Halfords Group PLC (HFD) 
Halfords Group PLC: Annual Financial Report 
29-Jul-2021 / 07:10 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
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Halfords Group plc 
 
Annual Report and Accounts for period ended 2 April 2021 
including the Notice of Annual General Meeting ("AGM") - convened for 8 September 2021 
 
The Company announces that the Annual Report and Accounts for the period ended 2 April 2021 and Notice of Annual 
General meeting of the Company, have been posted or otherwise made available to shareholders and published on its 
website www.halfordscompany.com. 
 
The Company's 2021 AGM will be held at Halfords Group plc, Support Centre, Icknield Street Drive, Washford West, 
Redditch, B98 0DE on Wednesday 8 September commencing at 3:00pm. 
 
As detailed in the Notice of AGM, in light of the ongoing coronavirus pandemic and current government guidance, it is 
expected that the 2021 AGM will be held in a streamlined manner similar to last year. The health and well-being of our 
colleagues, shareholders and the wider community in which the Company operates is, and will continue to be, of 
paramount importance to us. As the social distancing requirements have now been lifted in England, the Board is 
optimistic that shareholders will be able to attend the AGM in person. However due to the uncertainty with regards to 
the coronavirus pandemic there is still a possibility that the UK Government's restrictions and/or guidance on indoor 
public gatherings are reinstated prior to the AGM, because of this the Board recommends to shareholders that they cast 
their votes through the use of a proxy. Details of how to do this can be found in the Notice of AGM. 
 
The Board is committed to ensuring that shareholders can exercise their right to ask questions. Shareholders will be 
able to submit questions to the Directors in advance of the AGM via email to the Company Secretary 
(tim.ogorman@halfords.co.uk). Written answers to all questions received will be sent directly to shareholders by email 
and answers to frequently asked questions will, to the fullest extent practicable, be published on the Company's 
website ahead of the meeting or, to the extent that has not been possible, will be addressed at the meeting itself. 
 
In accordance with Listing Rule 9.6.1, a copy of the Annual Report and Accounts and the Notice of Annual General 
Meeting of the Company have been uploaded to the National Storage Mechanism and will be available for viewing shortly 
at  https://data.fca.org.uk/#/nsm/nationalstoragemechanism 
 
 
Tim O'Gorman 
Company Secretary 
Halfords Group plc 
 
The Appendix to this announcement is a supplement to our preliminary statement of Financial Results made on 17 June 
2021 (the "Final Results Announcement"). It contains the information required pursuant to Disclosure Guidance and 
Transparency Rule 6.3.5 that is in addition to the information communicated in the Final Results Announcement and 
should be read together with the Final Results Announcement. This information is not a substitute for reading the full 
Annual Report and Accounts for the year ended 2 April 2021. 
 
Appendix 
 
The Chief Financial Officer's Report in the preliminary statement of the Final Results Announcement issued on 17 June 
2021 includes a commentary on the principal commercial and financial risks and uncertainties to achieving the Group's 
objectives. 
 
Further details of other principal risks and uncertainties relating to the Halfords Group are set out on pages 66 to 72 
of the 2021 Annual Report and Accounts. Specific financial risks (e.g. credit risk, foreign currency) are detailed in 
note 22 to the Financial Statements on pages 181 to 185 of the 2021 Annual Report and Accounts. 
 
The following is extracted in full and unedited form from the 2021 Annual Report and Accounts. 
 
 
Our Principal Risks and Uncertainties 
 
Capability and Capacity to Effect Change 
If we do not have sufficient capacity and capability (in terms of our people, processes, and systems) to successfully 
implement the changes necessary across the business, we will not realise the expected benefits of our strategy and the 
business will not be sustainable. 
 
Current Mitigation                                                               Focus in 2022 
                                                                                 * Continue to align our Transformation 
                                                                                 Plan with the key objectives of our 
* The appointment of a Transformation Director and a strengthened team with      corporate strategy 
emphasis on project management enabled progress to be maintained during a 
challenging period for capital investment. The successful acquisition of The 
Universal Tyre Company (Deptford) Limited ("Universal") in March 2021 
demonstrated our intent and ability to grow our services business.               * Closely monitor progress on 
                                                                                 individual programmes, realigning 
                                                                                 resources where necessary. 
* The continued advancement of our change programme is managed through a 
Transformation Board, providing the necessary governance for delivery of the 
strategy. The Transformation Board ensures there is a robust approval process    * Specifically, within the technology 
for each project, allocates resource and monitors progress. Project managers are and digital teams, address operating 
in place within the business                                                     model shortcomings to enable faster 
to whom projects can be assigned and this has been supplemented by specialist    execution. 
resource to boost capability. In affecting change, Halfords is requiring all 
contributing colleagues to observe the principles of 
Responsible, Accountable, Consulted, and Informed ("RACI").                      * Complete organisational design 
                                                                                 changes to align with the strategic 
                                                                                 focus of the business. 

Stakeholder Support

If we fail to maintain stakeholder confidence in our strategy, they may withdraw their support.

Current Mitigation                                                                     Focus in 2022 
                                                                                       * Maintain progress on the 
                                                                                       delivery of our strategic 
* Throughout the year, we demonstrated progress in the execution of our strategy,      objectives. 
building confidence in external and internal stakeholders. Our share price responded 
positively, Customer NPS improved, and our internal engagement scores remained high 
despite the disruption caused by COVID-19 
                                                                                       * Address colleague engagement 
                                                                                       challenges through a regular 
                                                                                       cycle of survey and review 
* Engagement continued throughout the year with customers, investors, and colleagues, 
keeping them informed of progress against our strategic plans, changing customer 
propositions as well as the challenges presented by the pandemic 
                                                                                       * Proactive investor relations 
                                                                                       programme of events and 
                                                                                       communication. 

Value Proposition

Customers are not persuaded by our value proposition and we lose market share to online retailers and discounters. Purely competing on price leads to a diminution of financial returns.

Current Mitigation                                                              Focus in 2022 
* To differentiate ourselves in a competitive retail market, our vision is to 
consolidate Halfords as a super specialist in motoring and cycling. Our 
strategy emphasises the importance of creating value for the customer by        * Launch of a Halfords Motoring loyalty 
delivering services alongside the sale of a product. Progress continued through programme, designed to reward loyal 
the development of new services and greater accessibility through the growth of customers and inspire a greater 
our Cycle-to-Work programme, financial products, and Halfords Mobile Expert     proportion to shop across the Group. 
business. 
 
 
                                                                                * Further investment in pricing of 
* Optimisation of our Group website with payment online functionality was       motoring products to deliver greater 
further enhanced by investment in our fulfilment proposition and enablement of  value for customers. 
cross-shop opportunities, aligned with more targeted promotions, designed to 
appeal to customers. 

Brand Appeal and Market Share

If we continue to lose brand relevance, we will be unable to maintain and grow our customer base and build market share.

Current Mitigation                                                                         Focus in 2022 
                                                                                           * Continued investment in a 
                                                                                           Group services marketing 
                                                                                           campaign. 
 
                                                                                           * A greater focus on E-bike 
* Building on a positive response to our status as an essential retailer, we have grown    and E-scooter product 
awareness of our HME and garage services. Customer loyalty and satisfaction has achieved   sales, alongside a more 
record levels for Trust Pilot and Google scores for the Group                              general electric vehicle 
                                                                                           servicing strategy 
 
 
* Improvement of our cycling proposition, allied with better than market availability and 
support for the cycle voucher scheme, has strengthened market share.                       * Investment in fair pricing 
                                                                                           for motoring products. 
 
                                                                                           * Improve climate change 
                                                                                           credentials with ESG targets 
                                                                                           defined. 

Sustainable Business Model

Changes in the UK economy (including COVID-19, consumer confidence, tax and duty rates and the value of the Pound) could materially impact our revenue and/or costs, and therefore the profitability of the business. Unless we can reduce our exposure to these economic variables (e.g. our foreign exchange exposure), and improve our ability to take action quickly on our margins and operating costs, we will not create a sustainable business model.

Current Mitigation                                                              Focus in 2022 
* Significant actions on cost and margin taken in FY21 have collectively built  * Maintain focus on reducing underlying 
financial resilience, including a successful project to reduce our fixed cost   costs, e.g. rental costs through 
base. A refinancing secured our funding for a three-year period.                property renegotiations. 
* A strategic focus on the growth of services will build more stable revenue 
streams going forward, lessening the Group's exposure to product lifecycles and 
trends                                                                           * Continuing to focus on margin 
                                                                                improvement, 
* The business has a hedging programme in place and is following a              eliminating unnecessary cost through 
working capital reduction programme, targeted at reducing stock holding         targeted 
and aligning trade creditor terms.                                              efficiencies and scale benefits. 

Service Quality

The service we provide to customers may fail to meet regulatory/safety requirements resulting in harm to customer and/or legal/ financial penalty.

Current Mitigation                                                                        Focus in 2022 
                                                                                          * Full roll-out of new store 
                                                                                          operating model, with 
* All colleagues are provided with dedicated training and adhere to established quality   additional skills training 
control and safety procedures, with compliance audits by management. We also have a       completed for all retail 
dedicated compliance team monitoring our regulated activities.                            colleagues. 
 
* In Autocentres, we have introduced PACE, our digital operating platform, enabling       * Introduction of in-store 
increased workflow, productivity, and quality assurance. A new store operating model is   specialists, focused on 
also now in place with multiskilled retail colleagues operating across all departments.   delivering excellence in our 
                                                                                          different service offerings. 
 
 
* Store calls are now managed through a centralised contact centre, improving response 
times and convenience to customers.                                                       * Ongoing programme of 
                                                                                          proactive store maintenance 
                                                                                          and safety checks. 

Cyber Security

If we fail to sufficiently detect, monitor, or respond to cyber-attacks against our systems they may result in disruption of service, compromise of sensitive data, financial loss and reputational damage.

Current Mitigation                                                     Focus in 2022 
* Our information security team working with our security partner, 
TCS, provide valuable support by managing vulnerability scans and 
email and website security 
 
                                                                       * Launch of a fully managed security operations 
* A perpetual education and awareness campaign is provided to all      centre, increasing visibility and decreasing 
colleagues. Regular briefings promote an understanding of the risks to response time to incidents 
our data and the benefits of good security practices. 
 
* The Audit Committee is regularly briefed by senior IT management on 
the business' IT security framework. 

Colleague Engagement/Culture

Our employment model may not be sufficiently attractive to recruit and retain the talent that we need.

Current Mitigation                      Focus in 2022 
* Our status as an essential retailer 
during the pandemic provided a strong   * Regular survey activity to identify areas important to 
sense of purpose and enhanced the       colleagues in driving continued engagement 
culture and identity of Halfords as a 
services business 
* Early in the year, we launched our 
new colleague values and behaviours 
framework and appointed a colleague 
experience manager to focus on 
engagement. An annual engagement survey 
provides us with reports at 
team level. We have an environment that * Ongoing wellbeing programme, providing ideas, 
encourages colleagues to feed           support and tips for a better work/life balance. 
back to us about how we can make 
Halfords an even better place to 
work. 
                                        * Identification and development of top talent, allowing us to develop 
* During the year, a hardship fund was  colleagues to fulfil their potential and, in turn, strengthen our succession 
founded for the benefit of our          pipeline. 
colleagues to provide support and 
assistance where needed. Equally, a 
bonus scheme was established for those 
colleagues working in a front 
line role during the early period of 
the pandemic. 

Skills Shortage

We may be unable to recruit, retain and develop enough people to have the different mix of skills that we need at all levels across the business, in the near and longer term.

Current Mitigation                                                 Focus in 2022 
* We have a strategy that relies on attracting and retaining 
colleagues who can inspire and support our customers and encourage * Material investment programme in skills training 
them to build a lifetime relationship with the brand               to enhance colleague capability and, in turn, 
                                                                   improve the customer experience across our touch 
                                                                   points. 
* Our recruitment website highlights the importance of the 
Halfords behaviours and details the skills and experience required 
of our colleagues. New starters are given a full induction and all * As the restrictions associated with COVID-19 ease, 
colleagues receive a performance development review. We develop    develop a revised working model for our Support 
colleagues via the application of a talent matrix, which supports  Centre colleagues, balancing a desire for greater 
them in fulfilling their potential and enabling succession         flexibility with the connection and creativity that 
management                                                         comes from being in the right office environment 
 
* Training and development are a fundamental part of our business  * Extend our eLearning programme for the benefit of 
and a great attraction for new applicants. We apply a targeted     all colleagues. 
approach to further enhance skill levels for centres as we do with 
stores, by mapping against the optimal skills mix 

IT Infrastructure Failure

Failure in our IT system(s) may cause significant disruption to, or prevention of, normal business-as-usual activities.

Current Mitigation                                                    Focus in 2022 
* Extensive controls are in place to maintain the integrity of our    * Continue progression towards a fully cloud 
systems and to ensure that systems changes are implemented in a       based hosting structure with a transfer of risk 
controlled manner. We have resilient infrastructure in place for      to cloud-based service providers who can maintain 
remote working colleagues to access Halfords hosted applications,     higher levels of contracted availability 
such as SAP. 
 
* Halfords' key trading systems are hosted securely within data 
centres operated by a specialist company and in specialist cloud      * Deep-dive analysis into targeted areas of 
services operated by Microsoft. These systems are supported by        infrastructure, managed through the Risk 
disaster recovery arrangements, including comprehensive backup and    Committee 
patching strategies. IT recovery processes are tested regularly. 

Critical Physical Infrastructure Failure (including supply chain disruption)

Severe damage or failure of physical infrastructure may disrupt our supply chain and/or business as usual activities and prevent the fulfilment of customer orders.

Current Mitigation                                                         Focus in 2022 
* The need to respond to the pandemic in FY21 has tested our business      * Programme of development for warehouse and 
continuity plans and given us confidence in alternative supply chain       duty management systems. 
solutions and resilience. 
 
 
                                                                           * Enhanced flexibility across the supplier 
* We maintain security and protection measures at our distribution centres base, using a wider range of suppliers, 
and have business continuity plans to manage any incidents that may occur. where possible, and additional providers of 
Our logistics operations are overseen by a dedicated warehouse and         freight and transport solutions. 
logistics team with extensive experience. 
 
 
                                                                           * Revised programme of supplier management 
* Extensive research is conducted into quality and ethics before the Group for all key suppliers. 
procures products from any new country or supplier. A strong management 
team in the Far East, with an understanding of local culture, market 
regulations and risks, maintains close relationships with both our 
suppliers and logistics partners to ensure that disruption to production   * Ongoing dialogue with existing and new 
and supply are managed appropriately.                                      suppliers to build a joint programme of 
                                                                           environmental sustainability. 

Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with international standards in conformity with the requirements of the Companies Act 2006 and applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, have elected to prepare the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group for that period. The Directors are also required to prepare financial statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union.

In preparing these financial statements, the Directors are required to:

* select suitable accounting policies and then apply them consistently;

* make judgements and accounting estimates that are reasonable and prudent;

* for the Group financial statements, state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, additionally for the Group, international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union;

* for the parent Company financial statements, state whether applicable UK Accounting Standards comprising FRS 101 have been followed, subject to any material departures disclosed and explained in the parent Company financial statements;

* prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

* prepare a Director's Report, a Strategic Report and Director's Remuneration Report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group's performance, business model and strategy.

Website Publication

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein

Directors' Responsibilities Pursuant to DTR4

The Directors confirm to the best of their knowledge:

* the financial statements have been prepared in accordance with the applicable set of accounting standards and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group; and

* the Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

Approved by order of the Board.

Keith Williams

Chair

16 June 2021 -----------------------------------------------------------------------------------------------------------------------

ISIN:           GB00B012TP20 
Category Code:  ACS 
TIDM:           HFD 
LEI Code:       54930086FKBWWJIOBI79 
OAM Categories: 1.1. Annual financial and audit reports 
Sequence No.:   118690 
EQS News ID:    1222467 
 
End of Announcement  EQS News Service 
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