Halfords Group plc, 2013 Earnings Call, May 23, 2013

Halfords Group plc announced consolidated earnings results for the 52 weeks ended March 31, 2013. For the period, the company reported revenue of £871.3 million compared to £863.1 million a year ago. Results from operating activities were £77.1 million compared to £99.1 million a year ago. Profit before income tax was £71.0 million compared to £94.1 million a year ago. Profit for the financial period attributable to equity shareholders was £52.7 million compared to £68.4 million a year ago. Diluted earnings per share were 26.9 pence compared to 34.0 pence a year ago. Net cash from operating activities was £93.5 million compared to £89.7 million a year ago. Purchase of property, plant and equipment was £16.7 million compared to £17.2 million a year ago. Purchase of intangible assets was £3.7 million compared to £2.1 million a year ago. Net debt was £110.6 million compared to £139.2 million a year ago. Retail EBIT was £73.6 million. CapEx of over £20 million was in line with guidance of up to £25 million. The company provided capital expenditure guidance for 2014, 2015 and 2016 and earnings guidance for 2014. Now over the 3-year period of the plan, the company going to be investing about £100 million in retail capital expenditure, which is about £40 million more than previous guidance and about £50 million of that, so the total is going to be targeted directly at stores. Total retail CapEx will be around £32 million, with Autocentres CapEx at £6 million. Autocentres EBITDA is expected to be marginally ahead of the fiscal year 2013 performance, with further growth in fiscal year 2015 and fiscal year 2016. For 2014, focusing on the more cash relevant measure of EBITDA margin, on average, the company anticipates a low double-digit percentage, driven by sales, cash gross margin and the OpEx investments outlined earlier. Below EBIT, the net finance costs are expected to be marginally lower than in fiscal year 2013, including the impact of the refinancing process. Effective tax is likely to be in the range of 23% to 24%, and this is not affected by the potential one-off tax payment of around £20 million referred to earlier.

Halfords Group plc announced the new management team is taking shape. Rob Swyer was appointed as Retail Director, David Durie as Marketing Director, Anna Barsby as IT Director and, most recently, Emma Fox as Commercial Director.