Halfords Autocentres reports market share growth, revenues reach £700m

Car repair chain Halfords Autocentre has reported growing market share in the aftermarket as it draws in more drivers for tyre replacements and car servicing or MOTs.

It came after a Halfords marketing campaign in 2023 urged more cash-conscious motorists to shun franchised dealers and opt for its cheaper vehicle maintenance offers. That led to fury from some dealer groups who hit back by pointing out the expertise at their businesses.

Halfords' attempts to build loyalty by providing offers and added value appear be having success - its Motoring Loyalty Club has doubled in size to 3.4 million members within a year and it generates 40% of its MOT work.

However it has highlighted fears that many motorists have put off tyre replacement due to higher living costs, after an examination of more than 1,500 vehicles in airport car parks at London, Manchester and Edinburgh found that one in four had a tyre that was damaged or heavily worn.

In its financial results published today, Halfords shows its 639-site network of service and MOT workshops, including its commercial fleet services operation,  made £60.4 million underlying EBITDA from revenues which rocketed 18% to £699.4% from the prior year's £594.8m.

It reports that it has grown its car service market share by 0.2ppts, driven by the MOT Loyalty Club, a buy now pay later finance offier and dynamic pricing for MOT bookings, plus improved utilisation at its workshops.

Halfords chief executive Graham Stapleton said the company, which includes its cycle business, has continued to invest in its strategically important vehicle services business which now represents more than half of the group's entire revenues.

It has also extended its motoring offer with the launch of a specialist car parts proposition, to provide consumers with access to thousands of car parts online and in its stores, leading to a doubling of its parts revenue.

Halfords also added a fourth 'B' - brakes - to its '3Bs' proposition of bulbs, batteries and (wiper) blades.

"Our Autocentres business was the star performer yet again," Stapleton added. 

Halfords predicts its non-automotive sales volume to fall in its new financial year while the automotive volumes will hold flat as many consumers remain cautious of spending. He said: "While the short-term outlook remains challenging, we continue to build a unique, digitally-enabled, omnichannel business, which is well positioned for profitable growth.”

The group's 639 garages trade as Halfords Autocentres, McConechy’s, Universal, National Tyres and Lodge Tyre, plus it has 273 mobile service vans operating under the Halfords Mobile Expert, Tyres on the Drive and National brands.

It has closed its wholesale tyre distribution business, Viking and BDL, and signed an agreement with Bond International to control the tyre supply chain for the Autocentres division. Halfords expects this to deliver £5m annual savings while improving tyre stock levels and allowing its sites to offer an online-booked same-day tyre fitting service.

Overall Halfords Group achieved turnover of £1.7bn and £43.1m underlying PBT in the year ending March 29, 2024.

Tyre reporting

Halfords boss Graham Stapleton has called on the next government to do more to enforce road safety legislation, and he suggests that vehicles that leave workshops with safety-critical issues unrepaired could be logged on a national database so that police can tackle the drivers.

“We want to see the next government put a big emphasis on road safety,” said Stapleton. “That could mean an awareness campaign, but we also want to see major action on enforcement.

“For example, we have a farcical situation right now whereby a vehicle can come into a garage, be found to have illegal tyres or brakes, and yet there is nothing to stop it from being driven away.

“One solution would be for all garages to be mandated to upload registration numbers of offending vehicles to the Automatic Number Plate Recognition system used by police forces.”

In its latest financial report, Halfords noted that consumer spending on tyres has remained down 14% compared with pre-pandemic levels, and it hopes that a recovery in the market "would provide significant opportunity for revenue growth".