As the bicycle and automotive products retailer recover from “extremely challenging conditions,” Halfords anticipates a rise in sales and profit in the midterm.

During the pandemic, business was booming, but in the past year, the company has been under pressure due to rising inflation and declining consumer confidence.

Before today’s capital markets day presentation, Halfords stated that it anticipates annual sales to increase to approximately £1.9billion, up from £1.6billion in its previous fiscal year, and pre-tax profit to increase to £90million to £110million, from £50million to £60million.

Investors were informed, “We expect to deliver this growth through a combination of our core markets recovering from the current very challenging conditions, growing market share by leveraging the unique platform we have built, the maturation of our acquisition synergies, and the use of scaled and rich customer and vehicle data to drive customer lifetime value.”

In the mid-to long-term, the group anticipates an increase in sales to approximately £2.2 billion and an increase in pre-tax profit to between £130 million and £150 million.

It stated that it would achieve this by expanding into additional segments of the automotive market, such as the servicing of electric vehicles, vans, scooters, and bicycles, and by expanding its Autocentres garage business.

It also announced a dividend of 10 pence per share for the most recent fiscal year.

Tuesday morning trading saw a 7 percent increase in Halfords shares to 190p, although they are still down approximately a quarter from a year ago.

In January, the shares fell 20% after Halfords lowered its profit forecast due to a decline in demand for automotive and cycling products.

It reported protracted weakness in the consumer tire market and anticipated a steeper decline in demand for more expensive retail items.

Graham Stapleton, however, stated today that the group anticipates “significant potential” for future development.

‘Since 2018, we have doubled the scale of our B2B and services business and grown to become the largest motoring services provider in the United Kingdom,’ he told investors.

From this vantage point, we foresee significant future development potential for both our existing business and adjacent markets.