(Reuters) – British bikes and car parts retailer Halfords is seeing strong demand for motor servicing and is planning to hire 1,000 technicians in the next 12 months, it said on Wednesday, even as discretionary spending softened.
The retailer said it now expects underlying profit before tax to come in at the lower end of its forecast range of 65 million pounds to 75 million pounds ($77 million-$89 million) for the year ending March 2023.
Soaring prices of everything from energy to food are forcing British consumers to curtail non-essential spending as they try to make ends meet, while businesses are looking to rein-in costs and stay afloat by wooing customers with offers and discounts.
“In such a volatile macroeconomic environment, our strategy of focusing on the kind of predictable and recurring revenue that comes from motoring services and needs-based products has never been more relevant,” Chief Executive Officer Graham Stapleton said.
Half-yearly revenue grew 10.2% to 765.7 million pounds on the back of growth in servicing, while the year-ago quarter benefited from a pick up in sales after the UK emerged from the final COVID-19 lockdown.
However, profit halved to 29 million pounds, partly on higher costs.
Shares of the company fell nearly 15% in early trading.
Peel Hunt analysts said the interim results and full-year guidance were as expected.
“Whilst trading is anything but straightforward … there is undoubtedly a brighter future ahead for Halfords as a service-provider-that-does-some-retail and not vice versa.”
(Reporting by Prerna Bedi and Pushkala Aripaka in Bengaluru; Editing by Dhanya Ann Thoppil)