Halfords shares surge as profits leap in Covid 19 cycling boom

Halfords' share price rocketed 15% today as the group reported surging profits after a leap in demand for bicycles and bike supplies through the Covid 19 pandemic.

As commuters and families have left public transport to travel on two wheels, the cycle and car parts giant has seen business boom.

The group had already reported on thriving sales in September as quarantine-fearing Brits holidayed in the UK rather than travelling abroad. That had led them to spend more on bikes and car parts and accessories.

It warned then that the strong sales trend could peter out after the holiday season. However, today it said that had been far from the case, with like-for-like sales in the five weeks to 25 September 22% up on the previous year. Included in that was a 46% surge in bikes and cycling equipment.

Halfords has been able to secure new supplies of bikes where many rivals have been unable to, leading to long waiting lists and frustrated customers.

Halfords said it now expected profits for the first half of the year to come in at more than £55 million before tax. Previously it had predicted £35 million - £40 million.

However, the company cautioned that the second half of the year was less predictable. "The potential impact of second waves of Covid 19 now seems more pronounced than just a few weeks ago, and the economic impact of an end to the furlough scheme and the outcome of Brexit negotiations remains very uncertain."

Halfords said demand for its mobile car servicing business had been "exceptional".

Analysts at stockbroker Liberum upgraded its full year profit forecasts by 48%, after what it described as "the last five weeks' massive improvements to trading."

"We think the shares remain very cheap but should re-rate handsomely after this encouraging update," it added.

In early trading, Halfords shares surged 16%.