Halfords interim profits fall; Budget changes to add £23m in costs

(Sharecast News) - Retailer Halfords said on Tuesday that changes to National Insurance contributions and minimum wage announced in last month's Budget will increase its costs by around £23m, as it reported a dip in interim revenue and profit. In the 26 weeks to 27 September, reported pre-tax profit was down 23.3% to £17.8m, while underlying pre-tax profit dipped 1.4% to £21m.

Revenue nudged down 1% to £864.8m, with revenue from Autocentres 2.3% lower at £348.7m, while Retail saw a 0.1% decline to £516.1m.

The retailer said that as a business employing more than 12,000 people, the measures announced in the Budget add around £23m of direct labour costs, of which around £9m was already included in FY26 planning assumptions and fully mitigated.

Halfords called on the government to make changes to the Apprenticeship Levy to help mitigate the impact of the new measures.

Chief executive Graham Stapleton said: "The cost implications from the recent UK Budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face. While we will work hard to mitigate these costs, we urge the government to consider alternative ways of supporting businesses like ours, including the acceleration of Apprenticeship Levy reform, which would help us to upskill existing colleagues and offset some of the new headwinds.

"Looking ahead, while the short-term outlook remains challenging, we will continue to build on our unique omnichannel platform and focus on what we can control to deliver on our strategy this year and beyond."