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Halfords combines a trusted brand with leadership positions in attractive motoring and cycling markets. It operates a differentiated service-led, omnichannel proposition with unrivalled national scale: 85% of UK households are within 15 minutes of a store or garage. More than half of sales have a service component and around a third are to business customers, providing greater resilience through contracted, repeatable revenue streams. Halfords has a strong competitive moat and clear opportunities to drive sustainably profitable growth in the years ahead.

Halfords combines a broad range of motoring and cycling products with advice and practical support from our 12,500 knowledgeable colleagues. Customers can receive vehicle checks and have products fitted on-demand in our 370 stores, with more than 80% of the services we perform each year taking place in our retail store car parks. If customers have more complex servicing needs, these can be handled through our 496 garages or 250 Halfords Mobile Expert vans at a location of their choosing. This physical presence is an important source of competitive advantage which is reflected in the Group’s purpose: we keep the nation moving, with trusted experts who love to help.

Halfords’ capital allocation framework is designed to balance investment for long-term growth with financial resilience and shareholder returns. This prioritises maintaining a strong balance sheet, followed by investing in the existing business where there is a clear opportunity to generate a compelling return. Many investors are attracted by the dividend, which is subject to a policy that it is covered 1.5 to 2.5 times by underlying profit after tax. Beyond this, the Group will consider value accretive M&A once it reaches the ‘Scale’ phase of its strategy, and finally will return surplus capital to shareholders where appropriate. This disciplined approach provides the flexibility to respond to changing market conditions while allocating cash to the opportunities offering the best prospective returns.

The Halfords Group brings together retail, garages and B2B businesses under a strong and highly recognisable umbrella brand while sharing customers, data and infrastructure. The Retail business provides customers with a wide range of motoring and cycling products alongside a unique service and advice offering including fitting and WeFit vehicle checks, providing a pipeline of customers for the Garages business which generates service, maintenance, repair and tyre revenues from consumers and fleets. The synergies between the two businesses are magnified by the Fusion concept, which provides closer links for the physical Retail and Garage locations in a town in more than 100 locations, and Halfords Motoring Club, which drives customer loyalty and higher rates of cross-shop. The B2B business includes Fleet, Commercial Fleet Services, Cycle2Work and Trade Card, alongside Avayler. The strategic shift into services and B2B in recent years has resulted in a larger proportion of sales which are needs-based or contractual, and hence are less susceptible to volatility in the consumer environment.

Halfords’ Fit for the Future strategy is designed to unlock more value from the integrated platform built across Retail, Garages, mobile services and B2B. It has three overlapping phases: Optimise focuses on stronger execution; Evolve strengthens the capabilities needed for future growth; and Scale seeks opportunities to expand share and grow. As the business enters the Evolve phase of its plan, it will strengthen its use of technology and data, simplify operations and develop its proposition to drive more profitable customer behaviours. This will pave the way for the Scale phase, where the business will expand the highest returning elements of its offer, using the Group’s national network to reach more customers and take share. Opportunities include extending proven service formats, growing in underpenetrated market segments and selectively entering adjacent markets or pursuing value-accretive M&A.

Halfords holds leadership positions in attractive markets with a number of structural shifts underway, including changes in vehicle ownership and technology and evolving customer expectations and behaviours. The Group’s scale and financial firepower are enabling investment in the skills and equipment needed to service new vehicle types, which still require significant servicing work albeit focusing on different parts of the vehicle than for cars and vans with traditional combustion engines. Halfords’ retail services proposition, which includes product fitting and a range of vehicle checks, and the convenience offered by Halfords Mobile Expert undertaking tyres and services work at the customer’s home or workplace, are both of increasing relevance to the growing proportion of “Do It For Me” car owners. The Group’s ability to benefit from these long-term market developments position it for ongoing market share gains and future growth.

Halfords is a business with significant national scale, generating £45.4m of underlying profit before tax on £1.8bn of sales in FY26. Due to its significant store and garage estate and large number of employees, sales growth, gross margin and operational effectiveness are important factors to drive profitability. Profit growth has been muted in recent years due to very high cost inflation and a challenging consumer environment, which have been largely mitigated by a programme of significant cost savings to deliver a 4% increase in underlying PBT in each of the last two years.

More recently, there have been signs of recovery in the cycling and tyres markets and the Group’s Fit for the Future strategy is proving effective in delivering improved profitability in its early stages. In the Optimise phase, the Retail business is rolling out a new category management approach while improving its e-commerce and services proposition. Meanwhile the Garages business is delivering improved utilisation through a focus on operational effectiveness, and the Group is also investing in its brand. Analysts expect underlying profit before tax to grow to between £48.9m and £55.1m in FY27.

Halfords is a consistently cash generative business and generated £25.3m of free cash flow in FY26 (52-week basis), resulting in a balance sheet with £11.2m of net cash. Cash is generated by its Retail, Garages and B2B operations, supported by strong cash and working capital management. The resulting balance sheet strength provides resilience in challenging market conditions and gives the Group the flexibility to invest in high-returning projects while also paying a regular dividend to shareholders in-line with its stated capital allocation framework and dividend policy. In FY26 Halfords paid a dividend of 9.0 pence per share to its shareholders.

Clear deliverables and progress metrics were outlined alongside Halfords’ Fit for the Future strategy. These include like-for-like sales growth, operating margin expansion, progression in profit before tax and increasing return on capital employed. In FY26, roughly six months into delivery of the Optimise phase, the Group was showing good early progress against these metrics delivering like-for-like sales growth of 4.8%, a stable operating margin despite substantial inflationary headwinds, c.4% growth in underlying profit before tax and 160bps increase in return on capital employed to 14.2%. Halfords’ FY26 results were well received by the market, and the resulting increase in the share price culminated in admission to the FTSE 250 index in August 2026.