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Halfords Group Plc LSE:HFD London Ordinary Share GB00B012TP20 ORD 1P
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General Retailers 1,155.1 19.4 8.9 32.5 576

Interim Results: Financial Year 2021

18/11/2020 7:00am

UK Regulatory (RNS & others)


 
 Halfords Group PLC (HFD) 
Interim Results: Financial Year 2021 
 
18-Nov-2020 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
18 November 2020 
 
Halfords Group plc 
 
Interim Results: Financial Year 2021 
 
Strong financial results, underpinned by operational agility and strategic investments 
 
Further investment in electric vehicle servicing: by April, each of Halfords' garages 
will have at least one electric car technician, with electric bike and scooter 
servicers in every store 
 
Halfords Group plc ("Halfords" or the "Group"), the UK's leading provider of Motoring 
and Cycling products and services, today announces its interim results for the 26 weeks 
to 2 October 2020 ("the period"). 
 
Key highlights 
 
  · A very strong H1, with Group revenue growth of +9.6% and profit before tax of 
  GBP56.0m2. All product areas and businesses returned to growth towards the end of the 
  first half. 
 
  · Strong progress against our strategic priorities, including Group Services growth 
  of +16.6%, significant Cycling profitability improvements, Online sales growth of 
  +148%, and B2B growth of +37%. 
 
  · Recruitment programme underway to fill a wide range of service-oriented roles 
  across stores, Autocentres and Halfords Mobile Expert vans; also investing 
  significantly in training across motoring and cycling services. 
 
  · Investment in customer service saw key satisfaction metrics improve materially over 
  the course of H1, ending the first half ahead of last year. 
 
  · Launched over GBP4m of initiatives to support our colleagues in light of the 
  challenges arising from the pandemic, including a Frontline Colleague Scheme and 
  Halfords Here to Help Fund. 
 
  · Outlook for H2 remains uncertain given the seasonality of our business and the 
  ongoing impact of Covid-19. 
 
Graham Stapleton, Chief Executive Officer, commented: 
 
"We are very pleased to have achieved such a strong first half performance against the 
backdrop of one of the most challenging trading environments in recent history. It is a 
great testament to the strength and adaptability of our business, as well as to the 
professionalism, hard work and dedication of our colleagues. 
 
We have worked hard to capitalise on the cycling market tailwinds by sourcing more 
stock from existing and new suppliers, as well as launching new products and brands to 
serve the high level of demand for our cycling products and services. Despite the 
headwinds we have seen in motoring, with UK traffic 30% lower than pre-Covid-19 levels 
and the impact of the MOT deferment, our 'Road Ready' campaign and the investments we 
have made in our motoring services business have enabled us to increase market share 
and grow the business in Q2. 
 
As a sign of our confidence in the long-term prospects of our motoring business, and in 
order to meet the growing demand for our services in this area, we are in the process 
of recruiting to fill a wide range of service-oriented roles across our stores, 
Autocentres and fleet of Halfords Mobile Expert vans. We are also making a substantial 
investment in further training for existing colleagues, including in the rapidly 
growing area of electric vehicle servicing as we work to fill the skills gap that 
exists in the UK. We will be training 100 more electric car technicians next year, 
bringing the total to 470. In addition, we will be growing the number of e-bike and 
e-scooter servicers in our stores from 400 to over 1,800. This means that, by April, 
each of Halfords' garages will have at least one electric car technician, with electric 
bike and scooter servicers in every store. 
 
As an essential retailer and service provider, we are proud to be able to help keep the 
UK moving during these exceptionally challenging and uncertain times." 
 
Group financial summary 
 
              H1 FY21 H1 FY20  Change   Like-for-like 
               GBPm      GBPm              Revenue ("LFL") 
      Revenue  638.9   582.7   +9.6%        +6.7% 
       Retail  524.2   500.0   +4.8%        +8.1% 
  Autocentres  114.7   82.7    +38.7%       -2.0% 
 Gross Margin  49.4%   50.1%   -63bps 
       Retail  47.0%   47.0%   -1bps 
  Autocentres  60.6%   68.6%  -797bps 
   Underlying  76.9    44.9    +71.3% 
   EBITDA pre 
      IFRS-16 
   Underlying  56.0    25.9   +116.2% 
Profit Before 
Tax (PBT) pre 
      IFRS 16 
          Net  -0.6    -2.7 
Non-Underlyin 
     g Items, 
  pre-IFRS 16 
    Impact of   0.0     4.3 
      IFRS 16 
Profit Before  55.4    27.5   +101.5% 
   Tax, after 
    impact of 
      IFRS 16 
Underlying     23.0p   10.4p  +121.2% 
Basic 
Earnings per 
Share pre 
IFRS 16 
Underlying     23.0p   12.2p                +88.5% 
Basic 
Earnings per 
Share post 
IFRS 16 
 
1) Group LFL before adjusting for extended returns provision was +8.1% and Retail LFL 
was +9.9% 
 
2) Underlying profit before tax and before adjustments for IFRS16 
 
Financial highlights 
 
· Group revenue was +9.6% and +6.7%1 on a LFL basis. Growth accelerated quickly 
through Q1, before stabilising in Q2 at double-digit levels of LFL growth. 
 
· Underlying profit before tax2 ("PBT") of GBP56.0m, GBP30.1m above last year. PBT after 
adopting IFRS 16 and underlying items of GBP55.4m. 
 
· Gross margin of 49.4% was -63bps below last year, but in Q2 was +270bps above last 
year, reflecting cycling profitability improvements and a strengthening motoring 
services business. 
 
· Operating costs were GBP7.8m, 2.9% lower than last year. Efficiency programmes, 
business rates relief and furlough income were partly offset by the increased costs 
of trading under Covid-19, and the impact of our prior year acquisitions. 
 
· Liquidity remains strong, with net cash of GBP97.8m, GBP160.4m better than the same 
date last year reflecting the trading performance, lower cycling stock levels and 
strong cash management. 
 
· In Retail: 
 
· Revenue growth over H1 was +4.8% and +8.1% on a LFL basis. 
 
· Cycling revenue growth remained strong through H1, finishing +54.4% LFL, with all 
categories in growth, most notably e-mobility +184% and Cycle Services +24%. 
 
· Our performance cycling business, Tredz, performed very well, up +69% LFL and 
EBIT +GBP5.2m above last year, indicating strong retention of customers from Cycle 
Republic. 
 
· Motoring revenue growth was -23.7% LFL, but +3.1% in Q2 as we saw an improving 
trend as lockdown eased and journeys increased. 
 
· In Autocentres: 
 
· Total revenue growth including acquisitions was +38.7% for H1 with sales 
accelerating quickly from June. Exceptional demand for our Halfords Mobile Expert 
vans continues, with record levels of jobs. 
 
· A +78% year-on-year increase in hybrid cars seen through the garages and, 
similarly, a +10% increase in more premium brands serviced. 
 
Strategic highlights 
 
Although the pandemic has potentially driven some permanent changes in customer 
behaviour, our vision remains the same; to Inspire and Support a Lifetime of motoring 
and cycling. This will see Halfords evolve into a consumer and B2B services-focussed 
business, with a greater emphasis on motoring, generating higher and more sustainable 
financial returns. 
 
In our FY20 preliminary results on 7 July, we laid out our strategic priorities for 
FY21. Despite the ongoing disruption caused by the pandemic, we have made strong 
progress. Most notably during the first half, we have: 
 
· Continued to build and transform a market-leading Motoring Services offer, adding 
30 new Mobile Expert Vans, bringing the total to 105, integrating Tyres on the Drive 
into our Group Web Platform and implementing 'PACE', our digital operating model for 
garages, into all McConechy's outlets. 
 
· Further enhanced our Group web platform and digital customer experience with the 
launch of our WeCheck app, a digitally-led customer journey designed to encourage 
Group-wide cross-shop, the integration of McConechy's into our single Group website 
for bookings, and a series of enhancements to the customer journey online. 
 
· Delivered a significant improvement in Cycling profitability through better buying 
terms, component rationalisation and more effective promotions. We remain on track to 
deliver +300bps of gross margin improvement by year end. 
 
· Saved nearly GBP8m in underlying costs in the first half, with a specific focus on 
reducing operational cost through better procurement. Within the estate, 33 sites 
have closed (including 22 Cycle Republic stores), and we remain on track to exit up 
to 10% of our property estate (c.80 sites) during the full year, as announced in 
July. 
 
Encouraged by the progress we have made, and by our strong financial results in the 
first half, we plan to increase our strategic investment in the second half, setting us 
up well for FY22. 
 
Further detail on strategic progress is given in the Chief Executive's statement below. 
 
Recruitment and training 
 
Recruitment 
 
In line with our ongoing strategic focus on higher margin services across motoring, 
cycling, and B2B, we have a recruitment programme underway to fill a wide-range of 
service-oriented roles across stores, Autocentres and Halfords Mobile Expert vans. The 
new roles include specialist service-oriented roles across our stores, as well as a 
number of current vacancies in our Autocentres - mainly for MOT testers, but also 
managers, technicians, customer services and driver roles. We will also be recruiting 
new mobile roles to support our expanding Halfords Mobile Expert van fleet. 
 
Training and the electric skills gap 
 
 In addition, we will be investing GBP1.4m in training over 6,000 store colleagues in 
motoring and cycling services skills. This means that every single store colleague will 
be trained to carry out varying levels of bike and car checks and repairs, which will 
significantly improve our services capacity. The upskilling programme will result in 
our employee skills base more than doubling from 17,000 skills to 40,000. 
 
In our Autocentres, we are giving more of our T2 level technicians MOT-tester training 
in order to meet the current high level of demand. 
 
Halfords has been ahead of the curve since 2016 by training our colleagues for an 
electrified future. However, we estimate that the UK motor industry needs to double the 
number of EV technicians it is training each year to ensure the UK is able to service 
and repair the estimated 11 million electric vehicles that will be on the roads by 
2030. Without a significant increase in training the UK risks an electric skills gap. 
Halfords is playing its part by training 100 more technicians next year, bringing the 
total to 470. In addition, we will be growing the number of e-bike and e-scooter 
servicers from 400 to over 1,800. This means that, by April, each of Halfords' garages 
will have at least one electric car technician, with electric bike and scooter 
servicers in every store. 
 
Supporting our colleagues 
 
 During the period, we launched over GBP4m of initiatives to support our colleagues, all 
 of whom have worked tirelessly to help keep the country moving. These included a GBP1.5m 
Here to Help Fund for use by Halfords colleagues and their families who may be 
struggling financially as a result of the ongoing impact of Covid-19. In addition, the 
Group also set up a Frontline Colleague Support Fund to reward the extraordinary 
resilience, dedication and professionalism of our frontline colleagues during the 
hugely challenging lockdown period. The scheme ran for 12 weeks and ultimately reached 
 a total of GBP2.3m, which was then allocated across all eligible colleagues. 
 
Current trading 
 
Subsequent to the Government's announcement on 31 October 2020 that the country would 
be entering another period of lockdown, we have reviewed our operating procedures to 
ensure they are compliant with the new guidelines and protect the health and safety of 
our colleagues and customers. As an essential retailer and services provider, all of 
our sites will remain open in our current formats, whereby customers may enter our 
stores and garages but with limits on customer density. We will continue to ensure our 
colleagues are equipped with the right PPE to serve customers safely. 
 
Trading for the first five weeks of H2, to 5 November 2020, continued to be relatively 
strong, with good growth and increased market share in cycling, alongside resilience in 
our motoring products and services businesses. Since the 5th of November we have seen 
some impact on trading as the second national lockdown came into force. Cycling has 
continued to grow; we saw an immediate upturn in our Mobile Expert business; and we 
have seen another shift towards our digital and home delivery channels. However, sales 
of motoring products have been impacted, with Government data showing car traffic last 
week at 70% of pre-Covid-19 levels. Unlike the previous lockdown, we have been able to 
plan and mitigate against some of this risk early. 
 
Outlook 
 
We continue to have great confidence in the medium-term opportunity for our motoring 
products and services business as illustrated by the investment in recruitment and 
training that we are currently making in this area. We also believe that its resilient 
performance in H1 gives a clear indication of its potential once the pandemic has 
subsided. However, we remain cautious on the impact that national and local lockdowns 
may have on our H2 performance, with fewer vehicles likely to be on the road. 
 
In Cycling, we expect good levels of demand to continue, notwithstanding the normal 
seasonal decline as we enter the winter months of H2. 
 
Given the latest national lockdown announced by the Government and the inherent 
uncertainty in the current trading environment, including the outcome of Brexit 
negotiations, we do not believe it appropriate to provide profit guidance for FY21. We 
are well placed to address potential headwinds we may face and capitalise on tailwinds 
as they arise, and our balance sheet and liquidity position remain very strong. This 
gives us a solid platform to build on and we therefore remain confident in the future 
growth prospects for Halfords. 
 
We will next update the market on 14 January 2021, providing an update on trading 
during the peak festive season. 
 
Enquiries 
Investors & Analysts (Halfords) 
Loraine Woodhouse, Chief 
Financial Officer 
Neil Ferris, Corporate Finance              +44 (0) 7483 360 675 
Director 
 
                                      neil.ferris@halfords.co.uk 
Andy Lynch, Head of Investor                 +44 (0) 1527 513189 
Relations 
 
                                     andrew.lynch@halfords.co.uk 
 
Media (Powerscourt)                         +44 (0) 20 7250 1446 
Rob Greening                      halfords@powerscourt-group.com 
Lisa Kavanagh 
 
Results presentation 
 
A webcast for analysts and investors will be held today, starting at 9.00am UK time. 
Attendance is by invitation only. A copy of the presentation and a transcript of the 
call will be available at www.halfordscompany.com in due course. For further details 
please contact Powerscourt on the details above. 
 
Notes to Editors 
 
www.halfords.com www.halfordscompany.com [1] www.tredz.co.uk [2] 
 
Halfords is the UK's leading provider of motoring and cycling products and services. 
Customers shop at 440 Halfords stores, 3 Performance Cycling stores (trading as Tredz 
and Giant), 367 garages (trading as Halfords Autocentres and McConechy's) and have 
access to 105 mobile service vans (trading as Halfords Mobile Expert and Tyres on the 
Drive). Customers can also shop at halfords.com and tredz.co.uk for pick up at their 
local store or direct home delivery, as well as booking garage services online at 
halfords.com. 
 
Cautionary statement 
 
This report contains certain forward-looking statements with respect to the financial 
condition, results of operations, and businesses of Halfords Group plc. These 
statements and forecasts involve risk, uncertainty and assumptions because they relate 
to events and depend upon circumstances that will occur in the future. There are a 
number of factors that could cause actual results or developments to differ materially 
from those expressed or implied by these forward-looking statements. These 
forward-looking statements are made only as at the date of this announcement. Nothing 
in this announcement should be construed as a profit forecast. Except as required by 
law, Halfords Group plc has no obligation to update the forward-looking statements or 
to correct any inaccuracies therein 
 
Chief Executive's Statement 
 
Strategic update 
 
Although the pandemic has potentially changed customer behaviour permanently, our 
vision remains the same; to Inspire and Support a Lifetime of motoring and cycling. In 
November last year we set out our ambition to evolve into a consumer and B2B 
services-focussed business, with a greater emphasis on motoring, generating higher and 
more sustainable financial returns. 
 
In our preliminary results on 7 July, we laid out our strategic priorities for FY21. 
Despite the disruption felt across H1, we have made strong progress against our 
objectives: 
 
Continue to transform and build a market-leading Motoring Services offer 
 
· Added 30 new Mobile Expert Vans, bringing the total to 105, to serve the 
exceptional demand for this service. We remain on track to deliver over 125 vans by 
year-end. 
 
· The number of Mobile Expert Technicians increased to over 150, and the number of 
hubs increased from 8 to 10, allowing a broader geographical reach. 
 
· We have now fully integrated Tyres on the Drive to our Group web platform, meaning 
all services are now accessible from one website and benefiting from the high levels 
of retail web traffic. 
 
· Almost 100 garages now opening on Sundays to help meet elevated customer demand. 
 
· 'PACE', our digital operating model for garages, was implemented in all McConechy's 
garages by the end of Q2, enabling them to reap the customer and operational benefits 
of the system. 
 
Enhancing our Group web platform and digital customer experience, to create an even 
more differentiated and specialist proposition 
 
· Launched our WeCheck app, providing a digitally-led customer journey that 
strengthens our ability to drive cross shop across the Group. 
 
· McConechy's sites are now integrated on our single Group website, meaning that 
customers can book at all of the Group's 367 garage locations. 
 
· Introduced customer journey enhancements such as 'email me when back in stock' and 
'frequently bought with'. These developments ensured customers were engaged 
throughout their purchase and helped drive one additional item to 20% of baskets 
online, with an increase in conversion of +1ppts. 
 
Increase the profitability of our cycling business 
 
· Cycling profitability is on track to deliver +300bps of gross margin improvement on 
last year, driven by more favourable buying terms, component rationalisation and more 
effective promotions. 
 
· Although the high cycling sales have pushed average working capital levels below 
those considered optimal, we will end this year with purposefully lower underlying 
average inventories through range rationalisation and reduced lead times. 
 
Cost and Efficiency 
 
· Our underlying costs have been well controlled, reducing by nearly GBP8m, reflecting 
a continued focus on procurement and the execution of efficiency programmes such as 
'We Operate 4 Less'. 
 
· At our FY20 prelims in July we announced that we would close up to 10% of our 
property estate (c.80 sites) in FY21, including the 33 sites that have already closed 
(which includes 22 Cycle Republic stores). The review of our portfolio is on track 
and we will provide a further update later this financial year. 
 
Operational Review 
 
Despite the challenges presented by Covid-19, our business has performed strongly 
throughout the first half. Deemed an essential retailer, Halfords continued to trade 
through the early stages of lockdown, having to adapt quickly to almost instantaneous 
changes in customer behaviour, new social distancing rules and unprecedented shifts in 
product demand. A combination of our ongoing investment and our operational agility 
allowed us to capitalise on any potential tailwinds in the market. 
 
Retail 
 
 Our Retail business saw sales of GBP524.2m, +4.8% on the same period last year. This was 
a strong performance in the context of a hugely challenging backdrop, with 
unprecedented demand for our cycling products offsetting a decline in motoring products 
in Q1. 
 
Cycling 
 
Cycling sales were +44.6% above last year and +54.4% on a LFL basis, with all product 
categories in growth, notably e-mobility +184%. We identified early the unprecedented 
level of demand for our products and services and worked hard to secure more stock from 
existing suppliers, as well as sourcing new brands and products from new suppliers and 
different countries. We brought three new e-bike brands to Halfords and sourced new 
innertubes and pumps in under four weeks. In total we refreshed 54% of our own brand 
adult bikes during the first half. These included our new range of own brand Carrera 
bikes with many new and innovative features, including puncture protect tyres and 
memory foam saddles, coupled with technical advances such as new frame geometry and 
gearing. We also launched our new Boardman range including a limited-edition carbon 
 bike for GBP1,000 which clearly resonated with customers looking for performance and 
value, selling out in a matter of hours. As we closed Cycle Republic, Boardman bikes 
launched in Tredz for the first time, and the exceptional sales performance indicates 
high levels of retention in our performance cycling customers. 
 
Although stock has been limited at times, we have managed to keep a steady flow of 
bikes and accessories available to customers. With such a fluid stock position, we were 
able to utilise our new Group online platform and update customers throughout the 
period, increasing touchpoints and enhancing the overall customer journey. We emailed 
over 150k customers to let them know when stock was arriving, or products launching, to 
ensure that they received their chosen product as soon as possible. As a result, we 
attracted and retained more customers than ever, growing our market share though H1. 
 
Motoring 
 
Motoring sales saw a more challenging first half with sales -23.7% LFL . Again, the 
overall number hides widely varying performances across the product categories which 
continued through to the end of the half. During the initial lockdown, all product 
categories were significantly below last year with sales of less discretionary products 
performing better, albeit still materially below last year. As lockdown eased and car 
journeys increased, our unique fitting proposition drove strong demand for our 3Bs 
(batteries, blades and bulbs), growing +11.6% in Q2. Staycation products, such as roof 
bars and boxes, grew +28.6% over the same period as customers chose to holiday within 
the UK. Although car journeys remain below last year, we have seen more categories 
return to growth in Q2 including child seats and car maintenance. These have been aided 
by new range launches in each, including award winning car cleaning accessories, new 
hand tools, the launch of our own brand, i-Size child safety range, and our own brand 
silicon wiper blades. It is clear, however, that customers remain cautious over the 
longer term, with demand for big-ticket discretionary items continuing to be subdued. 
 
Retail Gross Margin 
 
Retail gross margin was 47.0%, in line with last year, which was a significant 
achievement given the change in mix we have seen between our motoring and cycling 
businesses. Q2 performed significantly ahead of this, +340bps above last year, with the 
mix effects continuing, but less extreme as demand for our motoring products and 
services improved. The overall result reflected progress towards our targeted increase 
in cycling profitability, driven by more favourable buying terms, component 
rationalisation and more effective promotions. 
 
Retail Operating Costs 
 
Retail operating costs were well managed and declined 9.5% year-on-year before the 
impact of IFRS-16 (Retail costs declined -8.8% post IFRS-16). Again, the overall number 
disguises significant movements beneath, including ongoing efficiency savings, business 
rates relief and furlough income, offset by increased costs of trading under Covid-19 
including our investments to support colleagues. Our procurement programme saved over 
GBP5m on an annualised basis as we targeted the underlying cost of business, in line with 
 our strategy. Business rates relief and furlough income totalled GBP24.5m, but these 
benefits were partially offset by increased costs of operating under Covid-19 which, to 
 date, amount to GBP11.4m in our retail business. This includes PPE, additional store 
 payroll, digital fulfilment costs and over GBP2.4m of initiatives launched to support 
colleagues including a Frontline Colleague Support Fund and the Here to Help Fund. 
 
Autocentres 
 
 Total revenue for Autocentres was GBP114.7m, +38.7% above last year, with our 
acquisitions of McConechy's and Tyres on the Drive contributing significantly. 
Underlying LFL sales were -2%, but as lockdown eased and customer journeys increased, 
the period from June saw a distinct improvement. LFL sales growth in Q2 was +16%, with 
total sales growth in excess of +60%. 
 
Against an uncertain and challenging backdrop, we launched a media campaign to drive 
awareness of our integrated motoring services offer, which drove a 40% uplift in 
consideration scores. We also leveraged our new Group web platform to attract Retail 
customers to our Autocentres offering, with car servicing having a prime location on 
our homepage. Finally, we reaped the customer and operational benefits of upgrading our 
digital operating model ('PACE') towards the end of FY20, rolling this out to our 
McConechy's garages in Q2. 
 
A notable highlight was the demand for our Halfords Mobile Expert proposition, which 
remained high throughout the period, with record job numbers and sales over the summer 
as the benefits of convenience and safety resonated with customers. We continued to 
invest in our Mobile Expert proposition, increasing the scale and geographic reach of 
this service. 
 
We saw emerging trends in the types of cars entering our garages, including a +10% 
increase in premium brands and +78% growth in hybrid cars. It's clear that our 
convenient proposition, value and trusted brand is attracting new customers to 
Autocentres, and our ability to invest in the training and technology required to 
service hybrid and electric cars, potentially prohibitive to smaller independent 
garages, will ensure we continue to capture this growing market. 
 
Group Services 
 
Group services revenue, which comprises fitting and repair services and the associated 
product, grew 16.6% over H1, accounting for 24% of Group revenue. Although the motoring 
services aspect to the offer was subdued during Q1, it quickly recovered in Q2, +43% 
year-on-year as customers prepared cars for a return to the road, supported by our 
premium WeCheck 'Road Ready' campaign. Cycling services performed ahead of this, +51.6% 
in Q2 and +22.3% over the half. Sales were boosted by our free 32-point bike check 
which attracted new customers to Halfords, and the government's Fix Your Bike Voucher 
Scheme, of which we have taken a market-leading share. Services remain core to our 
strategy, and we have continued to invest in this area, increasing scale and capacity 
whilst working hard to enhance the customer journey. 
 
Online 
 
The timing of the launch of our Group web platform coincided with the most significant 
shift in customer shopping habits we have ever seen. In the earlier periods of Q1, 
almost all customer journeys began online resulting in sales growth of over 200% in Q1 
and 148.2% over H1. Although the levels seen in Q1 have since moderated somewhat, 
Online continues to form a much larger part of Group sales and is of increasing 
importance as a touchpoint with customers. 
 
We have continued to invest in our platform over H1, focussed on optimising and 
enhancing the customer journey. Examples include 'email me when back in stock' to 
inform customers when stock arrived in our distribution centres, the ability to 
register interest when new products launched or 'frequently bought with' suggestions on 
popular products. These enhancements have resulted in additional items added to almost 
20% of baskets and conversion growing by +1%. We also enhanced customer self-service 
options in response to very high levels of online demand, such as order checking and 
chatbots. 
 
Towards the end of H1, our entire portfolio of services and products was accessible 
from one homepage. This meant the high volume of retail traffic had access to MOTs and 
services, bookable at all 367 Autocentres and McConechy's locations, or our fleet of 
105 Mobile Expert vans. 
 
B2B 
 
Our B2B business had a very strong H1, seeing growth of +37%, despite the challenging 
backdrop. B2B sales accounted for over 16% of group sales as we saw our C2W business 
grow over 70% and our Fleet business +160%. Both channels outperformed their respective 
core product categories, highlighting our success in this area. 
 
Graham Stapleton 
Chief Executive Officer, 17 November 2020 
 
Chief Financial Officer's Report 
 
Halfords Group plc ("the Group" or "Group") 
 
Reportable Segments 
 
Halfords Group operates through two reportable business segments: 
 
· Retail, operating in both the UK and Republic of Ireland; and 
 
· Autocentres, operating solely in the UK. 
 
All references to Retail represent the consolidation of the Halfords ("Halfords 
Retail") and Cycle Republic businesses, Boardman Bikes Limited and Boardman 
International Limited (together, "Boardman Bikes"), and Performance Cycling Limited 
(together, "Tredz and Wheelies") trading entities. All references to Group represent 
the consolidation of the Retail and Autocentres segments. 
 
The "H1 FY21" accounting period represents trading for the 26 weeks to 2 October 2020 
("the period"). The comparative period "H1 FY20" represents trading for the 26 weeks to 
27 September 2019 ("the prior period"). The impact of IFRS 16 is shown in the table 
below and further details of this impact are provided later within this report. 
 
Group Financial Results 
*********************** 
 
                              H1 FY21      H1 FY20       Change 
                               GBPm            GBPm            (%) 
Group Revenue                  638.9        582.7         +9.6% 
Group Gross Profit pre-IFRS    315.8        291.7         +8.3% 
16* 
 
Underlying EBIT pre-IFRS       59.0          27.1        +117.7% 
16* 
Underlying EBITDA pre-IFRS     76.9          44.9        +71.3% 
16* 
 
Net Finance Costs pre-IFRS     (3.0)        (1.2)        +150.0% 
16* 
 
Underlying Profit Before       56.0          25.9        +116.2% 
Tax pre-IFRS 16* 
Net non-underlying items       (0.6)        (2.7)        -77.8% 
Impact of IFRS 16               0.0          4.3            - 
Profit Before Tax              55.4          27.5        +101.5% 
Underlying Basic Earnings      23.0p        10.4p        +121.2% 
per Share pre-IFRS 16* 
Underlying Basic Earnings      23.0p    12.2p    +88.5% 
per Share post-IFRS 16* 
 
* This report includes Alternative Performance Measures (APMs) which we believe provide 
readers with important additional information on the Group. A glossary of terms and 
reconciliation to IFRS amounts is shown on page 19. 
 
Group revenue in H1 FY21, at GBP638.9m, was up 9.6% and comprised Retail revenue of 
GBP524.2m and Autocentres revenue of GBP114.7m. This compared to H1 FY20 Group revenue of 
GBP582.7m, which comprised Retail revenue of GBP500.0m and Autocentres revenue of GBP82.7m. 
Group gross profit at GBP315.8m (H1 FY20: GBP291.7m) represented 49.4% of Group revenue (H1 
FY20: 50.1%), reflecting a stable Retail gross margin of 47.0% and a decrease in the 
Autocentres gross margin of -797 bps to 60.6%. The latter was driven by the 
acquisitions of McConechy's and Tyres on the Drive, with both businesses more 
orientated to lower margin tyre sales. Despite the challenging backdrop, the underlying 
Autocentre gross margin was strong, +67bps ahead of last year. 
 
Total operating costs before non-underlying items and IFRS 16 were nearly 3% below last 
   year at GBP256.8m (H1 FY20: GBP264.6m) of which Retail comprised GBP190.1m (H1 FY20: 
   GBP210.0m), Autocentres GBP65.4m (H1 FY20: GBP53.5m) and unallocated costs GBP1.3m (H1 FY20: 
 GBP1.1m). Unallocated costs represent amortisation charges in respect of intangible 
assets acquired through business combinations, namely the acquisition of Autocentres in 
February 2010, Boardman Bikes in June 2014, Tredz and Wheelies in May 2016 and 
McConechy's in November 2019, which arise on consolidation of the Group. 
 
Group Underlying EBITDA pre-IFRS 16 increased 71.3% to GBP76.9m (H1 FY20: GBP44.9m), whilst 
  net finance costs pre-IFRS 16 were GBP3.0m (H1 FY20: GBP1.2m). 
 
 Underlying Profit Before Tax pre-IFRS 16 for the period was up 116.2% at GBP56.0m (H1 
 FY20: GBP25.9m). Non-underlying items of GBP0.6m in the period (H1 FY20: GBP2.7m) related to 
organisational restructure costs and closure costs. 
 
 After non-underlying items and including IFRS 16, Group Profit Before Tax was GBP55.4m 
 (H1 FY20: GBP27.5m). There was no net profit impact on the Group of IFRS 16 in the 
period. 
 
Retail 
 
                                 H1 FY21 H1 FY20 Change 
                                  GBPm      GBPm      (%) 
Revenue                           524.2   500.0  +4.8% 
Gross Profit                      246.3   235.0  +4.8% 
Gross Margin                      47.0%   47.0%  -1bps 
Operating Costs                  (190.1) (210.0) -9.5% 
Underlying EBIT pre-IFRS 16*      56.2    25.0   124.8% 
Non-underlying items              (0.3)   (2.5)  -88.0% 
Impact of IFRS 16                  4.2     8.9   -52.8% 
EBIT post-IFRS 16                 60.1    31.4   +91.4% 
Underlying EBITDA pre-IFRS 16*    69.8    38.9   +79.4% 
 
* This report includes Alternative Performance Measures (APMs) which we believe provide 
readers with important additional information on the Group. A glossary of terms and 
reconciliation to IFRS amounts is shown on page 19. 
 
 Revenue for the Retail business of GBP524.2m reflected, on a constant-currency basis, a 
like-for-like (LFL) sales increase of +8.1%. 
 
Please refer to the Retail Operational Review in the Chief Executive's Statement for 
further commentary on the trading performance in the period. Like-for-like revenues and 
total sales revenue mix for the Retail business are split by category below: 
 
          H1 FY21       H1 FY21             H1 FY20 
 
          LFL (%) Total sales mix (%) Total sales mix (%) 
Motoring   -23.7         42.5                57.5 
Cycling    +54.4         57.5                42.5 
Total      +8.1          100.0               100.0 
 
Gross profit for the Retail business at GBP246.3m (H1 FY20: GBP235.0m) represented 47.0% of 
sales, static on the prior year (H1 FY20: 47.0%). This reflected several factors 
including favourable buying terms, component rationalisation and more effective 
promotions within cycling. 
 
The table below shows the average exchange rate reflected in cost of sales, along with 
the year-on-year movement. 
 
                                   FY20 full year FY21 full year 
 
                                                   (estimated) 
 
                                         $              $ 
Average USD: GBP rate reflected in     $1.33          $1.29 
cost of sales 
Year-on-year movement in rate          $0.01         ($0.04) 
 
Retail operating costs before non-underlying items and IFRS 16 reduced by 9.5% to 
   GBP190.1m (H1 FY20: GBP210.0m, post IFRS 16 operating costs were GBP183.5m (H1 FY20: 
 GBP201.1m)). This reflected tight control of the underlying cost base as well as the 
benefit of Business rates relief and furlough income from the Government. This was 
partially offset by additional costs relating to PPE, additional colleagues and 
fulfilment costs. 
 
Autocentres 
 
                                  H1 FY21 H1 FY20  Change 
                                   GBPm      GBPm       (%) 
Revenue                            114.7   82.7    +38.7% 
Gross Profit                       69.5    56.7    +22.6% 
Gross Margin                       60.6%   68.6%  -797 bps 
Operating Costs                   (65.4)  (53.5)   +22.2% 
Underlying EBIT pre- IFRS 16*       4.1     3.2    +28.1% 
Non-underlying items               (0.3)   (0.2)   +50.0% 
Impact of IFRS 16                   0.6     0.8    -25.0% 
EBIT post- IFRS 16                  4.4     3.8    +15.8% 
Underlying EBITDA pre- IFRS 16*     7.1     6.0    +18.3% 
 
* This report includes Alternative Performance Measures (APMs) which we believe provide 
readers with important additional information on the Group. A glossary of terms and 
reconciliation to IFRS amounts is shown on page 19. 
 
Autocentres generated total revenues of GBP114.7m (H1 FY20: GBP82.7m), an increase of 38.7% 
on the prior period with a LFL decrease of 2.0%. 
 
The decrease in revenues from the existing centres reflected like-for-like declines in 
sales of standalone MOTs, brakes and tyres, offset by growths in combined service and 
MOTs, servicing and battery sales. 
 
Gross profit at GBP69.5m (H1 FY20: GBP56.7m) represented a gross margin of 60.6%; a 
decrease of 797 bps on the prior period, reflecting the prior year acquisitions, both 
of which are more heavily weighted towards lower margin tyre business. The underlying 
Autocentre gross margin was strong, reflecting the continued focus on the operating 
model via technology enabled efficiency programmes and growth in higher margin revenue 
streams. 
 
 Autocentres' Underlying EBITDA pre-IFRS 16 of GBP7.1m (H1 FY20: GBP6.0m), was 18.3% higher 
  than H1 FY20, and Underlying EBIT pre- IFRS 16 was GBP0.9m higher than H1 FY20 at GBP4.1m 
 (H1 FY20: GBP3.2m). 
 
Portfolio Management 
 
The Retail store portfolio at 2 October 2020 comprised 443 stores (end of H1 FY20: 474; 
end of FY20: 472). No new Autocentres were opened, and four were closed in the period, 
making the total number of Autocentre locations 367 as at 2 October 2020 (end of H1 
FY20: 317; end of FY20: 371).The following table outlines the changes in the Retail 
store portfolio over the 26-week period: 
 
                     Retail Centres Vans 
    Relocations        -       -     - 
Leases re-negotiated   5       -     - 
     Rightsized        -       -     - 
      Openings         -       -     30 
       Closed          29      4     - 
 
Net Non-Underlying items 
 
The following table outlines the components of the non-underlying items recognised in 
the period: 
 
                                                 H1 FY21 H1 FY20 
 
                                                  GBPm      GBPm 
Organisational restructure costs                   0.9     1.2 
Group-wide strategic review                         -      0.8 
Closure costs*                                    (0.5)     - 
Provision for expected settlement of an ongoing     -      0.7 
legal case 
Net non-underlying items                           0.4     2.7 
 
  *GBP0.2m relates to post-IFRS 16 costs, pre-IFRS 16 the balance is GBP0.6m. 
 
In the current and prior period separate and unrelated organisational restructuring 
activities were undertaken. 
 
Current period costs comprised: 
 
· Redundancy and transition costs of GBP0.9m relating to roles which have been 
outsourced or otherwise will not be replaced (H1 FY20: GBP0.6m) 
 
· In the prior period there were GBP0.6m of asset write-offs, principally resulting 
from the strategic decision to re-platform the Retail and Autocentres websites. 
 
During the current period Cycle Republic closure costs of GBP0.5m, which were provided 
for at year-end, were released. 
 
Costs of GBP0.8m were incurred in the prior period in relation to the costs of preparing 
and implementing the new Group strategy, which comprised the following: 
 
· GBP0.2m of external consultant costs 
 
· GBP0.6m of store labour costs, point of sale equipment and other associated costs in 
completing the cycling space relay across the store estate 
 
During the prior period a GBP0.7m provision was created for expected costs of settling an 
ongoing legal case which has since been settled at an amount below what was provided 
for with the remainder being released. The nature and expected size of the settlement 
is outside the normal experience of the Group. 
 
Finance Expense 
 
The net finance expense (before non-underlying items and IFRS 16) for the period was 
  higher year-on-year at GBP3.0m (H1 FY20: GBP1.2m) reflecting amortised costs associated 
with securing covenant amendments and CLBILS borrowing, alongside the cost of drawing 
down the full facility at the outset of the Covid-19 pandemic. 
 
Taxation 
 
The taxation charge on profit for the financial period was GBP10.4m (H1 FY20: GBP5.6m). The 
effective tax rate before non-underlying items of 18.9% (H1 FY20: 20.2%) differs from 
the UK corporation tax rate (19%) principally due to an increase in the tax rate due to 
non-deductible amortisation being offset by movements on deferred tax balances in the 
current and prior periods. 
 
The full year FY21 effective tax rate is expected to be c.19%. 
 
Earnings Per Share ("EPS") 
 
Underlying Basic EPS before IFRS 16 was 23.0 pence and after non-underlying items 22.8 
pence (H1 FY20: 10.4 pence, 9.3 pence after non-underlying items), a 121.2% and 145.2% 
increase on the prior period. Underlying Basic EPS post IFRS 16 was 23.0 pence and 
after non-underlying items 22.8 pence (H1 FY20: 11.1 pence after non-underlying items). 
Basic weighted-average shares in issue during the period were 197.0m (H1 FY20: 197.0m). 
 
Dividend ("DPS") 
 
The Board have not proposed an interim dividend in respect of the period to 2 October 
2020 (H1 FY20: 6.18 pence). 
 
Capital Expenditure 
 
Capital investment in the period totalled GBP11.2m (H1 FY20: GBP16.6m) comprising GBP10.0m in 
 Retail and GBP1.2m in Autocentres. 
 
  Within Retail, GBP1.7m (H1 FY20: GBP9.2m) was invested in stores, the majority of which 
related to LED lighting being installed across the whole Retail estate. The most 
 significant investment in Retail, however, reflected a GBP7.4m investment in IT systems, 
covering the ongoing development and enhancement of the new website. The balance of 
 GBP0.9m was invested in other smaller support centre upgrades/projects, and a small 
amount within Tredz & Wheelies. 
 
  The GBP1.2m (H1 FY20: GBP1.9m) capital expenditure in Autocentres principally related to 
the purchase of Halfords Mobile Expert vans and replacement of fixtures and fittings. 
 
 On a cash basis, total capital expenditure in the period was GBP11.9m (H1 FY20: GBP16.0m). 
 
Inventories 
 
  Group inventory held as at the period end was GBP146.0m (H1 FY20: GBP188.5m). Retail 
  inventory decreased to GBP140.8m (H1 FY20: GBP187.2m), reflecting the incredibly strong 
sales in Cycling, alongside continued working capital efficiencies. 
 
  Autocentres' inventory was GBP5.2m (H1 FY20: GBP1.3m). The Autocentres business model is 
such that only modest levels of inventory are held within the centres, with most parts 
being acquired on an as-needed basis. The increase from the prior year is due to the 
addition of McConechy's tyre inventory. 
 
Cashflow and Borrowings 
 
  Adjusted Operating Cash Flow during the period, was GBP186.0m (H1 FY20: GBP74.7m). After 
acquisitions, taxation, capital expenditure and net finance costs, Free Cash Flow of 
 GBP169.2m (H1 FY20: GBP44.2m*) was generated in the period. Group net cash on a comparable 
  basis was GBP97.8m (H1 FY19: net debt of GBP62.6m*), with the Net Debt: Underlying EBITDA 
ratio at -1.3:1. All these numbers are pre-IFRS 16. 
 
  Group net debt post-IFRS 16 was GBP271.6m (H1 FY20: GBP477.5m*). 
 
*after adjusting for post period end payment run 
 
Brexit and impact of movements in foreign currency exchange rates 
 
As we have previously explained, the decision of the UK to leave the European Union 
("Brexit") gives rise to significant uncertainty as a result of the impact on the wider 
UK economy. We have previously set out the main areas in which we considered Brexit was 
likely to impact the Group. We reaffirm and update our assessment of these below: 
 
· The Group is an AEO accredited business which helps smooth the imports process. 
However, work is ongoing with our customs and duty management partners to finalise 
the process for imports and exports to our Irish shops. 
 
· Impact on exchange rates. The Group buys a significant proportion of its goods in 
US dollars; between $250m and $300m a year. As previously guided, the majority of our 
US dollar sourcing is for cycling products. 
 
· Prolonged uncertainty over exit terms and continued weakness in Sterling could lead 
to a slowdown in the UK economy and consequent loss of consumer confidence, impacting 
trading conditions for the Group. However, Halfords has strong positions in 
fragmented Motoring and Cycling markets, and a service-led offer that differentiates 
us from our competitors, physical and online. Much of our sales are in needs-based 
categories that are more resilient to macroeconomic cycles and our discretionary 
categories, such as cycling, camping and travel solutions, could benefit from an 
increase in the number of people choosing to stay at home rather than holidaying 
abroad; a trend that we observed in 2009. 
 
Covid-19 and impact to Financial Statements 
 
We have great confidence in the medium-term opportunity for our motoring products and 
services business, but we remain cautious on the impact that national and local 
lockdowns may have on our near-term performance with fewer vehicles likely to be on the 
road. Regardless of what may lie ahead, Halfords' status as an essential retailer means 
we will continue to provide essential products and services to the UK, and we are well 
placed to address any headwinds or capitalise on tailwinds as they arise. We have 
proven our operational agility against the many challenges of H1, and our balance sheet 
and liquidity position remain strong. 
 
Principal Risks and Uncertainties 
 
The Board considers risk assessment, identification of mitigating actions and internal 
control to be fundamental to achieving Halfords' strategic corporate objectives. In the 
Annual Report & Accounts the Board sets out what it considers to be the principal 
commercial and financial risks to achieving the Group's objectives. The main areas of 
potential risk and uncertainty in the balance of the financial year are described in 
the Strategic Report on page 68 of the 2020 Annual Report and Accounts, and all are 
considered relevant to the H1 FY21 reporting. These include: 
 
· Business Strategy 
 
· Capability and capacity to effect significant levels of business change 
 
· Stakeholder support and confidence in strategy 
 
· Sustainable business model 
 
· Product, Service Quality and Brand Reputation 
 
· Brand appeal and market share 
 
· Service Quality 
 
· Critical physical infrastructure failure (including supply chain disruption) 
 
· Information Technology Systems and Infrastructure 
 
· Cyber and data security 
 
· IT Infrastructure failure 
 
· People 
 
· Skills shortage 
 
· Staff engagement / culture 
 
· Economic, Environmental and Political 
 
· Covid-19 
 
· Change in government policy or regulation 
 
· Brexit 
 
Specific risks associated with performance, alongside Covid-19, mentioned above, 
include Christmas trading as well as weather-sensitive sales, particularly within the 
Car Maintenance and Cycling categories in the Retail business. 
 
Loraine Woodhouse 
Chief Financial Officer, 17 November 2020 
 
Glossary of Alternative Performance Measures 
 
In the reporting of financial information, the Directors have adopted various 
Alternative Performance Measures ("APMs"). APMs should be considered in addition to 
IFRS measurements, of which some are shown on Page 1. The Directors believe that these 
APMs assist in providing useful information on the underlying performance of the Group, 
enhance the comparability of information between reporting periods, and are used 
internally by the Directors to measure the Group's performance, not necessarily 
comparable to other entities APMs. 
 
The key APMs that the Group focuses on are as follows. All numbers are shown pre-IFRS 
16 (on an IAS 17 basis) to enable comparability with the prior periods performance: 
 
1) Like-for-like ("LFL") sales represent revenues from stores, centres and websites 
that have been trading for at least a year (but excluding prior year sales of stores 
and centres closed during the year) at constant foreign exchange rates. 
 
2) Underlying EBIT equates to results from operating activities before non-underlying 
items, as shown in the Group Income Statement. Underlying EBITDA further removes 
depreciation and amortisation. 
 
3) Underlying Profit Before Tax is profit before income tax and non-underlying items 
as shown in the Group Income Statement. 
 
4) Underlying Earnings Per Share is profit after income tax before non-underlying 
items as shown in the Group Income Statement, divided by the number of shares in 
issue. 
 
5) Net Debt is current and non-current borrowings less cash and cash equivalents, 
both in-hand and at bank, as shown in the Consolidated Statement of Financial 
Position, as reconciled below: 
 
                           H1 FY21   H1 FY21  H1 FY20   H1 FY20 
 
                           Pre-IFRS Post-IFRS Pre-IFRS Post-IFRS 
                              16       16        16      16** 
 
                             GBPm       GBPm        GBPm       GBPm 
Cash and cash               109.6     109.6     20.5     20.5 
equivalents 
Borrowings -                (2.3)    (73.9)    (17.8)   (90.6) 
current 
Borrowings -                (9.5)    (307.3)   (35.3)   (377.4) 
non-current 
Net Debt                     97.8    (271.6)   (32.6)   (447.5) 
Post period end               -         -      (30.0)   (30.0) 
payment run* 
Comparable Net               97.8    (271.6)   (62.6)   (477.5) 
Debt 
 
*owing to the timing of the period end (27 September 2019) certain creditor and payroll 
payments related to September were not transacted until after the period close on 
Monday 30 September 2019 
 
**as restated see note 19 
 
6) Net Debt to Underlying EBITDA ratio is represented by the ratio of Net Debt to 
Underlying EBITDA (both of which are defined above). 
 
7) Adjusted Operating Cash Flow is defined as EBITDA plus share-based payment 
transactions and loss on disposal of property, plant and equipment, less working 
capital movements and movements in provisions (excluding post period end payment run 
adjustment), as reconciled below: 
 
                            H1 FY21   H1 FY21  H1 FY20   H1 FY20 
 
                            Pre-IFRS Post-IFRS Pre-IFRS Post-IFRS 
                               16       16        16       16 
 
                              GBPm       GBPm        GBPm       GBPm 
Underlying                    59.0     63.7      27.1     36.8 
EBIT 
Depreciation                  17.9     51.8      17.8     54.0 
and 
Amortisation 
Underlying                    76.9     115.5     44.9     90.8 
EBITDA 
Non-underlying operating     (0.6)     (0.4)    (2.7)     (2.7) 
expenses 
EBITDA                        76.3     115.1     42.2     88.1 
Share-based payment           1.6       1.6      1.1       1.1 
transactions 
Loss on disposal of           0.1       0.1      1.6       1.6 
property, plant & 
equipment 
Working capital movements     98.1               33.5 
(excluding post period 
end payment run 
adjustment - GBP30.0m H1 
FY20)                                  97.3               33.5 
Provisions movement &         9.9      17.1     (3.7)     (3.7) 
other 
Adjusted Operating Cash      186.0     231.2     74.7     120.6 
Flow 
 
8) Free Cash Flow is defined as Adjusted Operating Cash Flow (as defined above) less 
capital expenditure, net finance costs, taxation and exchange movements; as 
reconciled below: 
 
                           H1 FY21   H1 FY21  H1 FY20   H1 FY20 
 
                           Pre-IFRS Post-IFRS Pre-IFRS Post-IFRS 
                              16       16        16       16 
 
                             GBPm       GBPm        GBPm       GBPm 
Adjusted                    186.0     231.2     74.7     120.6 
Operatin 
g Cash 
Flow 
Capital                     (11.9)   (11.9)    (16.0)   (16.0) 
expenditure 
Net finance                 (2.8)     (7.7)    (1.0)     (1.0) 
costs 
Taxation                    (3.0)     (3.0)    (12.5)   (12.5) 
Exchange                     0.9       1.5     (1.0)     (1.0) 
movements 
Free Cash Flow              169.2     210.1     44.2     90.1 
 
Halfords Group plc 
 
Condensed consolidated income statement 
 
For the 26 weeks to 2 October 2020 
 
                           26 weeks to   26 weeks to 53 weeks to 
                             2 October  27 September     3 April 
                                  2020          2019        2020 
                             Unaudited     Unaudited 
                     Notes          GBPm            GBPm          GBPm 
 
Revenue                7         638.9         582.7     1,155.1 
Cost of sales                  (323.1)       (291.0)     (565.4) 
Gross profit                     315.8         291.7       589.7 
Operating expenses             (252.5)       (257.6)     (556.7) 
 
Operating profit                  63.7          36.8        67.2 
before 
non-underlying items 
Non-underlying         8         (0.4)         (2.7)      (34.2) 
operating 
expenditure 
 
Results from                      63.3          34.1        33.0 
operating activities 
 
Finance costs          9         (7.9)         (6.6)      (13.9) 
Finance income         9             -             -         0.3 
Net finance costs                (7.9)         (6.6)      (13.6) 
 
Profit before tax                 55.8          30.2        53.6 
and non-underlying 
items 
Non-underlying         8         (0.4)         (2.7)      (34.2) 
operating 
expenditure 
 
Profit before tax                 55.4          27.5        19.4 
 
Tax on underlying     10        (10.5)         (6.1)       (6.9) 
items 
Tax on                 8           0.1           0.5         5.0 
non-underlying items 
 
Profit for the                    45.0          21.9        17.5 
period attributable 
to equity 
shareholders 
 
Earnings per share 
Basic earnings per    13         22.8p         11.1p        8.9p 
share 
Diluted earnings per  13         22.4p         11.1p        8.7p 
share 
Basic underlying      13         23.0p         12.2p       23.7p 
earnings per share 
Diluted underlying    13         22.6p         12.2p       23.3p 
earnings per share 
 
No final dividend was made for the 53 weeks to 3 April 2020 (2019: 12.39 pence per 
share). The directors have not proposed an interim dividend in respect of the 26 weeks 
to 2 October 2020 (2019: 6.18 pence per share). 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
Halfords Group plc 
 
Condensed consolidated statement of comprehensive income 
 
For the 26 weeks to 2 October 2020 
 
                           26 weeks to   26 weeks to 53 weeks to 
                             2 October  27 September     3 April 
                                  2020          2019        2020 
 
                             Unaudited     Unaudited 
                                    GBPm            GBPm          GBPm 
 
Profit for the period             45.0          21.9        17.5 
 
Other comprehensive income 
Cash flow hedges: fair           (3.8)           4.7         7.9 
value changes in the 
period 
Income tax on other                0.8             -       (0.7) 
comprehensive income 
Other comprehensive income       (3.0)           4.7         7.2 
for the period, 
 
net of tax 
 
Total comprehensive income        42.0          26.6        24.7 
for the period 
 
attributable to equity 
shareholders 
 
All items within the Consolidated Statement of Comprehensive Income are classified as 
items that are or may be recycled to the consolidated income statement 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
                       Halfords Group plc 
 
     Condensed consolidated statement of financial position 
 
                      As at 2 October 2020 
                                   As at        As at      As at 
                               2 October 
 
                                         27 September    3 April 
                                    2020         2019       2020 
                               Unaudited    Unaudited 
                    Notes             GBPm           GBPm         GBPm 
Assets 
Non-current 
assets 
Intangible assets     14           393.4        386.1      395.7 
Property, plant       14            79.1         89.7       83.1 
and equipment 
Right-of-use          14           319.2        370.0      349.9 
assets 
Deferred tax                         8.0          8.5        7.3 
asset* 
Total non-current                  799.7        854.3      836.0 
assets 
Current assets 
Inventories                        146.0        188.5      173.0 
Trade and other                     62.5         48.8       53.5 
receivables 
Derivative                           2.0          6.9        8.7 
financial 
instruments 
Current tax                            -          1.8        8.2 
assets 
Cash and cash         15           109.6         20.5      115.5 
equivalents 
Total current                      320.1        266.5      358.9 
assets 
Total assets                     1,119.8      1,120.8    1,194.9 
Liabilities 
Current 
liabilities 
Borrowings            15           (0.2)       (16.3)      (0.2) 
Derivative                         (1.4)        (0.9)      (1.1) 
financial 
instruments 
Lease                             (73.7)       (74.3)     (83.2) 
liabilities* 
Trade and other                  (295.5)      (251.6)    (217.0) 
payables 
Current tax                        (0.1)            -          - 
liabilities 
Provisions                        (22.5)        (7.8)      (9.7) 
Total current                    (393.4)      (350.9)    (311.2) 
liabilities 
Net current                       (73.3)       (84.4)       47.7 
liabilities/asset 
s 
Non-current 
liabilities 
Borrowings            15           (2.2)       (26.9)    (179.1) 
Lease liabilities                (305.1)      (350.5)    (332.8) 
Trade and other                    (2.3)        (3.6)      (1.9) 
payables 
Provisions                         (8.4)        (4.4)      (4.1) 
Total non-current                (318.0)      (385.4)    (517.9) 
liabilities 
Total liabilities                (711.4)      (736.3)    (829.1) 
Net assets                         408.4        384.5      365.8 
Shareholders' 
equity 
Share capital         16             2.0          2.0        2.0 
Share premium         16           151.0        151.0      151.0 
account 
Investment in own                 (10.0)       (10.0)     (10.0) 
shares 
Other reserves                       1.6          3.6        4.9 
Retained earnings                  263.8        237.9      217.9 
Total equity                       408.4        384.5      365.8 
attributable to 
equity holders of 
the Company 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
* Adjustment to the lease liability reported in the September 2019 interim results. See 
note 19. 
 
Halfords Group plc 
 
Condensed consolidated statement of changes in equity 
 
For the 26 weeks to 2 October 2020 
 
For the period ended 2 October 2020 (Unaudited) 
 
                              Attributable to the equity holders of the 
                                               Company 
                                          Other reserves 
 
                     Share   Investment  Capital 
             Share   premium     in own redemption Hedging Retained  Total 
                                           reserve reserve 
 
           capital   account     shares                    earnings equity 
                GBPm        GBPm         GBPm         GBPm      GBPm       GBPm           GBPm 
Closing        2.0     151.0     (10.0)        0.3     4.6    217.9        365.8 
balance 
at 3 
April 
2020 
 
Total 
comprehensiv 
e income for 
the period 
Profit for       -         -          -          -       -     45.0         45.0 
the period 
 
Other 
comprehensiv 
e income 
Cash flow        -         -          -          -   (3.8)        -        (3.8) 
hedges: fair 
value 
changes in 
the period 
Income tax       -         -          -          -     0.8        -          0.8 
on other 
comprehensiv 
e income 
Total other      -         -          -          -   (3.0)        -        (3.0) 
comprehensiv 
e income for 
the period 
net of tax 
Total            -         -          -          -   (3.0)     45.0         42.0 
comprehensiv 
e income for 
the period 
Other            -         -          -          -       -    (0.7)  (0.7) 
Hedging          -         -          -          -   (0.3)        -        (0.3) 
gains and 
losses and 
costs of 
hedging 
transferred 
to the cost 
of inventory 
 
Transactions 
with owners 
Share-based      -         -          -          -       -      1.6          1.6 
payment 
transactions 
Total            -         -          -          -       -      1.6          1.6 
transactions 
with owners 
Balance at 2   2.0     151.0     (10.0)        0.3     1.3    263.8        408.4 
October 2020 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
Halfords Group plc 
 
Condensed consolidated statement of changes in equity (continued) 
 
For the 26 weeks to 2 October 2020 
 
For the period ended 27 September 2019 (Unaudited) 
 
                              Attributable to the equity holders of the 
                                               Company 
                                          Other reserves 
 
                       Share   Investment  Capital 
               Share   premium     in own redemption   Hedging Retained   Total 
                                             reserve 
 
             capital   account     shares              reserve earnings  equity 
                  GBPm        GBPm         GBPm         GBPm        GBPm       GBPm      GBPm 
Closing          2.0     151.0     (10.0)        0.3       1.6    264.4   409.3 
balance at 
29 March 
2019 
Adjustment         -         -          -          -         -   (27.0)  (27.0) 
on initial 
application 
of IFRS 16* 
Opening          2.0     151.0     (10.0)        0.3       1.6    237.4   382.3 
balance at 
30 March 
2019 (as 
previously 
stated) 
Prior period       -         -          -          -         -      1.9     1.9 
opening 
lease 
liability 
adjustment** 
Opening          2.0     151.0     (10.0)        0.3       1.6    239.3   384.2 
balance at 
30 March 
2019 (as 
re-stated) 
 
Total 
comprehensiv 
e income for 
the period 
Profit for         -         -          -          -         -     21.9    21.9 
the period 
 
Other 
comprehensiv 
e income 
Cash flow          -         -          -          -       4.7        -     4.7 
hedges: fair 
value 
changes in 
the period 
Total other        -         -          -          -       4.7        -     4.7 
comprehensiv 
e income for 
the period 
net of tax 
Total              -         -          -          -       4.7     21.9    26.6 
comprehensiv 
e income for 
the period 
Hedging            -         -          -          -     (3.0)        -   (3.0) 
gains and 
losses and 
costs of 
hedging 
transferred 
to the cost 
of inventory 
 
Transactions 
with owners 
Share              -         -          -          -         -        -       - 
options 
exercised 
Share-based        -         -          -          -         -      1.1     1.1 
payment 
transactions 
Dividends to       -         -          -          -         -   (24.4)  (24.4) 
equity 
holders 
Total              -         -          -          -         -   (23.3)  (23.3) 
transactions 
with owners 
Balance at       2.0     151.0     (10.0)        0.3       3.3    237.9   384.5 
27 September 
2019 
 
*The Group initially applied IFRS 16 at 30 March 2019, using the modified retrospective 
approach. Under this approach, comparative information was not restated and the 
cumulative effect of applying IFRS 16 was recognised in Retained earnings at the date 
of initial application. 
 
**Adjustment to the lease liability reported in the September 2019 interim results. See 
note 19. 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
Halfords Group plc 
 
Condensed consolidated statement of cash flows 
For the 26 weeks to 2 October 2020 
 
                            26 weeks to  26 weeks to 53 weeks to 
                              2 October 27 September     3 April 
                                   2020         2019        2020 
                              Unaudited    Unaudited 
                      Notes          GBPm           GBPm          GBPm 
Cash flows from 
operating activities 
Profit after tax for               45.3         24.1        46.7 
the period before 
non-underlying items 
Non-underlying items    8         (0.3)        (2.2)      (29.2) 
Profit after tax for               45.0         21.9        17.5 
the period 
Depreciation -                     10.7         11.9        24.3 
property, plant and 
equipment 
Impairment -                          -            -         5.4 
property, plant and 
equipment 
Amortisation of                    34.6         36.2        83.0 
right-of-use assets 
Amortisation -                      6.5          5.9        11.4 
intangible assets 
Net finance costs                   7.9          6.6        13.6 
Loss on disposal of                 0.1          1.6         2.8 
property, plant and 
equipment and 
intangibles 
Equity-settled                      1.6          1.1         1.0 
share-based payment 
transactions 
Exchange movement                   1.5        (1.0)       (2.0) 
Income tax expense                 10.4          5.6         1.9 
 
Decrease/(increase)                27.0       (14.8)         3.9 
in inventories 
(Increase)/decrease               (9.0)         10.3       (1.0) 
in trade and other 
receivables* 
Increase in trade and              79.3         50.2        35.4 
other payables* 
Increase/(decrease)                17.1        (2.3)       (0.7) 
in provisions* 
 
Corporation tax paid              (3.0)       (12.5)      (16.3) 
Net cash from                     229.7        120.7       180.2 
operating activities 
 
Cash flows from 
investing activities 
Acquisition of                        -            -      (10.9) 
subsidiary, net of 
cash acquired 
Purchase of                       (4.3)        (4.8)      (12.5) 
intangible assets 
Purchase of property,             (7.6)       (11.2)      (21.1) 
plant and equipment 
Net cash used in                 (11.9)       (16.0)      (44.5) 
investing activities 
 
Cash flows from 
financing activities 
Finance income                        -            -         0.3 
received 
Finance costs paid                (7.7)        (6.4)      (13.5) 
Payment of loan                       -            -       (1.8) 
following acquisition 
Proceeds from loans,                3.0        446.0     1,377.0 
net of transaction 
costs 
Repayment of                    (180.0)      (483.0)   (1,262.0) 
borrowings 
Payment of capital               (39.0)       (25.3)      (76.4) 
element of leases* 
Dividends paid         12             -       (24.4)      (36.6) 
Net cash used in                (223.7)       (93.1)      (13.0) 
financing activities 
 
Net                    15         (5.9)         11.6       122.7 
(decrease)/increase 
in cash and bank 
overdrafts 
Cash and cash          15         115.3        (7.4)       (7.4) 
equivalents at the 
beginning of the 
period 
Cash and cash          15         109.4          4.2       115.3 
equivalents at the 
end of the period 
 
The notes on pages 26 to 37 are an integral part of these condensed consolidated 
interim financial statements. 
 
*Adjustment to reported April 2020 full year results. See note 19. 
 
Halfords Group plc 
 
Notes to the condensed consolidated interim financial statements 
For the 26 weeks to 2 October 2020 
 
1) General information 
 
The condensed consolidated interim financial statements of Halfords Group plc (the 
"Company") comprise the Company together with its subsidiary undertakings (the 
"Group"). 
 
The Company is a limited liability company incorporated, domiciled and registered in 
England and Wales. Its registered office is Icknield Street Drive, Washford West, 
Redditch, Worcestershire, B98 0DE. 
 
The Company is listed on the London Stock Exchange. 
 
These condensed consolidated interim financial statements were approved by the Board of 
Directors on 17 November 2020. 
 
2) Statement of compliance 
 
These condensed consolidated interim financial statements for the 26 weeks to 2 October 
2020 have been prepared in accordance with IAS 34 'Interim financial reporting' as 
endorsed by the European Union. They do not include all of the information required for 
full annual financial statements and should be read in conjunction with the 2020 Annual 
Report and Accounts, which have been prepared in accordance with IFRSs as adopted by 
the European Union. 
 
The comparative figures for the financial period ended 3 April 2020 are not the Group's 
statutory accounts for that financial period. Those accounts have been reported on by 
the Group's auditors and delivered to the registrar of companies. The report of the 
auditor was (i) unqualified, (ii) did not include a reference to any matters to which 
the auditor drew attention by way of emphasis without qualifying their report, and 
(iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 
2006. 
 
3) Risks and uncertainties 
 
The Directors consider that the principal risks and uncertainties which could have a 
material impact on the Group's performance in the remaining 26 weeks of the financial 
year remain the same as those stated on pages 66 to 78 of our Annual Report and 
Accounts for the 53 weeks to 3 April 2020, which are available on our website 
www.halfordscompany.com. These are also detailed in the CFO report on page 17. 
 
4) Significant accounting policies 
 
Going Concern 
 
In light of the current economic uncertainty caused by the Covid-19 pandemic, the 
directors have reviewed the current financial performance and liquidity of the business 
and assessed its resilience through a series of scenarios. Further details of the 
assessment are provided on pages 66 to 79 of our Annual Report and Accounts for the 53 
weeks to 3 April 2020, which are available on our website www.halfordscompany.com. The 
directors have further reviewed these scenarios against the current performance of the 
business during H1 by updating the model for actual trading, which shows Halfords have 
outperformed against original scenarios. 
 
Having reviewed current performance and forecasts, the Directors consider that the 
Group has adequate resources to remain in operation for the foreseeable future and have 
therefore continued to adopt the going concern basis in preparing the condensed 
consolidated interim financial statements. The Group's forecasts and projections, 
taking into account reasonably possible changes in trading performance, show that the 
Group has adequate resources to continue in operational existence for a period of at 
least 12 months from the date of approval of these financial statements. 
 
In light of the latest lockdown announced by the government, Halfords have considered 
the effect on the viability model scenarios. The model anticipated uncertainty and this 
was built into the impact within the H2 forecast. Therefore, Halfords do not expect any 
material changes to this forecast as a result of the lockdown. Halfords are keeping a 
close eye on trading against forecast in this period and have no material concerns at 
present. 
 
Accounting Policies 
 
As required by the Disclosure and Transparency Rules of the Financial Conduct 
Authority, the condensed consolidated interim financial statements have been prepared 
by applying the accounting policies and presentation that were applied in the 
preparation of the 2020 Annual Reports and Accounts, which are published on the 
Halfords Group website, www.halfordscompany.com [1]. The changes to accounting policies 
outlined below are also expected to be reflected in the Group's consolidated financial 
statements as at and for the year ending 2 April 2021. 
 
The accounting policies adopted in the preparation of the interim financial statements 
are the same as those set out in the Group's annual financial statements for the 53 
weeks ended 3 April 2020 except for the new policy to account for rates relief and 
furlough income received under the Government's Coronavirus Job Retention Scheme as set 
out below. 
 
Government Support 
 
Support payments are recognised only when there is reasonable assurance that the Group 
will comply with the conditions attached to them and that the monies will be received. 
 
Support payments receivable as compensation for expenses already incurred are 
recognised in profit or loss within operating costs, in the period in which they become 
 receivable. During the period support and other payments received equated to GBP32.6m in 
relation to business rates relief, furlough support and related salary savings. 
 
5) Estimates and judgements 
 
In preparing these condensed consolidated interim financial statements the directors 
have given specific consideration to events including the impact of the Covid-19 
pandemic. The significant judgements made by management in applying the Group's 
accounting policies and the key sources of estimation uncertainty were the same as 
those applied to the consolidated financial statements as at and for the 53 week period 
ended 3 April 2020 and the 26 weeks ended 27 September 2019, apart from the estimate 
for the sales returns provision which has been updated to reflect the extension of the 
returns period from 30 days to 90 days in light of Covid-19 restrictions. The provision 
uses the average returns rate against 100% of sales for first 30 days, 75% for 30-60 
days and 50% for 60-90 days. 
 
6) Operating segments 
 
The Group has two reportable segments, Retail and Car Servicing, which are the Group's 
strategic business units. Car Servicing became a reporting segment of the Group as a 
result of the acquisition of Nationwide Autocentres on 17 February 2010. McConechy's 
was acquired during H2 FY20 and this has been incorporated into the Car Servicing 
reporting segment. The strategic business units offer different products and services, 
and are managed separately because they require different operational, technological 
and marketing strategies. 
 
The operations of the Retail reporting segment comprise the retailing of automotive, 
leisure and cycling products through retail stores and online platforms. The operations 
of the Car Servicing reporting segment comprise car servicing and repair performed from 
Autocentres. 
 
The Chief Operating Decision Maker is the Executive Directors. Internal management 
reports for each of the segments are reviewed by the Executive Directors on a monthly 
basis. Key measures used to evaluate performance are Revenue and Operating Profit. 
Management believe that these measures are the most relevant in evaluating the 
performance of the segment and for making resource allocation decisions. 
 
The following summary describes the operations in each of the Group's reportable 
segments. Performance is measured based on segment operating profit, as included in the 
management reports that are reviewed by the Executive Directors. These internal reports 
are prepared in accordance with IFRS accounting policies (pre IFRS 16) consistent with 
these Group Financial Statements. 
 
All material operations of the reportable segments are carried out in the UK and all 
material non-current assets are located in the UK. The Group's revenue is driven by the 
consolidation of individual small value transactions and as a result Group revenue is 
not reliant on a major customer or group of customers. All revenue is from external 
customers. 
 
Income statement         Retail Car Servicing GBPm     26 weeks to 
 
                             GBPm                   2 October 2020 
 
                                                 Total Unaudited 
 
                                                              GBPm 
 
                 Revenue  524.2            114.7           638.9 
 
Segment result before      56.2              4.1            60.3 
non-underlying items pre 
IFRS 16 
Non-underlying items      (0.3)            (0.3)           (0.6) 
Segment result pre IFRS    55.9              3.8            59.7 
16 
Unallocated expenses1                                      (1.3) 
Operating profit pre                                        58.4 
IFRS 16 
IFRS 16                                                4.9 
Net financing expense                                 (7.9) 
Profit before tax                                           55.4 
Taxation                                                  (10.4) 
Profit after tax                                            45.0 
 
Income statement         Retail Car Servicing GBPm  26 weeks to 27 
                                                  September 2019 
 
                             GBPm 
                                                 Total Unaudited 
 
                                                              GBPm 
 
                 Revenue  500.0             82.7           582.7 
 
Segment result before      25.0              3.2            28.2 
non-underlying items pre 
IFRS 16 
Non-underlying items      (2.5)            (0.2)           (2.7) 
Segment result pre IFRS    22.5              3.0            25.5 
16 
Unallocated expenses1                                      (1.1) 
Operating profit pre                                        24.4 
IFRS 16 
IFRS 16                                                9.7 
Net financing expense                                 (6.6) 
Profit before tax                                           27.5 
Taxation                                                   (5.6) 
Profit after tax                                            21.9 
 
1 Unallocated expenses have been disclosed to reflect the format of the internal 
management reports reviewed by the Chief Operating Decision maker and include an 
 amortisation charge of GBP1.3m in respect of assets acquired through business 
 combinations (2019: GBP1.1m). 
 
Income statement             Retail Car Servicing GBPm 53 weeks to 
 
                                 GBPm                      3 April 
 
                                                            2020 
 
                                                           Total 
 
                                                              GBPm 
 
                     Revenue  961.0            194.1     1,155.1 
 
Segment result before          52.0              5.5        57.5 
non-underlying items pre 
IFRS 16 
Non-underlying items         (29.5)            (2.6)      (32.1) 
Segment result pre IFRS 16     22.5              2.9        25.4 
Unallocated expenses1                                      (2.1) 
Operating profit pre IFRS 16                                23.3 
IFRS 16                                                      9.7 
Net financing expense                                     (13.6) 
Profit before tax                                           19.4 
Taxation                                                   (1.9) 
Profit after tax                                            17.5 
 
1 Unallocated expenses have been disclosed to reflect the format of the internal 
management reports reviewed by the Chief Operating Decision maker and include an 
 amortisation charge of GBP2.1m in respect of assets acquired through business 
 combinations (2019: GBP2.1m). 
 
Other segment         Retail        Car     26 weeks to 
items:                        Servicing 
                                     GBPm 
 
                          GBPm             2 October 2020 
 
                                        Total Unaudited 
 
                                                     GBPm 
 
Capital expenditure      9.3        1.9            11.2 
Depreciation             8.1        2.6            10.7 
expense 
Amortisation of         29.0        5.6            34.6 
right-of-use asset 
       Amortisation      4.8        0.5           5.3 
            expense 
 
Other segment items:      Retail  Car Servicing      26 weeks to 
                                             GBPm 
 
                              GBPm                    27 September 
                                                            2019 
 
                                                 Total Unaudited 
 
                                                              GBPm 
 
    Capital expenditure     14.7            1.9             16.6 
Depreciation expense         9.6            2.3             11.9 
Amortisation of             32.0            4.2             36.2 
right-of-use asset 
   Amortisation expense      4.4            0.5              4.9 
 
Other segment items:         Retail Car Servicing GBPm 53 weeks to 
 
                                 GBPm                      3 April 
 
                                                            2020 
 
                                                           Total 
 
                                                              GBPm 
 
       Capital expenditure     28.8             18.0        46.8 
Depreciation and               25.0              4.7        29.7 
impairment expense 
Impairment of right-of-use      8.5              0.9         9.4 
asset 
           Amortisation of     63.7              9.9        73.6 
        right-of-use asset 
      Amortisation expense      8.5              0.8         9.3 
 
There have been no significant transactions between segments in the 26 weeks ended 2 
 October 2020 (2019: GBPnil). 
 
7) Revenue 
 
A) Revenue streams and location 
 
The Group's operations and main revenue streams are those described in the last annual 
financial statements. The Group's revenue is derived from contracts with customers. 
 
Revenue split by the Group's operating segments are shown in Note 6. 
 
All revenue is recognised in the United Kingdom and Republic of Ireland. 
 
B) Seasonality of operations 
 
In general, the Group's results are not seasonal with revenue in the first half broadly 
similar to that of the second, however sales of certain products tend to fluctuate by 
season. For example, sales of children's cycles peak in the Christmas season and sales 
of adult cycles tend to peak in the summer. 
 
8) Non-underlying items 
 
                      26 weeks to       26 weeks to  53 weeks to 
                        2 October 27 September 2019      3 April 
 
                             2020                           2020 
                        Unaudited         Unaudited 
                               GBPm                GBPm           GBPm 
Non-underlying 
operating expenses: 
 
                              0.9               1.2          2.8 
Organisational 
restructure costs (a) 
Group-wide strategic            -               0.8          1.0 
review (b) 
Provision for                   -               0.7          0.8 
expected settlement 
of an ongoing legal 
case (c) 
Closure costs (d)           (0.5)                 -         26.8 
Impairment of                   -                 -          0.9 
right-of-use asset 
(e) 
Acquisition and                 -                 -          1.9 
investment-related 
fees (f) 
Non-underlying items          0.4               2.7         34.2 
before tax 
Tax on non-underlying       (0.1)             (0.5)        (5.0) 
items (g) 
Non-underlying items          0.3               2.2         29.2 
after tax 
 
Non-underlying items are those items that are unusual because of their size, nature 
(one-off, non-trading costs) or incidence. The Group's management considers that these 
items should be separately identified within their relevant income statement category 
to enable a full understanding of the Group's results. 
 
a) In the current and prior periods separate and unrelated organisational 
restructuring activities were undertaken. 
 
Current period costs comprised: 
 
· Redundancy and transition costs of GBP0.9m relating to roles which have been 
outsourced or otherwise will not be replaced (H1 FY20: GBP0.6m, FY20 full year: GBP1.4m). 
This is part of a wider strategic initiative. 
 
· In the prior period asset write-offs principally resulting from the strategic 
decision to re-platform the Retail and Autocentres websites. (H1 FY21 GBPnil, H1 HY20 
GBP0.6m, FY20 full year: GBP1.4m) 
 
b) In the prior period costs were incurred in preparing and implementing the new 
Group strategy. 
 
Prior period costs comprised: 
 
· External consultant costs (H1 FY20: GBP0.2m, FY20 full year: GBP0.4m). 
 
· Store labour costs, point of sale equipment and other associated costs in 
completing the cycling space relay across the store estate (H1 FY20: GBP0.6m, FY20 full 
year: GBP0.6m). 
 
c) During the prior period a provision was created for expected costs of settling an 
ongoing court case which was then settled during the second half of the period. The 
size and nature of the settlement is outside the normal experience of the Group. 
 
d) Closure costs represent costs associated with the closure of the operations of 
Cycle Republic and the Boardman Performance Centre ("Cycle Republic") following a 
strategic review of the Group's cycling businesses. The provision in the prior year 
mostly relates to the impairment of right-of-use assets, intangible assets, tangible 
assets and inventories (FY20: GBP26.8m). In the current period, the balance relates to 
the release of some of these provisions HY20: GBP0.5m. 
 
e) In light of the ongoing Covid-19 pandemic, the Group revised future cash flow 
projections for stores and garages. As a result, in the prior year, GBP0.9m (FY20) 
incremental impairment has been recognised in relation to garages where the current 
and anticipated future performance does not support the carrying value of the 
right-of-use asset and associated tangible assets. This change is directly 
attributable incremental impairment due to Covid-19 and relates primarily to the 
right-of-use asset value. 
 
f) In the prior year costs were incurred in relation to the investment in McConechy's 
Tyre Services and Tyres on the Drive. Tyres on the Drive acquisition costs comprise 
of GBP1m principally relating to the costs of dual running Halfords Mobile Expert and 
Tyres on the Drive, as well as the write-off of the receivables balance due from 
Tyres on the Drive related to Halfords Mobile Expert prior to acquisition and GBP0.9m 
relating to professional fees in respect of the acquisition of McConechy's Tyre 
Services. 
 
g) The tax credit in H1 FY21 represents a tax rate of 19.0% applied to non-underlying 
items (H1 FY20: 19.0%, FY20 full year: 14.6%). 
 
9) Net Finance Costs 
 
                       26 weeks to      26 weeks to  53 weeks to 
                    2 October 2020     27 September      3 April 
                                               2019 
 
                                                            2020 
                         Unaudited        Unaudited 
                                GBPm               GBPm           GBPm 
Finance costs: 
Bank borrowings              (2.0)           (0.4))        (1.6) 
Amortisation of              (0.2)           (0.2))        (0.4) 
issue costs on 
loans 
Commitment and               (0.5)           (0.3))        (0.6) 
guarantee fees 
Interest payable on          (5.2)           (5.7))       (11.3) 
lease liabilities 
Finance costs                (7.9)           (6.6))       (13.9) 
Finance income: 
Bank and similar                 -                -     0.3 
interest 
Finance income                   -                -          0.3 
Net finance costs            (7.9)            (6.6)       (13.6) 
 
10) Income tax expense 
 
Income tax expense is recognised based on management's best estimate of the weighted 
average annual income tax rate expected for the full financial year applied to the 
pre-tax income of the interim period. 
 
The effective tax rate before non-underlying items for the 26 weeks to 2 October 2020 
is 18.9% (H1 2020: 20.2%). The effective tax rate is higher than the UK corporation tax 
rate principally due to an increase in the tax rate due to non-deductible amortisation 
being offset by movements on deferred tax balances in the current and prior periods. 
 
11) Financial Instruments and Related Disclosures 
 
Accounting classifications and fair values 
 
The following table shows the carrying amounts and fair values of financial assets and 
liabilities, including their levels in the fair value hierarchy. It does not include 
fair value information for financial assets and financial liabilities not measured at 
fair value if the carrying amount is a reasonable approximation of fair value. 
 
2 October 
2020 
                 Fair FVOCI -     Amortised     Other     Total 
              Value -  equity          cost financial 
              hedging instrum               liabiliti 
              instrum    ents                      es 
                 ents                                  carrying 
                                         GBPm              amount 
 
                           GBPm                      GBPm 
                   GBPm 
                                                             GBPm 
Financial 
assets 
measured at 
fair value 
Forward           2.0       -             -         -       2.0 
exchange 
contracts 
used for 
hedging 
Equity              -       -             -         -         - 
investments 
                  2.0       -             -         -       2.0 
Financial 
assets not 
measured at 
fair value 
Trade and           -       -          41.1         -      41.1 
other 
receivables* 
Cash and            -       -         109.6         -     109.6 
cash 
equivalents 
                    -       -         150.7         -     150.7 
Financial 
liabilities 
measured at 
fair value 
Forward         (1.4)       -             -         -     (1.4) 
exchange 
contracts 
used for 
hedging 
                (1.4)       -             -         -     (1.4) 
Financial 
liabilities 
not measured 
at fair 
value 
Borrowings          -       -             -     (2.4)     (2.4) 
Lease               -       -             -   (378.7)   (378.7) 
liabilities 
Trade and           -       -             -   (161.7)   (161.7) 
other 
payables** 
                    -       -             -   (542.8)   (542.8) 
 
 *Prepayments and accrued income of GBP21.4m are not included as a financial asset. 
 
  ** Other taxation and social security payables of GBP51.4m, deferred income of GBPnil, 
  accruals of GBP64.5m and other payables of GBP18.1m are not included as a financial 
liability. 
 
27 September 
2019 
                  Fair  FVOCI - Amortised       Other      Total 
               Value -   equity                         carrying 
               hedging instrume                           amount 
               instrum      nts 
                  ents               cost   financial 
                                          liabilities 
                                                              GBPm 
                             GBPm 
                    GBPm                 GBPm 
                                                   GBPm 
Financial 
assets 
measured at 
fair value 
Forward            6.9        -         -           -        6.9 
exchange 
contracts 
used for 
hedging 
Equity               -        -         -           -          - 
investments 
                   6.9        -         -           -        6.9 
Financial 
assets not 
measured at 
fair value 
Trade and            -        -      34.4           -       34.4 
other 
receivables* 
Cash and cash        -        -      20.5           -       20.5 
equivalents 
                     -        -      54.9           -       54.9 
Financial 
liabilities 
measured at 
fair value 
Forward          (0.9)        -         -           -      (0.9) 
exchange 
contracts 
used for 
hedging 
                 (0.9)        -         -           -      (0.9) 
Financial 
liabilities 
not measured 
at fair value 
Borrowings           -        -         -      (43.2)     (43.2) 
Lease                -        -         -     (427.1)    (427.1) 
liabilities 
Trade and            -        -         -     (176.5)    (176.5) 
other 
payables** 
                     -        -         -     (646.8)    (646.8) 
 
 *Prepayments and accrued income of GBP14.4m are not included as a financial asset. 
 
  ** Other taxation and social security payables of GBP26.6m, deferred income of GBPnil, 
  accruals of GBP39.0m and other payables of GBP13.1m are not included as a financial 
liability. 
 
Measurement of fair values 
 
The fair values of each class of financial assets and liabilities is the carrying 
amount, based on the following assumptions: 
 
Trade receivables, trade         The fair value approximates to 
payables and lease obligations,  the carrying amount because of 
short-term deposits and          the short 
borrowings                       maturity of these instruments, 
                                 using an interest rate of 7.1% 
                                 for long-term 
                                 lease obligations. 
Long-term borrowings             The fair value of bank loans 
                                 and other loans approximates to 
                                 the carrying value reported in 
                                 the statement of financial 
                                 position as the majority are 
                                 floating rate where payments 
                                 are reset to market rates at 
                                 intervals of less than one 
                                 year. 
Forward currency contracts       The fair value is determined 
                                 using the market forward rates 
                                 at the reporting 
                                 date and the outright contract 
                                 rate. 
 
Financial instruments carried at fair value are required to be measured by reference to 
the following levels: 
 
· Level 1: quoted prices in active markets for identical assets or liabilities; 
 
· Level 2: inputs other than quoted prices included within Level 1 that are 
observable for the asset or liability, either directly (i.e. as prices) or indirectly 
(i.e. derived from prices); and 
 
· Level 3: inputs for the asset or liability that are not based on observable market 
data (unobservable inputs). 
 
All financial instruments carried at fair value have been measured by a Level 2 
valuation method. There have been no changes to classifications in the current or prior 
period. 
 
Credit risk 
 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to 
a financial instrument fails to meet its contractual obligations and arises principally 
from the Group's receivables from customers. 
 
The Group does not have any individually significant customers and so no significant 
concentration of credit risk. The majority of the Group's sales are paid in cash at 
point of sale which further limits the Group's exposure. The Group's exposure to credit 
risk is influenced mainly by the individual characteristics of each customer. The Board 
of Directors has established a credit policy under which each new customer is analysed 
individually for creditworthiness before the Group's standard payment terms and 
conditions are offered. The Group limits its exposure to credit risk from trade 
receivables by establishing a maximum payment period of one month for customers. All 
trade receivables are based in the United Kingdom. 
 
The Group has taken into account the historic credit losses incurred on trade 
receivables and adjusted it for forward looking estimates. The movement in the 
 allowance for impairment in respect of trade receivables during the period was GBP0.1m. 
 
12) Dividends 
 
The Directors did not pay a final dividend in respect of the financial period ended 3 
April 2020. 
 
The Directors are not proposing an interim dividend for the 26 weeks to 2 October 2020 
(2019: 6.18 pence per share). 
 
13) Earnings Per Share 
 
Basic earnings per share is calculated by dividing the earnings attributable to 
ordinary shareholders by the weighted average number of ordinary shares in issue during 
the period. The weighted average number of shares excludes shares held by the Employee 
Benefit Trust and has been adjusted for the issue/repurchase of shares during the 
period. 
 
For diluted earnings per share the weighted average number of ordinary shares in issue 
is adjusted to assume conversion of all dilutive potential ordinary shares. These 
represent share options granted to employees where the exercise price is less than the 
average market price of the Company's ordinary shares during the 26 weeks to 2 October 
2020. 
 
                      26 weeks to       26 weeks to  53 weeks to 
                   2 October 2020 27 September 2019      3 April 
 
                                                            2020 
                        Unaudited         Unaudited 
                           Number            Number       Number 
                                m                 m            m 
Weighted average            199.1             199.1        199.1 
number of shares 
in issue 
Less: shares held           (2.1)            (2.1))        (2.1) 
by the Employee 
Benefit Trust 
Weighted average            197.0             197.0        197.0 
number of shares 
for calculating 
basic earnings per 
share 
Weighted average              3.6               0.7          3.3 
number of dilutive 
share options 
Weighted number of          200.6             197.7        200.3 
shares for 
calculating 
diluted earnings 
per share 
 
                        26 weeks to     26 weeks to  53 weeks to 
                     2 October 2020    27 September      3 April 
                                               2019 
 
                                                            2020 
                          Unaudited       Unaudited 
                                 GBPm              GBPm           GBPm 
Earnings                       45.0            21.9         17.5 
attributable to 
equity shareholders 
Non-underlying 
items: 
Operating expenses              0.4             2.7         34.2 
Tax charge on                 (0.1)          (0.5))        (5.0) 
non-underlying items 
Underlying earnings            45.3            24.1         46.7 
before 
non-underlying items 
 
Basic earnings per            22.8p           11.1p         8.9p 
share 
Diluted earnings per          22.4p           11.1p         8.7p 
share 
Basic underlying              23.0p           12.2p        23.7p 
earnings per share 
Diluted underlying            22.6p           12.2p        23.3p 
earnings per share 
 
The alternative measure of earnings per share is provided because it reflects the 
Group's underlying performance by excluding the effect of non-underlying items. 
 
14) Capital Expenditure - Tangible, Intangible & Right-of-Use Assets 
 
                         Tangible and     Right-of-use 
                           Intangible           assets 
                               Assets 
 
                                             Unaudited 
                            Unaudited 
                                   GBPm               GBPm 
Net book                        484.7            390.0 
value at 29 
March 2019 
Additions                        16.6             10.0 
Disposals               (1.4)            (0.1) 
Transfer of             (6.3)                              6.3 
finance 
leases 
Depreciation           (17.8)                           (36.2) 
, 
amortisation 
and 
impairment 
Net book                475.8                            370.0 
value at 27 
September 
2019 
 
                         Tangible and     Right-of-use 
                           Intangible           assets 
                               Assets 
 
                                             Unaudited 
                            Unaudited 
                                   GBPm               GBPm 
Net book                        478.8            349.9 
value at 3 
April 2020 
Additions                        11.2              7.0 
Disposals               (0.2)                             (3.1) 
Depreciation           (17.3)                            (34.6) 
, 
amortisation 
and 
impairment 
Net book                472.5                             319.2 
value at 2 
October 2020 
 
15) Analysis of Movements in the Group's Net Debt in the Period 
 
                         Cash flow Other non-cash             At 
                                          changes 
 
                      At                          2 October 2020 
 
                 3 April 
                    2020 Unaudited      Unaudited      Unaudited 
                      GBPm        GBPm             GBPm             GBPm 
Cash in hand and   115.3     (5.9)              -          109.4 
at bank 
Debt due after   (179.1)     177.0          (0.1)          (2.2) 
one year 
Total net debt    (63.8)     171.1          (0.1)          107.2 
excluding leases 
 
Current lease     (83.2)      39.0         (29.5)         (73.7) 
liabilities 
Non-current      (332.8)         -           27.7        (305.1) 
lease 
liabilities 
Total lease      (416.0)      39.0          (1.8)        (378.8) 
liabilities 
 
Total net debt   (479.8)     210.1          (1.9)        (271.6) 
 
Non-cash changes comprise finance costs in relation to the amortisation of capitalised 
  debt issue costs of GBP0.2m (H1 FY20: GBP0.1m), and movements in leases. Cash and cash 
  equivalents at the period end consist of GBP104.5m (H1 FY20: GBP15.4m) of liquid assets, 
    GBP5.1m (H1 FY20: GBP5.1m) of cash held in Trust and GBP0.2m (H1 FY20: GBP16.3m) of bank 
overdrafts. 
 
                       At Cash flow         Other            At 
                                         non-cash 
                                          changes 
 
                 29 March                          27 September 
                                                           2019 
                     2019 Unaudited     Unaudited     Unaudited 
                       GBPm        GBPm            GBPm            GBPm 
Cash in hand and    (7.4)      11.6             -           4.2 
at bank 
Debt due after     (63.8)      37.0         (0.1)        (26.9) 
one year 
Total net debt     (71.2)      48.6         (0.1)        (22.7) 
excluding leases 
 
Current lease       (1.3)      25.3        (98.3)        (74.3) 
liabilities* 
Non-current         (9.3)         -       (341.2)       (350.5) 
lease 
liabilities 
Total lease        (10.6)      25.3       (439.5)       (424.8) 
liabilities 
 
Total net debt     (81.8)      73.9       (439.6)       (447.5) 
 
*Adjustment to the lease liability reported in the September 2019 interim results. See 
note 19. 
 
16) Share Capital 
 
                                Number of shares   Share   Share 
 
                                               m capital premium 
 
                                                      GBPm account 
 
                                                              GBPm 
As at 29 March 2019 and 27                 199.1     2.0   151.0 
September 2019 
 
                                Number of shares   Share   Share 
 
                                               m capital premium 
 
                                                      GBPm account 
 
                                                              GBPm 
As at 3 April 2020 and 2                   199.1     2.0   151.0 
October 2020 
 
During the 26 weeks to 2 October 2020 and 27 September 2019, there were no movements in 
company share capital. The shares held in treasury are used to meet options under the 
Company's share options schemes. 
 
17) Contingent liability 
 
The Group's banking arrangements include the facility for the bank to provide a number 
of guarantees in respect of liabilities owed by the Group during the course of its 
trading. In the event of any amount being immediately payable under the guarantee, the 
bank has the right to recover the sum in full from the Group. The total amount of 
 guarantees in place at 2 October 2020 amounted to GBP1.5m. 
 
Where right of set off is included within the Group's banking arrangements, credit 
balances may be offset against the indebtedness of other Group companies. 
 
18) Related Party Transactions 
 
The key management personnel of the Group comprise the Executive and Non-Executive 
Directors and the Halfords Limited and Halfords Autocentres management boards. The 
details of the remuneration, long-term incentive plans, shareholdings and share option 
entitlements of individual Directors are included in the Directors' Remuneration Report 
on pages 132 to 140 of the Group 2020 Annual Report and Accounts. 
 
During the period no share options (H1 FY20: 984,783) were granted to directors in 
relation to the Performance Share Plan ("PSP") and no share options (H1 FY20: 818) were 
granted in relation to the Deferred Bonus Plan ("DBP"). 
 
19) Prior Period Adjustment 
 
As a result of further work in preparing the annual report for the 53 weeks to 3 April 
2020 and advancements in Halfords' IFRS 16 software, a correction has been made to the 
original IFRS 16 transition adjustment to reflect payments made to landlords 
immediately prior to the transition date. This resulted in a GBP2.3m reduction to the 
opening lease liability, and a GBP0.4m reduction to the deferred tax asset as at 30 March 
2019 for the period ended 27 September 2019. This adjustment was correctly reflected in 
the annual report for the 53 weeks to 3 April 2020. 
 
Following refinements to Halfords IFRS reporting process, the consolidated statement of 
cash flows for the 53 weeks to 3 April 2020 was adjusted to reduce the cash outflow for 
 capital payments on leases (in financing activities) by GBP11.3m and to reduce the 
working capital movements across other payables, receivables and provisions (in 
operating activities) by the same amount to exclude from these line items amounts that 
had been eliminated from the balance sheet for IFRS 16 reporting purposes and should 
have similarly been eliminated in the operating cash flow reconciliation. These 
adjustments have had no impact on the reported profit or net assets of the Group. 
 
Responsibility statement of the Directors in respect of the half-yearly financial 
report 
 
We confirm that to the best of our knowledge: 
 
· the condensed set of financial statements has been prepared in accordance with IAS 
34 Interim Financial Reporting as adopted by the EU; 
 
· the interim management report includes a fair review of the information required 
by: 
 
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of 
important events that have occurred during the first six months of the financial year 
and their impact on the condensed set of financial statements; and a description of 
the principal risks and uncertainties for the remaining six months of the year; and 
 
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party 
transactions that have taken place in the first six months of the current financial 
year and that have materially affected the financial position or performance of the 
entity during that period; and any changes in the related party transactions 
described in the last annual report that could do so. 
 
By order of the Board 
 
Loraine Woodhouse, Chief Financial Officer 
 
17 November 2020 
 
Halfords Group plc 
 
Independent review report to Halfords Group plc 
 
For the 26 weeks to 2 October 2020 
 
Introduction 
 
We have been engaged by the Company to review the condensed set of financial statements 
in the half-yearly financial report for the 26 weeks ended 2 October 2020 which 
comprises the condensed consolidated income statement, the condensed consolidated 
statement of comprehensive income, the condensed consolidated statement of financial 
position, the condensed consolidated statement of equity, the condensed consolidated 
statement of cashflows and the related notes. 
 
We have read the other information contained in the half-yearly financial report and 
considered whether it contains any apparent misstatements or material inconsistencies 
with the information in the condensed set of financial statements. 
 
Directors' responsibilities 
 
The half-yearly financial report is the responsibility of and has been approved by the 
directors. The directors are responsible for preparing the half-yearly financial report 
in accordance with the Disclosure Guidance and Transparency Rules of the United 
Kingdom's Financial Conduct Authority. 
 
As disclosed in note 2, the annual financial statements of the group are prepared in 
accordance with International Financial Reporting Standards (IFRSs) as adopted by the 
European Union. The condensed set of financial statements included in this half-yearly 
financial report has been prepared in accordance with International Accounting Standard 
34, "Interim Financial Reporting", as adopted by the European Union. 
 
Our responsibility 
 
Our responsibility is to express to the Company a conclusion on the condensed set of 
financial statements in the half-yearly financial report based on our review. 
 
Scope of review 
 
We conducted our review in accordance with International Standard on Review Engagements 
(UK and Ireland) 2410, "Review of Interim Financial Information Performed by the 
Independent Auditor of the Entity", issued by the Financial Reporting Council for use 
in the United Kingdom. A review of interim financial information consists of making 
enquiries, primarily of persons responsible for financial and accounting matters, and 
applying analytical and other review procedures. A review is substantially less in 
scope than an audit conducted in accordance with International Standards on Auditing 
(UK) and consequently does not enable us to obtain assurance that we would become aware 
of all significant matters that might be identified in an audit. Accordingly, we do not 
express an audit opinion. 
 
Conclusion 
 
Based on our review, nothing has come to our attention that causes us to believe that 
the condensed set of financial statements in the half-yearly financial report for the 
26 weeks ended 2 October 2020 is not prepared, in all material respects, in accordance 
with International Accounting Standard 34, as adopted by the European Union, and the 
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct 
Authority. 
 
Use of our report 
 
Our report has been prepared in accordance with the terms of our engagement to assist 
the Company in meeting its responsibilities in respect of half-yearly financial 
reporting in accordance with the Disclosure Guidance and Transparency Rules of the 
United Kingdom's Financial Conduct Authority and for no other purpose. No person is 
entitled to rely on this report unless such a person is a person entitled to rely upon 
this report by virtue of and for the purpose of our terms of engagement or has been 
expressly authorised to do so by our prior written consent. Save as above, we do not 
accept responsibility for this report to any other person or for any other purpose and 
we hereby expressly disclaim any and all such liability. 
 
BDO LLP 
 
Chartered Accountants 
 
London 
 
17 November 2020 
 
BDO LLP is a limited liability partnership registered in England and Wales (with 
registered number OC305127). 
 
ISIN:          GB00B012TP20 
Category Code: IR 
TIDM:          HFD 
LEI Code:      54930086FKBWWJIOBI79 
Sequence No.:  88040 
EQS News ID:   1148879 
 
End of Announcement EQS News Service 
 
 
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