Halfords Group plc

Welcome to the Halford Group results for the 53 weeks ending the 3rd of April 2026. I'm Henry Birch, the Chief Executive of Halfords and joining me today is Jo Hartley, our Chief Financial Officer. In terms of today's presentation, I wanted to start with some initial reflections on the year. We'll then take you through progress on our strategy and Joe will take you through the detail of our financial results, I'll then give you an overview of current trading and our outlook, and we'll close today's session with the opportunity for Q&A. So starting with some reflections on FY26, I'm really pleased to be announcing a very strong set of results. We've delivered strong like-for-like sales growth at 4.8%, We've grown our gross margin rate to its highest level in a decade at 52.8%. Our underlying PBT performance is at the top end of consensus forecasts and we've delivered another impressive cash flow performance with strong free cash flow, net cash on our balance sheet and an increase in our dividend. We've also seen the momentum of FY26 carry over into the current year with strong trading in April, May and June resulting in us guiding to the top end of analyst consensus for FY27. If we look at the wider context, FY26 was a year in which we refocused the business and reset our agenda for the years ahead. We've made a number of key hires into our leadership team. I joined the business about 14 months ago. Adam Pay joined as managing director of garages. Jess Frame joined as our managing director of retail. And more recently, Sarah Haywood joined as our CIO. In November, we laid out a strategic framework with three sequential phases of optimize, evolve, and Scale. And while it's early days we have made great progress in the optimised phase of our plan so far with a laser focus on execution, cutting out noise and demonstrating tangible progress. And this progress has played a part in delivering the strong financial performance we're reporting today. We feel passionately that as a specialist retailer and services provider It is the advice and service advantage which our colleagues bring which gives us a competitive advantage that others can't match. It was important to me that this was reflected in our purpose and I wanted to show a short film that we made to launch this new purpose to our colleagues.

We're Halfords. We've always been there, keeping you going. The same helpers that helped your grandfather with his flat tire. The same helpers that ensured you made it to the seaside every year. We're the hands that tighten the bolts. The voices that reassure. The helpers who never stand still. From your first bike to your new bike. Your first car to your new EV. We're the first to help you start and the first you turn to when things stall. We're there when it matters most. We don't just fix cars and bikes. We keep school runs running, commutes on course, weekends winning. We keep the nation moving. Every light that shines, every wheel that turns, every engine that starts, we're there. Hands-on experts who love to help. Because helping isn't an add-on, it's who we are. It's the extra mile, the friendly chat, the job done right. It's fixing the little things that make the big things possible. From workshop to high street, van to bike, north to south, we are the quiet engine of everyday life. And we are the hard work behind every easy journey. We serve with heart, solve with skill, So as I said, that purpose

we keep the nation moving with Trusted Experts who love to help really encapsulates Halfords but also articulates our competitive advantage as a specialist retailer and services provider. So now turning to strategic progress we've made as we started to deliver the optimised phase of our fit for the future plan and I'm very pleased with what we've achieved so far. To my mind the potential for Halfords has never been in doubt but we've not always fulfilled that potential. Driving some of our strategic focus has been an element of self-reflection and candour as to what we've failed to do in the past, what we've dubbed home truths. We laid these out in November of last year and I won't dwell on them now but they have both guided our strategy and sharpened the outcomes we're looking to achieve. We're also clear on the need for discipline as to how we deploy capital and have articulated our clear guardrails for the business. I'm pleased that we've made good progress with these outcomes, driving sales, margin, profit and our returns on capital whilst remaining firmly within our guardrails. And we have every intention and confidence that we will continue to drive that performance and that discipline. We've been clear Our optimised programme touches every part of the business and we revisit here some of our priority work streams. All of these are underway, but as you would expect, they're at different stages of maturity. Today we'll focus predominantly on the improvements we've made in garages, both through fusion and in the rest of the estate, which have improved utilisation and consequently operating margin in the auto centre segment. In retail, we spent the last few months focusing on laying the foundations for our new category management approach and are deploying a test and learn approach across a select few categories ahead of a scaled rollout later in FY27. As such, our Interims presentation in November will focus more on the retail aspects of our optimised plan. And across the group, We're investing in digital and AI in our brand and our loyalty proposition. So starting with retail and category management. Category management is by no means a new concept in retail but it's worth pausing and explaining exactly what it entails and why as an approach it is relevant for Halfords. In recent history Halfords has been set up more with a buyer-led model. Under our new approach, a category manager has end-to-end responsibility for their category, sitting over range, range selection, pricing, promotions, supplier relationships, channel strategy and sales, and margin performance. It demands a focus on customer and competitor insight, and it's an approach I saw yield real benefits at my previous business. Our emphasis in the last few months has been on making sure we have the right structure and capability to deliver this new model. I'm confident that we now have the right team in place. We've also relaunched four important categories, workshop, car cleaning, flagship cycling and cycling parts and accessories or PACs. and are trialling a range of in-store and digital innovations designed to improve customer journeys to these products. Taking workshop as an example, workshop is a category which incorporates tools, cabinets, workstations and the like and serves both trade customers and auto enthusiasts. We see an opportunity both in better targeting of trade customers and developing our product range, particularly at the advanced and professional end of things. And we also believe we can drive sales by better articulating feature benefits and improving how we lay out and sell product both in-store and online. We are early in our category management journey and given the extent of change required from range review all the way through to product arriving on the shelves, Implementing our new approach in a single category can take around nine months. We look forward to providing a more detailed update in November and expect to see the benefits materialising in the second half of the year. But I wanted to take the opportunity to talk a bit more about cycling, which is something we haven't done for a while. But cycling was a particular bright spot for the group in terms of sales growth in FY26, with the market showing good signs of recovery and the Halfords and Treads proposition driving share growth against that backdrop. As we talked about before, we are the clear market leader in cycling. More than half of all bikes sold in the UK come from Halfords. We operate the nation's biggest network of cycling showrooms and we also operate the largest cycles to work scheme nationally. Our growth in motoring means that cycling now generates a smaller proportion of group sales, around 20%, but it remains core to our business and an important source of profitable growth in the years ahead. Under the leadership of a new cycling director, we are bringing Halfords and Treads businesses closer together, starting with offering Click and Collect for Treads performance cycling products through a small number of Halfords stores. We're also trialling a new flagship cycling concept in 19 stores, incorporating locally curated ranges, improved layouts and labelling and enhanced technical training for colleagues. It's worth reiterating that we don't just sell bikes, we design and build them. Consequently, Halford Cycling has very high own brand penetration through the likes of Apollo and Carrera and Boardman. Just a few weeks ago, we sold our millionth Carrera Vengeance, making it the UK's best selling bike of all time. And our Boardman range continues to win accolades and awards for delivering premium bikes at more affordable prices. Looking ahead to FY27, we're particularly excited by the arrival of our new e-bike ranges, which I saw earlier this week. I have to say they are amazing. and a massive step up from the previous range in terms of performance and styling but at a similar price point to the old range. We see significant potential in growing e-bikes where our share currently under indexes versus the wider bike share that we have. And we also look forward to working more closely with the Bicycle Association on their e-bike positive quality and safety accreditation across our whole range. So now turning to garages. On the garages side of our business, Fusion has been a well-documented success, driving both profit growth and improved customer and colleague experience. We have a well-rehearsed formula that's delivered consistent returns and when we complete the program at the end of this year we expect to have converted 138 garages to our fusion concept. But our garage improvement program doesn't stop with fusion and there are opportunities to drive performance across the rest of our garage estate. Fusion is giving us a huge amount of experience and data to inform how we can put capital to work effectively and efficiently in our physical estate with confidence that in future years we can take the strongest elements of the fusion program and roll them out at much lower cost across the rest of our estate while still driving good returns and remaining within our capital guardrails. In addition, investment in new equipment and technology and in skills and leadership help underpin We're already starting to see some of this through the operational improvements we've been making to drive improved utilisation across all 500 of our garages over the last year. Utilisation is ultimately about matching demand with labour and hours worked and we've been laser focused in regularly reviewing productivity on the individual garage level to redeploy technicians to the locations where they can best support growth in sales. The chart here shows year-on-year progress for both Q1 and Q4, looking at the cost of labour as a percentage of sales, the number of hours worked and overall sales. In Q1, we obviously faced the immediate impact of national insurance and minimum wage hikes, but by Q4, even with these cost increases, We had reduced year on year the cost of labour as a percentage of sales, a key utilisation metric. Our consumer garages grew light for light sales by more than 8% in FY26, supported by an increase in additional work identified and higher income per tyre, due in part to our new Hunter wheel alignment technology. While the tyre market continued to decline in FY26, It shows some signs of stabilization towards the end of the year and the investments we're making in garage leadership and more modern equipment are allowing us to outperform the wider market. And at the same time as driving increased sales and profitability, we're also seeing really positive feedback from our customers. Our lifetime Google score has increased from 3.9 to a very credible 4.5 with our weekly averages surpassing this level. I appreciate that some of this can seem quite abstract so I wanted to share a short video featuring Adam and some of his team lifting the lid on all the great work going on across our garage network. So welcome to our Halfords Network and our garages.