Halfords trading statement
23 Jul 2008

Halfords, the UK's leading automotive and leisure products retailer, announces its Interim Management Statement for the 13 weeks to 27 June 2008, ahead of today's Annual General Meeting.

Group sales in the quarter increased by 1.7% over the equivalent period in 2007, against a particularly strong comparative, with the rate of sales growth increasing each month during the quarter. Adjusting for the absence of a full Easter during the quarter, this performance represents sales growth equivalent to 3.0% and equates to like-for-like sales growth of 0.2% (-1.1% excluding Easter).

In the current year, Car Maintenance has continued to perform strongly reflecting its inherent counter-seasonal and defensive characteristics and increased transaction values from ongoing product innovation. Leisure sales continue to improve after a slow start and, within Car Enhancement, in-car technology continues to deliver year-on-year growth in both volume and value.

A strong contribution from our Car Maintenance category during the quarter has meant that gross margin per cent is slightly ahead of expectation and above the upper range of our guidance. Reflecting the strengthening of Leisure sales in the balance of the season, we still anticipate a full year gross margin per cent in line with the guidance previously given.

Reflecting the favourable margin position and a focus on costs, profit for the first quarter is ahead of our expectations.

The Board continues to utilise the strength of the Group's balance sheet through a share buy-back programme to enhance shareholder returns. During the period, the Group acquired 3.3m shares for cancellation at an average cost of 280.0 pence per share. Since the programme began in June 2006, 22.1m shares have been acquired at a cost of £66.1m at an average of 298.5 pence per share.

Nick Wharton and Paul McClenaghan, acting joint Managing Directors, commented:

'This is an encouraging start to the financial year which, when set against the strong sales growth achieved in the same period in the prior year, underlines Halfords' resilient and defensive proposition. Halfords continues to progress its growth strategy and, in line with our plans, we opened three new stores during the quarter, including our first Bikehut in Central London. Whilst not immune to the ongoing challenging retail environment, our market leading positions, extensive ranges and unique service proposition continue to provide us with confidence in delivering full year earnings in line with our expectations.'

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