                 standards. 
 
                                Regular horizon 
                                scanning to 
                                capture new 
                                regulations and 
                                guidance.        ? Reinforce the 
                                                 need for a 
                                                 culture of 
                                                 compliance by 
                                COVID-19         default and 
                                                 design. 
 
                                We have adhered 
                                to the 2020 
                                Health 
                                Protection 
                                Regulations 
                                throughout the 
                                lockdown period, 
                                only opening our 
                                stores and 
                                autocentres when 
                                guidance was 
                                clear and we 
                                were satisfied 
                                it was safe. 
Service quality  The service we All our 
                 provide to     colleagues are 
                 customers may  provided with 
                 fail to meet   dedicated        ? Ongoing 
(no change)      regulatory /   training and     investment in 
                 safety         adhere to        training across 
                 requirements   established      Retail and 
                 resulting in   quality control  Autocentres. 
                 harm to        and safety 
                 customers and  procedures with 
                 / or legal /   compliance       ? Significant 
                 financial      audits by        investment in 
                 penalty.       management. We   garage 
                                also have a      technology, via 
                                dedicated        workflow and 
                                compliance team  self-audit 
                                monitoring our   capability, to 
                                Autocentre       support quality 
                                operations.      job completion. 
 
                                We provide 
                                centralised      ? Monitoring of 
                                training for our customer 
                                retail           satisfaction 
                                colleagues       through 
                                through our      detailed review 
                                Gears 1 and 2    analysis. 
                                programme to 
                                ensure they are 
                                consistently 
                                knowledgeable 
                                about our 
                                products and     ? Continued 
                                able to deliver  development of 
                                a quality        our colleagues 
                                service to our   and our estate 
                                customers.       to provide high 
                                Colleagues also  levels of 
                                complete an      customer 
                                annual           service. 
                                assessment of 
                                their 
                                understanding of 
                                our quality 
                                procedures. We 
                                have four 
                                equipped 
                                training 
                                academies 
                                delivering 
                                training for 
                                Autocentre 
                                technicians and 
                                the technician 
                                grading 
                                assessment is 
                                linked to 
                                quality of 
                                workmanship as 
                                well as skills 
                                and 
                                qualifications. 
 
                                Our products are 
                                risk assessed 
                                and rigorously 
                                tested for 
                                quality and 
                                safety by 
                                qualified 
                                engineers in our 
                                dedicated 
                                quality team. We 
                                monitor customer 
                                comments and 
                                complaints and, 
                                when necessary, 
                                we have 
                                established 
                                recall 
                                processes. 
 
                                We continue to 
                                invest in our 
                                estate, and this 
                                is enabling us 
                                to enhance our 
                                service offering 
                                to customers by 
                                evolving the 
                                layout of our 
                                stores in 
                                addition to 
                                further 
                                developments in 
                                IT 
                                infrastructure, 
                                training and 
                                online 
                                functionality. 
 
                                COVID-19 
 
                                Our evolving 
                                'Lite' model 
                                will apply to 
                                stores and 
                                autocentres for 
                                the foreseeable 
                                future, 
                                facilitating 
                                social 
                                distancing as we 
                                emerge 
                                from the 
                                COVID-19 
                                lockdown. 
 
                                We also enabled 
                                remote working 
                                for many of our 
                                colleagues not 
                                working in 
                                store, joining 
                                forces with our 
                                customer service 
                                team to respond 
                                to record levels 
                                of customer 
                                contact. 
 
Cyber security   If we fail to  Following on 
                 sufficiently   from a review of 
                 detect,        our IT Operating 
                 monitor, or    Model, we have a ? Process 
(no change)      respond to     Head of          reviews and 
                 cyber-attacks  Information      recommended 
                 against our    Security,        improvements to 
                 systems they   sitting on the   increase 
                 may result in  IT Leadership    overall 
                 disruption of  Group, to manage security 
                 service;       the IT security  posture. 
                 compromise of  framework and 
                 sensitive      ongoing 
                 data;          development and 
                 financial      review of our IT 
                 loss;          Security 
                 reputational   strategy and     ? Enhanced 
                 damage.        road map. Our IT involvement of 
                                Security         security at the 
                                partner, TCS,    start of 
                                have been        project 
                                successfully     development 
                                onboarded and    (security by 
                                provide valuable design). 
                                support by 
                                managing 
                                vulnerability 
                                scans and our 
                                email and 
                                website          ? Awareness 
                                security.        training 
                                                 delivered to 
                                                 all colleagues 
                                                 on information 
                                A perpetual      security and 
                                training         cyber security 
                                programme exists threats. 
                                for the benefit 
                                of our 
                                colleagues, 
                                raising 
                                awareness 
                                and promoting    ? Advanced 
                                good security    programme of 
                                hygiene.         penetration 
                                                 testing and 
                                                 vulnerability 
                                                 assessments. 
                                The Audit 
                                Committee is 
                                briefed by 
                                senior IT 
                                management on 
                                the business' IT ? Continued 
                                security         support and 
                                framework and    training for 
                                continues to     our colleagues 
                                closely monitor  to maintain 
                                this area.       good cyber 
                                                 hygiene 
 
                                COVID-19         ? Work towards 
                                                 fully managed 
                                                 Security 
                                                 Operations 
                                We maintained    Centre (SOC) on 
                                testing of our   target for 2021 
                                defences in      to increase 
                                anticipation of  visibility of 
                                a heightened     threat 
                                threat. A major  landscape. 
                                COVID-19 
                                ransomware 
                                attack was 
                                successfully 
                                blocked, 
                                applying 
                                intelligence 
                                obtained from 
                                various security 
                                threat 
                                advisories. 
 
Directors' Responsibilities 
 
The Annual Report and Accounts for the period ended 3 April 2020 contains 
the following statements regarding responsibility for the financial 
statements in compliance with DTR 4.1.12. Responsibility is for the full 
Annual Report and Accounts for the period ended 3 April 2020. 
 
Statement of Directors' Responsibilities in Respect of the Annual Report and 
the Financial Statements 
 
The Directors are responsible for preparing the annual report and the 
financial statements in accordance with applicable law and regulations. 
 
Company law requires the Directors to prepare financial statements for each 
financial year. Under that law they are required to prepare the Group 
financial statements in accordance with International Financial Reporting 
Standards ("IFRSs") as adopted by the European Union ("EU") and have elected 
to prepare the parent company financial statements in accordance with United 
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting 
Standards and applicable law). Under company law the Directors must not 
approve the financial statements unless they are satisfied that they give a 
true and fair view of the state of affairs of the group and company and of 
the profit or loss for the group for that period. 
 
In preparing these financial statements, the Directors are required to: 
 
· select suitable accounting policies and then apply them consistently; 
 
· make judgements and accounting estimates that are reasonable and 
prudent; 
 
· for the group financial statements, state whether they have been 
prepared in accordance with IFRSs as adopted by the European Union, 
subject to any material departures disclosed and explained in the 
financial statements; 
 
· for the parent Company financial statements, state whether applicable UK 
Accounting Standards have been followed, subject to any material 
departures disclosed and explained in the parent company financial 
statements; 
 
· prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the group and the parent company will 
continue in business; and 
 
· prepare a directors' report, a strategic report and a directors' 
remuneration report which comply with the requirements of the Companies 
Act 2006. 
 
The Directors are responsible for keeping adequate accounting records that 
are sufficient to show and explain the company's transactions and disclose 
with reasonable accuracy at any time the financial position of the company 
and enable them to ensure that the financial statements comply with the 
Companies Act 2006 and, as regards to the group financial statements, 
Article 4 of the IAS Regulation. They are also responsible for safeguarding 
the assets of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities. 
 
Website publication 
 
The Directors are responsible for ensuring the annual report and the 
financial statements are made available on a website. Financial statements 
are published on the company's website in accordance with legislation in the 
United Kingdom governing the preparation and dissemination of financial 
statements, which may vary from legislation in other jurisdictions. The 
maintenance and integrity of the company's website is the responsibility of 
the Directors. The Directors' responsibility also extends to the ongoing 
integrity of the financial statements contained therein. 
 
Directors Responsibilities Pursuant to DTR4 
 
The Directors confirm to the best of their knowledge: 
 
· the group financial statements have been prepared in accordance with the 
International Financial Reporting Standards ("IFRSs") as adopted by the 
European Union and Article 4 of the IAS Regulation and give a true and 
fair view of the assets, liabilities, financial position and profit and 
loss of the group. 
 
· the annual report includes a fair review of the development and 
performance of the business and the financial position of the group and 
the parent company, together with a description of the principal risks and 
uncertainties that they face. 
 
Approved by order of the Board. 
 
Keith Williams 
Chairman 
6 July 2020 
 
ISIN:           GB00B012TP20 
Category Code:  ACS 
TIDM:           HFD 
LEI Code:       54930086FKBWWJIOBI79 
OAM Categories: 1.1. Annual financial and audit reports 
Sequence No.:   79529 
EQS News ID:    1108531 
 
End of Announcement EQS News Service 
 
 
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