Halfords 3Q IMS is in our view positive with PBT forecasts for FY 2020 held at £50-55m and good LFL in Retail cycles +5.9% and Autocentres +4.6% where most of new management development work has been focused. Retail Motoring products LFL -2.7% continues to show impacts of discretionary spend softness in our view. Management retains its caution about near term demand prospects overall and its development programme in Autocentres and key aspects of the business overall (notably new integrated webs
Companies: Halfords Group Plc
Following the recent 1H Results we are upgrading our recommendation from Hold to Buy. This reflects valuation, the financial disciplines being brought to bear as the company mitigates difficult trading conditions as it is investing and mainly our view that Halfords is beginning to see the benefits of work to make it more future-ready. The re-launch of the suite of group web sites onto an integrated platform in 4Q should help the improvements to date transition from AutoCentres to the Retail busi
Halfords (HFD) has reported 1H PBT of £25.9m against consensus of £22.8m (1H 2018/19 £30.5m) – all numbers pre IFRS 16. It has also maintained current year profit guidance, indicated investment related reduction to consensus for FY 21 and announced that it will cut the full year dividend and re-base FY 21 dividend to 12p.
Weaker than previously expected sales in the main Retail business (c85% of Group sales) have resulted in current year profit guidance of “broadly unchanged” being reduced by the company to a range of £50-55m (2018/19 £58m). As the market consensus had moved down to £55m this is effectively a 5% reduction to market consensus which should be seen as positive in our view given market fears.
We are quite tempted to Buy HFD. In our view some of the modernisation stories being worked on in the background are seeing encouraging early results and the aim to move the business onto more of a customerrelationship model is beginning to bear fruit. The forecast reduction guided by the company today – from flat yoy to £50- 55m PBT (£58.8m 2018/19) – suggests that there is still risk in taking that course. But we believe that when we see the Interim results it will become more evident that man
This note is briefly to update forecasts and Valuation. We found the Prelims, the accompanying analyst meetings and our own discussions with the new management team more positive than we had expected. The current year will be characterised by a major upgrade to online systems alongside running the business as defensively as possible to counter anticipated volatile (and likely weak) demand. This combination may prove relatively benign to the success of the systems piece as it will not have to be
In the circumstances of weak and volatile trading we believe that the new management team has done a decent job of managing what was reasonably under its control over the latter part of the year. Strategic changes now have to be balanced against tactical defensive decisions which will limit visibility of recovery potential in the near term.
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The problem with new CEOs is that they always feel the need to make their mark on the businesses they have arrived to manage. That’s good if the business is broken and more questionable where it is not. Conceptually we find it difficult to argue with the logic of increasing the service elements of the business, upping own label participation from 50% to 60% over 3-5 years and integrating the online/offline/Retail/Autocentres businesses. But we expect this will be a tougher job than management ex
Clinigen Group (CLIN LN) FY results in line, further acquisitions & placing | CVS Group (CVSG LN) Reassuring tenor to FY18 finals | Halfords Group (HFD LN) New strategic vision launched to build on existing strengths | Itaconix (ITX LN) Focused on commercial progress following recent fundraise | Maistro (MAIS LN) Momentum continuing to build into H2’18 and beyond | Urban&Civic (UANC LN) Contracting parcels, positive developments towards planning | Vp (VP/ LN) Positive H1 update highlights furthe
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Halfords has a compelling, differentiated brand strategy that will help it continue to grow its core Motoring and Cycling market shares. Services remain at the heart of the business and investment in this area is expected to accelerate. With earnings expectations now reset and management outlook understandably cautious, we believe that investor focus will now be on the new CEO’s strategic update in September.
Bagir Group (BAGR LN) Strategic partnership with Shandong Ruyi - update | Frontier Smart Technologies Group (FST LN) Challenging Q2’18 results in downgrades | Halfords Group (HFD LN) Groundhog day as HFD guides to another flat year | Miton Group (MGR LN) Rise of nascent funds, income growth potential | Polypipe Group (PLP LN) Expectations unchanged, despite weather impact | Restaurant Group (RTN LN) Reassuring trading update | Sanderson Group (SND LN) Solid H1 highlights reassuring consistency |
Companies: BAGR FST HFD GEN RTN SND PMI
We called the stock wrong ahead of these prelims. Instead of market forecasts being upgraded, fresh guidance has led to downgrades. While frustrating for expectant shareholders, this is not a profit warning but a ‘delay’ in the recovery of lost margin (FX mitigation), and an ‘acceleration’ of investment into services and customer capability which should generate a return in outer years. Pending the new CEO’s strategic update in Sept, though, Halfords growth plans in FY20/FY21 are unclear. Includ
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HeiQ has reported its results for the six months to June 2021. The company has reported revenues of $25.8m for the period and an adjusted EBITDA of $4.8m. While this result is down YoY versus the pandemic boosted H1/20A period, the performance is improved sequentially versus H2/20A, with revenue up 27% and EBITDA up over 140%. Through the period, HeiQ has faced a number of external headwinds which have created short-term challenges, including regional lockdowns, higher logistic costs and increas
Companies: HeiQ PLC
Draftkings has made a £16.4bn ($22.4bn) bid to acquire Entain in a cash (630p) and stock offer, valuing the target at 2800p/share. While the bid is promising, MGM (BetMGM’s JV partner) can throw a spanner in the works (counter-bid or a veto).
Companies: Entain PLC
Over the last twelve months, Escape Hunt has dramatically increased scale and proven the economics of its business, allowing it to target positive cash generation. All of the company’s owner-operated sites traded profitably post period end.
Companies: Escape Hunt Plc
Alkemy Capital (ALK.L) has joined the Main Market Standard. The Company was formed to undertake an acquisition of a controlling interest in a company or business, targeting an acquisition in the mining and technology metals sectors. At the Placing Price and on Admission the Company will have a Market Capitalisation of £2,999,999.50.
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What’s cooking in the IPO kitchen?
Press reports that Law firm Mishcon de Reya has agreed a merger with life sciences specialist Ta
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SCS Group’s full year trading update for the 53 weeks to 31st July shows that the strong demand that has been a hallmark of post lockdown periods over the past 15 months has continued, with LFL orders through the Group’s weeks 47 to 53 up by 23.7% on pre-Covid levels. Lower costs underpin a 16% upgrade to FY21 CPTP expectations, whilst the strong order book drives a 17% upgrade to our FY22 CPTP forecast. We look for EPS of 32.2p and 30.8p for FY21 and FY22 respectively. Year end net cash of £87.
Companies: ScS Group plc
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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Companies: City Pub Group PLC
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Kingfisher reported better-than-expected figures at its H1 FY21/22 results, with lfl sales and adjusted PBT coming in ahead of market expectations and management’s guidance. Lfl sales outlook for H2 has been raised, the share buy-back programme re-introduced and the interim dividend increased. However, the share price was down c.5% today, as investors worried about inflationary cost pressures and supply chain constraints which are expected to continue into 2022. We will update our estimates and
Companies: Kingfisher Plc
This is our first report on Etsy Inc., one of the leading global online marketplaces for handmade and vintage goods. The company has had a phenomenal growth trajectory over the past few months despite going through its fair share of volatility. Its growth story has been a function of both, a strong organic growth strategy coupled with a series of acquisitions. Etsy has expanded its e-commerce ecosystem as well as its product base through acquistions like Elo7, a Brazil-based handmade goods marke
Companies: ETSY (ETSY:NYSE)Etsy, Inc. (ETSY:NAS)
…countering longer-term tailwinds
Although we remain sellers of B&M it is hard not to be impressed with its ambition and the pace at which it moves. Two recent acquisitions, management change in Germany and pushing through a major warehouse investment in Bedford, as well as opening midhigh single digit percentage new space in the core B&M chain all attest to this.
Companies: B&M European Value Retail SA
The final results revealed adjusted PBT up 99% year-on-year, which was 10% better than forecast despite four upgrades during the financial year. This strong performance reflects the financial benefits that have accrued following the shift in the business model to online only, as well as management’s strategic decision to significantly increase marketing spend. A second special dividend for the 2020 financial year has also been announced, reflecting the strong cash flow characteristics of the bus
Companies: Best of the Best plc
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to ta
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