- Halfords Group
- 26 November 2024 10:29:19
Source: Sharecast
Canaccord Genuity stated Halfords' H125 results showed that "good margin and cost management" had helped to offset a fall in revenues, with adjusted pre-tax profits broadly flat at £21.0m.
As flagged at the time of its pre-close update, Halfords said good strategic progress was being made with its "Fusion" concept, with expansion accelerating on the back of positive results seen over the summer, along with a growing Motoring Club membership base of more than 4.0m.
"Whilst the Group remains comfortable with FY25 consensus and we leave our FY25 forecasts unchanged, we have reduced our outer year forecasts to reflect a slightly more cautious near-term outlook along with circa £14.0m of additional direct labour costs as a result of the recent UK budget," said Canaccord.
The Canadian bank also said Halfords trades on a price-to-earnings of 14.2x, with a dividend yield of 4.2%.
"Our TP is based on a CY25E target multiple of c.12x, broadly in line with the 10-year historical average. We maintain our 'hold' recommendation and continue to want to see evidence that earnings have stabilised before taking a more positive stance," added Canaccord.
Reporting by Iain Gilbert at Sharecast.com