PREVIEW – Halfords to wheel into view

Halfords results could act as a guide as to how much people are spending to do their own vehicle maintenance

A Halfords worker with a car
Halfords sells and fits some car parts

A truncated week after the Bank Holiday, but there are some notable names reporting, including auto parts firm Halfords Group PLC (LON:HFD) and plumbers merchant Wolseley PLC (LON:WOS).

Bike and car parts firm Halfords is always an interesting one to watch, as it could be seen as a barometer on the state of the nation's driving antics and transportation needs, along with a sign of how much people are spending to do their own vehicle maintenance.

Good Christmas sales

Things looked good at the turn of the year as it reported good Christmas sales, with its highest day for total sales on December 23.

In November, 2015 it had unveiled lower first-half profit and predicted flat profits in 2016/17, but in the 15 weeks to January 15 reported a 0.3% rise in group like-for-like sales.

Halfords said it was expecting group pre-tax profit for the year to April 1 to be between £78mln and £82mln.

Broker Numis brings us a little more up to date, noting what it called a "solid" Q4 trading update in mid-April this year, with retail like-for-likes, up 3.1%.

"This was driven by another positive LFL in Cycling (+1.9%), with the Q2 downturn increasingly looking like a weather-related blip, and continued progress in Car Maintenance (+2.0) and Travel Solutions (+9.5%), both facing very tough comps last year," said analyst Andrew Wade.

"While Halfords’ share price has fluctuated significantly over the last year, reaching as high as 548p before troughing at 322p, nothing fundamental has changed over that period – it remains a mature retailer with a somewhat defensible position but limited growth opportunities."

The broker rates the shares a 'hold' and targets 400p.

Numis is ‘hold’ on Wolseley

Meanwhile, Numis rates heating and plumbing parts supplier Wolseley a 'hold' saying its value is fair at the moment.

The firm will provide quarterly revenue and EBIT figures, including LFL (like-for-like) trends and Numis expects the third quarter to show a similar pattern to the year to date.

"US should continue to show good growth in construction activities, while the impact of Industrial related slowdown should be lessening in H2 though Canada is likely to remain weak."

Analyst Howard Seymour said the UK will be impacted by the £15mln reorganisation of the chain Pipe Center throughout this year and ongoing weakness in the wider plumbing and heating market.

But in Europe, he said, there were encouraging signs in Nordic and Dutch markets in particular.

Foreign Exchange should also be a tailwind but the analyst expects expectations to remain unchanged.

Significant announcements expected:

Monday May 30 UK Bank Holiday

Tuesday May 31 – Volkswagen

Wednesday June 1 – Halfords Group PLC (LON:HFD), Telford Holes, Wolseley (LON:WOS).

Thursday June 2- Johnson Matthey PLC (LON:JMAT).

Friday June 3 -  IAG (LON:IAG) traffic stats.

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