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Annual Report and Accounts for the Year Ended 29 March 2019

Halfords is the UK's leading provider of motoring and cycling products and services.
Through Halfords Autocentres, it is also one of the UK's leading independent operators in vehicle servicing, maintence and repairs.

Halfords in Numbers

Retail stores

Autocentres

Cycle Republic

Tredz stores

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Group Highlights

Revenue (£m)

+0.3%

Revenue

Underlying Profit Before Tax

-17.9%

Underlying profit before tax

Profit Before Tax

-24.0%

Profit before tax

Dividend Per Ordinary Share

+3.0%

Dividend Per Ordinary Share

Underlying Basic Earnings Per Share

-17.2%

Underlying Basic Earnings Per Share

Basic Earnings Per Share

-23.7%

Basic Earnings Per Share

Revenue £m

+0.3%

Underlying profit before tax

+17.9%

Profit before tax

-23.7%

Dividend Per Ordinary Share

+3.0%

Profit before tax, after non-recurring items

-23.7%

75%

Group revenue matched to customers

24%

Total Group sales which are srevice-related

83%

of Halfords.com online orders click and collected in-store

80

In-store Retail services across motoring and cycling

0.8:1

Net debt to Underlying EBITDA ratio

20%

Group revenue from online sales

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Chairman's Statement

This is a business that has good foundations, a strong heritage and market leading positioning in many of its categories.
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Chief Executive Statement

Since launching our new strategy, we have seen encouraging early progress. As we strengthen our unique services proposition, customers are responding positively, and we are particularly pleased that nearly a quarter of all Halfords sales are now service-related.
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Our Strategy

To inspire and support a lifetime of motoring and cycling

Inspire our customers through a differentiated, super specialist shopping experience.

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Support our customers through an intergrated, unique and more convenient services offer

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Enable a Lifetime of motoring and cycling through a customer-led action culture.

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Our Marketplace

Halfords operates in two distinct markets – motoring and cycling – selling products and services across the UK and Republic of Ireland.

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Our Business Model

Effective utilisation of our resources and relationships are an integral part of our plan to drive long-term sustainable growth.

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Corporate Social Responsibility

Halfords Group signed the Armed Forces Covenant in February 2019

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Corporate Social Responsibility

Our Work Continues to Support Offenders

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Bikeability

Corporate Social Responsibility

Partnership with the Bikeability Trust

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Re-cycle

Corporate Social Responsibility

Creating an "Africa unlimited by transport"

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Our Corporate Governance

Our Principal Risks and Uncertainties

Investment Case

1

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

2

Operating in established markets

Halfords has a strong position in well established markets with good long-term growth prospects. Our growth in key markets, such as E-Bikes, is well above the market rate, strengthening our position as market leaders as we gain share from our competitors. Through innovation, new products and new services, the markets in which we operate are continuing to grow. Continued investment in these means we are able to remain relevant to our customers.

3

Strong balance sheet and cash generative

Halfords Group ends the year in a strong financial position with a healthy balance sheet and remains cash generative. Free Cash Flow, in line with our medium-term financial targets, remains in growth in the year.

4

Consistent dividend returns

Our strong financial position has meant that Halfords has consistently maintained its progressive dividend policy, with 3% growth in the ordinary dividend per year. The growth in Free Cash Flow in the year, continues to support the dividend.

5

Net Debt

Group Net Debt of 0.85 EBITDA in FY19, remains below the 1.05 target. This target ranges up to 1.55 for appropriate M&A

Scaled and Growing Business

Halfords has 797 locations in the UK; from Retail stores, to Autocentres, Performance Cycling stores and our fleet of Halfords Mobile Expert vans. We continue to invest in our business, both the physical and online estate, ensuring that we are fit for the future and making us even more relevant and convenient for our customers.

Operating in established markets

Halfords has a strong position in well established markets with good long-term growth prospects. Our growth in key markets, such as E-Bikes, is well above the market rate, strengthening our position as market leaders as we gain share from our competitors. Through innovation, new products and new services, the markets in which we operate are continuing to grow. Continued investment in these means we are able to remain relevant to our customers.

Strong balance sheet and cash generative

Halfords Group ends the year in a strong financial position with a healthy balance sheet and remains cash generative. Free Cash Flow, in line with our medium-term financial targets, remains in growth in the year.

Consistent dividend returns

Our strong financial position has meant that Halfords has consistently maintained its progressive dividend policy, with 3% growth in the ordinary dividend per year. The growth in Free Cash Flow in the year, continues to support the dividend.

Net Debt

Group Net Debt of 0.85 EBITDA in FY19, remains below the 1.05 target. This target ranges up to 1.55 for appropriate M&A

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