(Recasts with CEO comment, shares)
LONDON May 25 British bicycles to car parts
retailer Halfords is seeing early signs of a boost to
its business from more Britons opting to holiday in the UK
rather than overseas due to the weaker pound, its boss said on
The pound has fallen 13 percent against the U.S. dollar and
11 percent against the euro since Britain voted to leave the
European Union last June, making foreign holidays more expensive
and prompting an increase in "staycations" closer to home.
Halfords said its like-for-like retail sales rose 3.9
percent in the 15 weeks to April 28.
"We did see a real pick-up in some staycation related items,
such as roof boxes and cycle carriers," Chief Executive Jill
McDonald told reporters.
"We are seeing early signs that that staycation effect is
actually coming to fruition," she said.
McDonald said the firm has not observed any noticeable
weakening of consumer confidence, despite British pay growth
recently falling behind inflation.
"We're watching this like a hawk but we have not seen any
impact on our trading, driven by consumer sentiment and the
macro economic conditions," she said.
The flip side of a weaker pound for Halfords is that it
raises sourcing costs which have a negative impact on profits.
For the year to March 31 the firm reported a 7.5 percent
fall in annual profit.
The results are the last to be presented by McDonald. She
resigned earlier this month to take up a position leading Marks
& Spencer's clothing and homewares business and will
leave Halfords in October.
Halfords made a pretax profit before one-off items of 75.4
million pounds ($97.9 million) - slightly ahead of market
expectations of 74.8 million pounds, according to Reuters data,
but down from 81.5 million pounds in 2015-16. Revenue increased
7.2 percent to 1.1 billion pounds.
"Profit performance for the year was impacted by the weaker
pound but our plans are well developed and I am confident this
will be offset over time," McDonald said.
She said that although currency pressures will continue to
impact profits in the current 2017-18 year, plans were now in
place to help cushion the impact.
"We anticipate FY18 profit to be in line with current market
expectations and remain confident in the outlook for the group,"
For 2017-18 analysts were on average forecasting a pretax
profit of 74 million pounds, according to Reuters data.
Shares in Halfords, down 17 percent over the last year, were
up 2 percent at 366.2 pence at 0830 GMT, valuing the business at
728 million pounds.
($1 = 0.7700 pounds)
(Reporting by James Davey; Editing by Jane Merriman and Keith