Healthy demand and tax breaks help Halfords

Jun 8 2009 By Peter McCusker, The Journal

A QUIET week for corporate news will see results from retailer Halfords, a reshuffle of the FTSE 100 Index and more signposts over the health of UK manufacturers.

Car parts and cycles chain Halfords, which is due to post full-year results on Wednesday, has seen healthy demand for its bikes despite wider sales declines.

The Redditch-based firm has gained a helping hand from Government tax breaks to sell one million bicycles in the 12 months to March for the second year in a row.

Halfords said 34,000 people bought bikes through the Cycle2Work scheme in the past year, an increase of 50%. The scheme offers people tax incentives to buy a bike as long as they cycle to work.

The demand – along with better sales of car maintenance products – eased the pain of a wider 3% fall in comparative sales in the 13 weeks to March 27. This was mainly due to price-cutting among more discretionary products such as satnavs.

But Halfords has proved its resilience after guiding the market towards annual profits of around £92m for the full year, compared with £90.2m previously.

Consumer products firm PZ Cussons will give its latest update on Wednesday amid hopes the Imperial Leather maker will continue its recent resilient trading.

In the UK, the Stockport-based firm has continued to grow revenue and profits despite the challenging trading conditions.