Half Yearly Report (Part 2)

RNS Number : 6340R

Halfords Group PLC

21 November 2012

 



HALFORDS GROUP PLC

Condensed consolidated income statement

For the 26 weeks to 28 September 2012

		26 weeks to		26 weeks to		52 weeks to
		28 September		30 September		30 March
		2012		2011		2012
		Unaudited		Unaudited
	Notes	£m		£m		£m
Revenue	6	455.6		454.0		863.1
Cost of sales		(209.3)		(207.5)		(390.3)
Gross profit		246.3		246.5		472.8
Operating expenses		(201.8)		(189.6)		(375.6)
Operating profit before non-recurring items		44.5		56.9		97.2
Non-recurring operating income	7	0.5		-		1.9
Results from operating activities		45.0		56.9		99.1
Finance costs	8	(2.7)		(2.7)		(5.5)
Finance income	8	0.1		0.5		0.5
Net finance costs		(2.6)		(2.2)		(5.0)
Profit before tax and non-recurring items		41.9		54.7		92.2
Non-recurring operating income	7	0.5		-		1.9
Profit before tax		42.4		54.7		94.1
Income tax on recurring items	9	(10.4)		(14.7)		(24.8)
Income tax on non-recurring items	7	(0.1)		(0.2)		(0.9)
Profit for the period attributable to equity shareholders		31.9		39.8		68.4
Earnings per share
Basic earnings per share	11	16.4p		19.7p		34.2p
Diluted earnings per share	11	16.4p		19.7p		34.0p
Basic earnings per share before non-recurring items	11	16.2p		19.8p		33.7p
Diluted earnings per share before non-recurring items	11	16.2p		19.7p		33.5p

A final dividend of 14.00 pence per share for the 52 weeks to 30 March 2012 (2011: 14.00 pence per share) was paid on 3 August 2012.  The directors have approved an interim dividend of 8.00 pence per share in respect of the 26 weeks to 28 September 2012 (2011: 8.00 pence per share).

HALFORDS GROUP PLC Condensed consolidated statement of comprehensive income For the 26 weeks to 28 September 2012
		26 weeks to		26 weeks to		52 weeks to
		28 September		30 September		30 March
		2012		2011		2012
		Unaudited		Unaudited
		£m		£m		£m
Profit for the period		31.9		39.8		68.4
Other comprehensive income
Foreign currency translation differences for foreign operations		-		-		(0.5)
Cash flow hedges:
Fair value changes in the period		0.6		1.8		(0.9)
Transfers to inventory		(0.1)		2.2		1.3
Transfers to net profit:
Cost of sales		0.2		(1.0)		(0.2)
Income tax on other comprehensive income		(0.2)		(1.1)		(0.3)
Other comprehensive income for the period, net of income tax		0.5		1.9		(0.6)
Total comprehensive income for the period attributable to equity shareholders		32.4		41.7		67.8

HALFORDS GROUP PLC Condensed consolidated statement of financial position For the 26 weeks to 28 September 2012
		26 weeks to	26 weeks to	52 weeks to
		28 September	30 September	30 March
		2012	2011	2012
	Notes	Unaudited	Unaudited
Assets		£m	£m	£m
Non-current assets
Intangible assets	12	342.8	345.7	343.9
Property, plant and equipment	12	91.4	98.5	97.9
Total non-current assets		434.2	444.2	441.8
Current assets
Inventories		132.9	153.3	146.7
Trade and other receivables		53.3	43.5	45.0
Derivative financial instruments		0.1	2.1	0.3
Cash and cash equivalents	13	28.5	4.8	13.4
Total current assets		214.8	203.7	205.4
Total assets		649.0	647.9	647.2
Liabilities
Current liabilities
Borrowings	13	(29.2)	(28.9)	(2.8)
Derivative financial instruments		(1.0)	(0.1)	(1.5)
Trade and other payables		(153.9)	(145.9)	(140.4)
Current tax liabilities		(27.1)	(24.8)	(24.8)
Provisions		(8.4)	(10.5)	(8.8)
Total current liabilities		(219.6)	(210.2)	(178.3)
Net current assets		(4.8)	(6.5)	27.1
Non-current liabilities
Borrowings	13	(107.2)	(116.6)	(149.8)
Accruals and deferred income - lease incentives		(27.9)	(27.2)	(28.8)
Provisions		(1.9)	(6.2)	(2.5)
Deferred tax liabilities		(0.3)	(0.4)	(0.7)
Total non-current liabilities		(137.3)	(150.4)	(181.8)
Total liabilities		(356.9)	(360.6)	(360.1)
Net assets		292.1	287.3	287.1
Shareholders' equity
Share capital	14	2.0	2.0	2.0
Share premium account	14	151.0	151.0	151.0
Investment in own shares		(14.0)	(18.6)	(14.0)
Other reserves		0.1	1.6	(0.4)
Retained earnings		153.0	151.3	148.5
Total equity attributable to equity holders of the Company		292.1	287.3	287.1

Company No. 04457314

HALFORDS GROUP PLC

Condensed consolidated statement of changes in equity

For the 26 weeks to 28 September 2012

For the period ended 30 September 2011 (Unaudited)

	Attributable to the equity holders of the Company
				Other reserves
		Share	Investment		Capital
	Share capital	premium account	in own shares	Translation reserve	redemption reserve	Hedging reserve	Retained earnings	Total equity
	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 1 April 2011	2.1	151.0	(0.6)	0.5	0.2	(0.6)	169.8	322.4
Total comprehensive income for the period
Profit for the period	-	-	-	-	-	-	39.8	39.8
Other comprehensive income
Foreign currency translation differences for foreign operations	-	-	-	(0.5)	-	-	-	(0.5)
Cash flow hedges:
Fair value changes in the period	-	-	-	-	-	1.8	-	1.8
Transfers to inventory	-	-	-	-	-	2.2	-	2.2
Transfers to net profit:
Cost of sales	-	-	-	-	-	(1.0)	-	(1.0)
Tax on other comprehensive income	-	-	-	-	-	(1.1)	-	(1.1)
Total other comprehensive income for the period net of tax	-	-	-	(0.5)	-	1.9	39.8	41.2
Transactions with owners, recorded directly in equity
Share options exercised	-	-	-	-	-	-	-	-
Share-based payment transactions	-	-	-	-	-	-	1.2	1.2
Purchase of own shares	(0.1)	-	(18.0)	-	0.1	-	(31.0)	(49.0)
Income tax on share-based payment transactions	-	-	-	-	-	-	-	-
Dividends to equity holders	-	-	-	-	-	-	(28.5)	(28.5)
Total transactions with owners	(0.1)	-	(18.0)	-	0.1	-	(58.3)	(76.3)
Balance at 30 September 2011	2.0	151.0	(18.6)	-	0.3	1.3	151.3	287.3

HALFORDS GROUP PLC

Condensed consolidated statement of changes in equity (continued)

For the 26 weeks to 28 September 2012

For the period ended 28 September 2012 (Unaudited)

                                                                                                    Attributable to the equity holders of the Company

					Other reserves
		Share	Investment	Capital
	Share capital	premium account	in own shares	redemption reserve		Hedging reserve	Retained earnings	Total equity
	£m	£m	£m	£m		£m	£m	£m
Balance at 30 March 2012	2.0	151.0	(14.0)	0.3		(0.7)	148.5	287.1
Total comprehensive income for the period
Profit for the period	-	-	-	-		-	31.9	31.9
Other comprehensive income
Foreign currency translation differences for foreign operations	-	-	-	-		-	-	-
Cash flow hedges:
Fair value changes in the period	-	-	-	-		0.6	-	0.6
Transfers to inventory	-	-	-	-		(0.1)	-	(0.1)
Transfers to net profit:
Cost of sales	-	-	-	-		0.2	-	0.2
Tax on other comprehensive income	-	-	-	-		(0.2)	-	(0.2)
Total other comprehensive income for the period net of tax	-	-	-	-		0.5	31.9	32.4
Transactions with owners, recorded directly in equity
Share options exercised	-	-	-	-		-	-	-
Share-based payment transactions	-	-	-	-		-	0.7	0.7
Purchase of own shares	-	-	-	-		-	(0.9)	(0.9)
Income tax on share-based payment transactions	-	-	-	-		-	-	-
Dividends to equity holders	-	-	-	-		-	(27.2)	(27.2)
Total transactions with owners	-	-	-	-		-	(27.4)	(27.4)
Balance at 28 September 2012	2.0	151.0	(14.0)	0.3		(0.2)	153.0	292.1

HALFORDS GROUP PLC Condensed consolidated statement of cash flows For the 26 weeks to 28 September 2012
		26 weeks to	26 weeks to	52 weeks to
		28 September	30 September	30 March
		2012	2011	2012
		Unaudited	Unaudited	Unaudited
	Notes	£m	£m	£m
Cash flows from operating activities
Profit after tax for the period before non-recurring items		31.5	40.0	67.4
Non-recurring items		0.4	(0.2)	1.0
Profit after tax for the period		31.9	39.8	68.4
Depreciation - property, plant and equipment		10.7	10.4	21.1
Amortisation - intangible assets		2.6	2.6	4.9
Foreign exchange (gain)/loss		-	(0.5)	(0.5)
Net finance costs		2.6	2.2	5.0
Loss on disposal of property, plant and equipment		0.4	0.3	1.2
Equity settled share based payment transactions		0.7	1.2	2.4
Fair value (gain)/loss on derivative financial instruments		0.5	(1.1)	(0.9)
Income tax expense		10.5	14.9	25.7
(Increase)/decrease in inventories		13.8	(5.7)	0.9
(Increase)/decrease in trade and other receivables		(8.4)	(1.4)	(3.0)
Increase in trade and other payables		14.5	4.0	0.2
(Decrease)/increase in provisions		(1.0)	(1.2)	(6.6)
Finance income received		0.2	0.5	0.4
Finance costs paid		(2.2)	(2.7)	(4.9)
Income tax paid		(8.8)	(14.3)	(24.6)
Net cash from operating activities		68.0	49.0	89.7
Cash flows from investing activities
Acquisition of subsidiary undertaking net of cash acquired		-	-	(0.7)
Purchase of intangible assets		(1.6)	(1.6)	(2.1)
Purchase of property, plant and equipment		(6.5)	(7.0)	(17.2)
Net cash used in investing activities		(8.1)	(8.6)	(20.0)
Cash flows from financing activities
Net proceeds from issue of ordinary shares		-	-	2.1
Purchase of own shares		(0.9)	(49.0)	(62.7)
Proceeds from loans, net of transaction costs		97.0	193.0	353.0
Repayment of borrowings		(140.0)	(175.0)	(302.1)
Payment of finance lease liabilities		(0.1)	(0.1)	(0.3)
Dividends paid to shareholders		(27.2)	(28.5)	(44.2)
Net cash used in financing activities		(71.2)	(59.6)	(54.2)
Net (decrease)/increase in cash and bank overdrafts	13	(11.3)	(19.2)	15.5
Cash and cash equivalents at the beginning of the period	13	10.9	(4.6)	(4.6)
Cash and cash equivalents at the end of the period	13	(0.4)	(23.8)	10.9

HALFORDS GROUP PLC

Notes to the condensed consolidated interim financial statements

For the 26 weeks to 28 September 2012

 

1.     General information

The consolidated financial statements of the Halfords Group plc (the "Company") comprise the Company together with its subsidiary undertakings (the "Group").

The Company is a limited liability company incorporated, domiciled and registered in England and Wales. Its registered office is Icknield Street Drive, Washford West, Redditch, Worcestershire, B98 0DE.

The Company is listed on the London Stock Exchange.

These condensed consolidated interim financial statements were approved by the Board of Directors on 20 November 2012.

2.     Statement of compliance

These condensed consolidated interim financial statements for the 26 weeks to 28 September 2012 have been prepared in accordance IAS 34 'Interim financial reporting' as endorsed by the European Union.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the 2012 Annual Reports and Accounts, which have been prepared in accordance with IFRSs as adopted by the European Union.

The comparative figures for the financial period ended 30 March 2012 are not the Group's statutory accounts for that financial period. Those accounts have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

3.     Risks and uncertainties

The Directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining 26 weeks of the financial year remain the same as those stated on pages 40 to 43 of our Annual Report and Accounts for the 52 weeks to 30 March 2012, which are available on our website www.halfordscompany.com.

The main areas of potential risk and uncertainty facing the business for the remainder of the financial year are those identified below:

Economic and market conditions

The economy is a major influence on consumer spending.  Trends in employment, inflation, taxation, consumer debt levels and interest rates impact consumer expenditure in discretionary areas. 

The Group constantly seeks to enhance its position as store of first choice in each of the markets that it serves. Halfords continues to invest in both its existing estate to ensure that it remains contemporary and in constant product innovation to meet customer needs. In addition, the Group's market-leading Wefit proposition provides a range of services at a lower cost to our customers than that provided by competitors.

Whilst many of the products that Halfords sell are non-discretionary in their nature and predicting future trends is difficult, Halfords reflects the latest independently sourced estimates in its internal plans.

Competition

The retail industry is highly competitive and dynamic.  The Group competes with a wide variety of retailers of varying sizes and faces competition from UK retailers, in both stores and on-line, as well as international operators. Failure to compete with competitors on areas including price, product range, quality and service could have an adverse effect on the Group's financial results.

We aim to have a broad appeal in price, range and store format in a way that allows us to compete in different markets and to use service as a point of differentiation in each market segment.  We have an established training infrastructure to ensure that our colleagues receive ongoing product and service training. We track performance against a broad range of measures that customers tell us are critical to their shopping experience, and monitor customer perceptions of ourselves to ensure we can respond quickly if required.

The Company adopts a granular approach to its wide-ranging cost control activities to ensure that significant opportunities for operational cost management are complimented by a culture of cost awareness.

4.     Significant accounting policies

As required by the Disclosure and Transparency Rules of the Financial Services Authority, the interim condensed consolidated financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the 2012 Annual Reports and Accounts, which are published on the Halfords Group website, www.halfordscompany.com.

There are no new standards, amendments to existing standards or interpretations that are effective for the first time for the current period that would be expected to have a material impact on the Group.

·     IFRS 9 'Financial Instruments'- addresses the classification, measurement and recognition of financial assets and financial liabilities;

·     IFRS 10 'Consolidated Financial Statements' - identifies the concept of control as the determining factor in whether an entity should be included within consolidated financial statements;

·     IFRS 11 'Joint Arrangements' - focuses on the rights and obligations of an arrangement rather than its legal form and classifies joint arrangements as either a joint operation or a joint venture;

·     IFRS 12 'Disclosure of Interests in Other Entities' - includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles; and

·     IFRS 13 'Fair Value Measurement' - provides a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs.

The Group has not early-adopted any of these new standards or amendments to existing standards. The Group will assess their full impact in due course. There are no other new standards, amendments to existing standards or interpretations that are not yet effective that would be expected to have a material impact on the Group.

5.     Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from those estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the 52 week period ended 30 March 2012 and the 26 weeks ended 30 September 2011.

6.     Operating segments

The Group has two reportable segments, Retail and Car Servicing, which are the Group's strategic business units. Car Servicing became a reporting segment of the Group as a result of the acquisition of Nationwide Autocentres on 17 February 2010. The strategic business units offer different products and services, and are managed separately because they require different operational, technological and marketing strategies.

The operations of the Retail reporting segment comprise the retailing of automotive, leisure and cycling products through retail stores. The operations of the Car Servicing reporting segment comprise car servicing and repair performed from autocentres.

The Chief Operating Decision Maker is the Executive Directors. Internal management reports for each of the segments are reviewed by the Executive Directors on a monthly basis. Key measures used to evaluate performance are Revenue and Operating Profit. Management believe that these measures are the most relevant in evaluating the performance of the segment and for making resource allocation decisions.  

The following summary describes the operations in each of the Group's reportable segments. Performance is measured based on segment operating profit, as included in the management reports that are reviewed by the Executive Directors.  These internal reports are prepared in accordance with IFRS accounting policies consistent with these Group Financial Statements. 

All material operations of the reportable segments are carried out in the UK and all material non-current assets are located in the UK.  The Group's revenue is driven by the consolidation of individual small value transactions and as a result Group revenue is not reliant on a major customer or Group of customers. All revenue is from external customers.

Income statement	Retail Unaudited £m	Car Servicing Unaudited £m	26 weeks to 28 September 2012 Total Unaudited £m	26 weeks to 30 September 2011 Total Unaudited £m
Revenue	393.0	62.6	455.6	454.0
Segment result before non-recurring items	42.0	3.3	45.3	58.0
Non-recurring items	0.5	-	0.5	-
Segment result	42.5	3.3	45.8	58.0
Unallocated expenses 1			(0.9)	(1.1)
Operating profit			44.9	56.9
Net financing expense			(2.5)	(2.2)
Profit before tax			42.4	54.7
Tax			(10.5)	(14.9)
Profit after tax			31.9	39.8

¹ Unallocated expenses have been disclosed to reflect the format of the internal management reports reviewed by the Chief Operating Decision maker and include an amortisation charge of (£0.9m) in respect of assets acquired through business combinations (2011: (£1.1m)).

Income statement	Retail £m	Car Servicing £m	52 weeks to 30 March 2012 Total £m
Revenue	752.3	110.8	863.1
Segment result before non-recurring items	92.8	6.6	99.4
Non-recurring items	1.9	-	1.9
Segment result	94.7	6.6	101.3
Unallocated expenses1			(2.2)
Operating profit			99.1
Net financing expense			(5.0)
Profit before tax			94.1
Taxation			(25.7)
Profit after tax			68.4

¹ Unallocated expenses have been disclosed to reflect the format of the internal management reports reviewed by the Chief Operating Decision maker and include an amortisation charge of (£2.2m) in respect of assets acquired through business combinations (2011: (£2.2m)).

Other segment items:	Retail Unaudited £m	Car Servicing Unaudited  £m	26 weeks to 28 September 2012 Total Unaudited £m	26 weeks to 30 September 2011 Total Unaudited £m
Capital expenditure	4.6	1.5	6.1	8.3
Depreciation expense	9.5	1.2	10.7	10.4
Amortisation expense	1.7	-	1.7	1.5

Other segment items:		Retail £m	Car Servicing £m	52 weeks to 30 March 2012 Total £m
Capital expenditure		15.2	4.5	19.7
Depreciation expense		19.1	2.0	21.1
Amortisation expense		2.7	-	2.7

Transactions between segments are on an arm's length. There are no material unallocated corporate expenses in the current or prior periods.

7.     Non-recurring items

	26 weeks to	26 weeks to	52 weeks to
	28 September         2012	30 September         2011	30 March       2012
	Unaudited	Unaudited
	£m	£m	£m
Non-recurring operating expenses:
Lease guarantee provision1	(0.5)	-	(1.9)
Tax on non-recurring items2	0.1	0.2	0.9
Non-recurring (income)/expense after tax	(0.4)	0.2	(1.0)

¹A non-recurring expense of £7.5m was incurred in 2011. This expense related to the creation of a provision for the potential liabilities arising from lease guarantees provided by Halfords prior to July 1989. The guarantees were provided to landlords of properties leased by Payless DIY (now part of Focus DIY) when both Halfords and Payless DIY were under ownership of the Ward White Group. Focus DIY entered into administration in May 2011. In the current year a change in approach to settling the Group's guarantor obligations has resulted in a release of £0.5m (2011: £1.9m) of the original amounts provided.

²The charge for the current period arises from a change in approach to settling the Group's guarantor obligations. 

8.     Net Finance Costs

	26 weeks to	26 weeks to	52 weeks to
	28 September         2012	30 September         2011	30 March       2012
	Unaudited	Unaudited
	£m	£m	£m
Finance costs:
Bank borrowings	(1.2)	(1.1)	(2.5)
Amortisation of issue costs on loans	(0.5)	(0.4)	(0.9)
Commitment and guarantee fees	(0.6)	(0.6)	(1.1)
Cost of forward foreign exchange contracts	-	(0.2)	(0.2)
Interest payable on finance leases	(0.4)	(0.4)	(0.8)
Finance costs	(2.7)	(2.7)	(5.5)
Finance income:
Bank and similar income	0.1	0.1	0.1
Other interest receivable	-	0.4	0.4
Finance income	0.1	0.5	0.5
Net finance costs	(2.6)	(2.2)	(5.0)

9.     Income tax expense

Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre tax income of the interim period.

The effective tax rate before non-recurring items for the 26 weeks to 28 September 2012 is 24.8% (2011: 26.9%). This rate differs from the UK corporation tax rate (26%) principally due to differences in overseas tax rates, other permanent differences arising in the period and the reassessment of prior year tax provisions.

The 2012 Budget on 21 March 2012 announced that the UK corporation tax rate will reduce to 22% by 2014. A reduction in the rate from 26% to 25% (effective from 1 April 2012) was substantively enacted on 5 July 2011, and further reductions to 24% (effective from 1 April 2012) and 23% (effective from 1 April 2013) were substantively enacted on 26 March 2012 and 3 July 2012 respectively.

This will reduce the Company's future current tax charge accordingly. It has not yet been possible to quantify the full anticipated effect of the announced further 1% rate reduction, although this will reduce the Company's future current tax charge accordingly.

10.  Dividends

During the period the Group paid a final dividend of 14.00 pence per share in respect of the 52 weeks to 30 March 2012 (2011: 14.00 pence per share), which absorbed £27.2m of shareholders' funds (2011: £28.5m).

The directors have approved an interim dividend of 8.00 pence per share for the 26 weeks to 28 September 2012 (2011: 8.00 pence per share), which is expected to be £15.5m (2011: £15.7m) and will be paid on 25 January 2013 to those shareholders on the share register at the close of business on 21 December 2012.

11.  Earnings Per Share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period. The weighted average number of shares excludes shares held by the Employee Benefit Trust and has been adjusted for the issue/repurchase of shares during the period.

For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the 26 weeks to 28 September 2012.

	26 weeks to	26 weeks to	52 weeks to
	28 September    2012	30 September    2011	30 March        2012
	Unaudited	Unaudited
	Number	Number	Number
	m	m	m
Weighted average number of shares in issue	199.1	204.7	203.8
Less: shares held by the Employee Benefit Trust	(4.9)	(3.0)	(3.9)
Weighted average number of shares for calculating basic earnings per share	194.2	201.7	199.9
Weighted average number of dilutive share options	0.2	1.0	1.0
Total number of shares for calculating diluted earnings per share	194.4	202.7	200.9

11.  Earnings Per Share (continued)

	26 weeks to	26 weeks to	52 weeks to
	28 September    2012	30 September    2011	30 March       2012
	Unaudited	Unaudited
	£m	£m	£m
Basic earnings attributable to equity shareholders	31.9	39.8	68.4
Non-recurring items:
Operating (income)/expenses	(0.5)	-	(1.9)
Tax charge on non-recurring items	0.1	0.2	0.9
Underlying earnings before non-recurring items	31.5	40.0	67.4
Basic earnings per share	16.4p	19.7p	34.2p
Diluted earnings per share	16.4p	19.7p	34.0p
Basic earnings per share before non-recurring items	16.2p	19.8p	33.7p
Diluted earnings per share before non-recurring items	16.2p	19.7p	33.5p

The alternative measure of earnings per share is provided because it reflects the Group's underlying performance by excluding the effect of non-recurring items.

12.  Capital Expenditure - Tangible and Intangible Assets

		Unaudited
		£m
Net book value at 1 April 2011		449.3
Additions		8.3
Disposals		(0.3)
Depreciation, amortisation, impairments and other movements		(13.1)
Net book value at 30 September 2011		444.2

		Unaudited
		£m
Net book value at 30 March 2012		441.8
Additions		6.1
Disposals		(0.4)
Depreciation, amortisation, impairments and other movements		(13.3)
Net book value at 28 September 2012		434.2

The Group is expected to spend approximately £20-£25m for the 52 weeks to 29 March 2013 (expenditure in the 52 weeks to 30 March 2012 was £19.7m). At 28 September 2012 the Group had capital expenditure contracted, but not provided for, of £1.3m (2011: £0.5m).

13.          Analysis of Movements in the Group's Net Debt in the Period

	At 1 April  2011	Cash flow	Other non-cash changes	At 30 September   2011
		Unaudited	Unaudited	Unaudited
	£m	£m	£m	£m
Cash in hand and at bank	(4.6)	(19.2)	-	(23.8)
Debt due after one year	(86.8)	(18.0)	(0.4)	(105.2)
Total net debt excluding finance leases	(91.4)	(37.2)	(0.4)	(129.0)
Finance leases due within one year	(0.3)	0.1	(0.1)	(0.3)
Finance leases due after one year	(11.5)	-	0.1	(11.4)
Total finance leases	(11.8)	0.1	-	(11.7)
Total net debt	(103.2)	(37.1)	(0.4)	(140.7)

	At 30 March  2012	Cash flow	Other non-cash changes	At 28 September   2012
		Unaudited	Unaudited	Unaudited
	£m	£m	£m	£m
Cash in hand and at bank	10.9	(11.3)	-	(0.4)
Debt due after one year	(138.6)	43.0	(0.5)	(96.1)
Total net debt excluding finance leases	(127.7)	31.7	(0.5)	(96.5)
Finance leases due within one year	(0.3)	0.1	(0.1)	(0.3)
Finance leases due after one year	(11.2)	-	0.1	(11.1)
Total finance leases	(11.5)	0.1	-	(11.4)
Total net debt	(139.2)	31.8	(0.5)	(107.9)

Non-cash changes comprise finance costs in relation to the amortisation of capitalised debt issue costs of £0.5m and changes in classification between amounts due within and after one year. Cash and cash equivalents at the period end consist of £28.5m of liquid assets and £28.9m of bank overdrafts.

14.  Share Capital

	Number of shares m	Share capital £m	Share premium account £m
As at 1 April 2011	212.0	2.1	151.0
Purchase of own shares - share buyback	(8.3)	(0.1)	-
As at 30 September 2011	203.7	2.0	151.0

	Number of shares m	Share capital £m	Share premium account £m
As at 30 March 2012	199.4	2.0	151.0
Purchase of own shares - share buyback	(0.3)	-	-
Shares issued - employee options	-	-	-
As at 28 September 2012	199.1	2.0	151.0

During the 26 weeks to 28 September 2012, the Group repurchased and cancelled 0.3m shares. During the 26 weeks to 30 September 2011 the Group repurchased 13.8m shares, of which 8.3m were cancelled and 5.5m were retained as treasury shares. The shares held in treasury will be used to meet options under the Company's share options schemes between 2011 and 2014.

 

Given the return to more normalised levels of gearing, the buyback programme was brought  to an end in the period and no further buyback activity is expected in the remainder of the financial year.

15.                  Contingent liability

The Group's banking arrangements include the facility for the bank to provide a number of guarantees in respect of liabilities owed by the Group during the course of its trading. In the event of any amount being immediately payable under the guarantee, the bank has the right to recover the sum in full from the Group. The total amount of guarantees in place at 28 September 2012 amounted to £3.7m.

The Group's banking arrangements are subject to a netting facility whereby credit balances may be offset against the indebtedness of other Group companies.

16.                  Seasonality

In general, the Group's results are not seasonal with revenue in the first half broadly similar to that of the second, however sales of certain products tend to fluctuate by season.  For example, sales of children's cycles peak in the Christmas season and sales of adult cycles tend to peak in the summer. 

17.          Related Party Transactions

There were no related party transactions during the 26 weeks to 28 September 2012.

Responsibility statement of the directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

• the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

Dennis Millard, Chairman

Andrew Findlay, Finance Director

20 November 2012

Independent Review Report to Halfords Group plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 September 2012 which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.

As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 September 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

GA Watts

For and on behalf of KPMG Audit Plc

Chartered Accountants
One Snowhill

Snow Hill Queensway

Birmingham

B4 6GH

20 November 2012

 

END

 

 

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