Halfords Group plc (HLFDF) Q2 2019 Earnings Call

Investor webinar replay

Replay transcript excerpt

and welcome to the Halfords Group Interim Results, a presentation for FY19. It's good to see some familiar faces from our Capital Markets Day and the various investor meetings we've held over the 10 months since I joined. I remain very positive about Halfords' future and the significant opportunities to further differentiate our business for customers. Let's begin by having a look at the agenda. I will start by covering the highlights of the first half, I will then give a brief recap of our new strategy and share some of the early progress we've already made. Adam will then take you through the financial results for half one and the outlook for the full year before I summarise. I'm also delighted to introduce Lorraine Woodhouse who started last week as our new CFO. Lorraine will say a few words later on and there will be an opportunity for you to meet her over coffee at the end. Let's start by looking at the financial highlights from the first half. Group revenue was up 2.5% on a light for light basis, with retail plus 2.3% and auto centres plus 3.3%. This is a robust performance in light of what we all know is a challenging UK retail environment. In half one, we saw the first increase in gross margin for several years at 90 basis points in retail. Underlying profit before tax was broadly in line with our expectations and reflected planned operating cost growth, primarily driven by phasing, one-off items and investments. Adam will take you through the detail of this later. Cash generation continued to be strong in the first half. Free cash flow, one of our new medium-term financial targets, was up 10% for the period compared to last year. Net debt reduced to 0.7 times underlying EBITDA and the Board has approved an increase of 3% in the interim dividend, reflecting t...