Worcester-based Halfords isn't worried about its spare tyres as it goes on the acquisition trail again
Halfords Group, the Redditch based motoring and cycling products and services retailer, has paid £62 million to buy Axle Group Holdings Ltd, which owns the brands National Tyres and Autocare Viking Wholesale Tyres and Tyre Shopper.
The acquisition surpasses Halfords' current target of 550 garages and 200 consumer vans and means that post-completion, Halfords will have approximately 604 garages, 234 consumer vans and 190 commercial vans. Including retail stores this will mean a combined total of over 1,400 fixed or mobile Motoring Services locations. It will also have eight warehouses.
The company said that it means the majority of UK motorists will be within a 20-minute drive of a Halfords garage.
Graham Stapleton, Chief Executive Officer of Halfords, said: "This acquisition helps cement our position as the UK's largest vehicle service, maintenance and repair business. It will also see us deliver on our established strategy of evolving Halfords to become a Motoring Services focused business, with Motoring revenue set to represent more than 70% of our pro-forma revenue following the acquisition.
National has a high quality, UK-wide network of garages and mobile tyre fitting vans, and 1,400 highly skilled colleagues, providing a complementary fit with Halfords' existing operations. Post-acquisition, Halfords will have over 1,400 fixed or mobile Motoring Services locations, servicing a broad range of vehicles and delivering 7.5 million motoring jobs a year. This increased scale will bring the majority of UK-mainland motorists within a 20-minute drive of a Halfords garage, with even more vans available to provide mobile services at their home or work.
Given our recent track record of successfully acquiring and integrating businesses, and the potential we see to further grow our Motoring Services business in other areas of the country, I am very excited about our future growth prospects, and I look forward to welcoming the new teams to the business."
Last month, Halfords upgraded its full year profits to £80M-£90M after seeing strong revenue growth of 19.2 per cent on the previous year and a growing market share in retail motoring and autocentres, where revenues were up 7.7 per cent and a massive 88.8 per cent respectively. Revenues in its cycling offer grew 8.8 per cent, despite major disruptions in its supply chain.
Underlying profit before tax is £57.9 million, up 91 per cent on the previous year and the outlook is positive for next year, the company said.
National Tyres and Autocare operates 239 tyre and SMR garages and 60 mobile tyre fitting vans, providing national coverage across Great Britain. Tyres, which are predominantly sourced through Viking, represent over 80% of its sales mix with c.1.3 million tyres fitted per annum. MOT and service represent c.5% of NTA's sales mix. Headquartered in Stockport, NTA has approximately 1,200 FTE across its garage estate (equivalent to c.4-5 FTEs per garage) along with a database of 1.1 million customers. NTA's central support people costs (across all the National brands) is c.£7m per annum.
Viking is a wholesaler of tyres and related consumables to B2B customers, including NTA. Headquartered in Glasgow, Viking has 8 warehouses5 strategically located close to the motorway network.
Tyre Shopper is a UK based online tyre retailer, where users purchase tyres online and have them fitted at NTA centres or remotely using the mobile fitting service. Currently, 'online' represents just under a third of National's sales mix.
