November 8, 2018 / 7:49 AM / 8 months ago

UPDATE 1-Halfords H1 profit hurt by costs, challenging UK market

(Adds details, background)

Nov 8 (Reuters) - British bicycles-to-car parts retailer Halfords Group Plc reported a 17.1 percent fall in first-half underlying pretax profit on Thursday, hurt by higher operating costs and a challenging consumer environment.

Halfords has already warned profits will not grow until its 2021 financial year as it looks to boost investment in its stores, services and digital operations to improve its position in Britain’s ultra-competitive retail market.

Britain’s traditional retailers are under pressure from subdued consumer spending, a drop in the value of the pound following the country’s vote to leave the European Union and stiff competition from online retailers.

Industry data for October showed that while total UK retail sales rose 1.3 percent year-on-year, uncertainty over the economic outlook was holding back spending.

Halfords, which was founded in 1892 and was bought four times before its London market debut in 2004, said underlying pretax profit fell to 30.5 million pounds ($39.97 million) in the 26 weeks ended Sept. 28, from 36.8 million pounds a year earlier.

However, good sales of electric bikes, dashboard cameras and motoring services helped half-year revenue rise 1.9 percent to 599.9 million pounds.

The company stuck to its forecast for underlying pretax profit in its 2018/19 financial year to be broadly unchanged from the 71.6 million pounds made in 2017-18.

($1 = 0.7631 pounds)

Reporting by Shashwat Awasthi and Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and Mark Potter

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