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LONDON (Alliance News) - Bike and car parts retailer Halfords Group PLC boosted its annual dividend Tuesday as it expanded revenue modestly in a tough market, despite profit suffering as costs rose.
For the year ended March 29, pretax profit narrowed 24% to GBP51.0 million from GBP67.1 million the year prior. This was despite revenue remaining broadly firm at GBP1.14 billion.
Profit performance was hurt by operating costs rising 4.8% to GBP524.6 million from GBP500.4 million the year prior. This was primarily due to an increase in selling & distributions costs as well as general administrative expenses.
Halfords Chief Executive Officer Graham Stapleton explained the firm had generated revenue growth "in what remains a challenging UK consumer environment".
"While motoring continued to be impacted by extremely mild weather conditions, we are pleased to have seen continued and sustained growth in cycling, underpinned by improvement in our exclusive own brand ranges," Stapleton added.
"Autocentres continued to perform well throughout the year, with strong sales growth, margin improvement year-on-year and good cost control," Stapleton continued. "This focus led to a second year of profit growth within the business."
Halfords proposed a 12.39 pence per share final dividend, up 3.0% from 12.03p the year prior. For the full year, the dividend rose 3.2% to 35.9p from 34.8p the year before.
"Consumer confidence remains fragile; however, we remain confident that the strength of our customer offer, our people, our strategy and clear focus on our medium-term financial targets leave us well-placed for long-term sustainable growth", Stapleton added.
For financial 2020, Halfords expects pretax profit to be "broadly" in line with that of financial 2019.
Shares in Halfords were 0.4% lower at 238.00 pence on Tuesday.
