Halfords - shares surge as profit guidance lands a maximum 24% above consensus
Shares in motoring and cycling business Halfords Group (LSE:HFD) have surged to a four-year high of 269.5p on the back of a short, unscheduled, but strong trading update. The firm has announced that it now expects underlying profit before tax for FY2027 to be between £55 million to £65 million, ahead of the current market consensus of £52.6 million (with a range of £48.9 million to £55.1 million). At the top end, that’s some 24% ahead of consensus.
Halfords, which was promoted to the FTSE 250 at the last reshuffle in July, is the UK’s leading provider of motoring and cycling services and products. It operates via 370 Halfords stores, two Performance Cycling stores (trading as Tredz), 496 consumer garages, a network of 92 commercial fleet locations nationwide, as well as online. Through its subsidiary Avayler, Halfords also sells a bespoke, internally developed SaaS solution to clients in the USA and Australia.
Today’s trading update added that the firm has continued to outperform over recent months. This reflects momentum in the underlying business as it continues to deliver against its strategic priorities. Also, there has been a very strong performance in seasonal categories, in part reflecting the unusually warm summer weather. The company estimates that this heightened seasonal demand has resulted in incremental profit in the mid-single digit millions of pounds.
Given the strong performance in the financial year so far, Halfords expects the annual performance to be further weighted towards H1, with a further acceleration of investment in technology and marketing being made in the second half.
Halfords 5-year share price chart
This update follows a solid set of results for the 53-week period ended 3rd April 2026, with the comparative period being the 52 weeks to 28 March 2025. Highlights included underlying profit before tax increasing by 4.1% to £45.4 million (on a 52 week basis) and 53-week free cash flow of £33.3 million, with net cash of £19.1 million at 3rd April 2026.
These figures prompted the firm to recommend a final dividend of 6.0p per share, increasing the total FY26 dividend by 0.2p to 9.0p. The decision was based on improved profitability and the dividend cover-based policy of 1.5x to 2.5x underlying profit after tax. That gives a historic yield of 3.35% at the current share price.
Halfords is currently implementing its “Fit for the Future” strategy, which is in three phases:
Optimise, maximise value from existing assets and operations, driving improved returns by focusing on operational excellence and execution of the basics.
Evolve, once the optimisation agenda has been delivered the firm will look to invest in opportunities to drive structural efficiencies and future growth.
Scale, where with an optimised and strengthened business, Halfords will look to scale digital channels in Retail and an expanded network of garages in Autocentres on a 3-year plus timeframe.
Investors will likely get another update on performance against the strategy when the firm releases another trading update, for the first half to 2nd October, on 21st October.
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Disclosures
Halfords is not a corporate client of Optimo Research Ltd.
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