One Fool remains bullish on Halfords Group plc (LON:HFD).
I guess it's debatable whether a year is a long time in the world of long-term investments. But for me, it certainly is. Simply because within the next couple of weeks, I celebrate the first anniversary of my first buy-to-hold stock. And I'm proud to say that that stock is Halfords (LSE: HFD).
According to some, this was a slightly odd choice for a first buy. It had had a topsy-turvy 2011, it was a retail stock and there were rumours of a potential dividend cut if sales continued to suffer. So why did I buy? Well, for two reasons, really, which intertwined quite nicely.
1) Buy what you know. As a self-confessed petrol head when I was (much) younger, I was a regular customer at my local Halfords, spending my hard-earned cash on everything from car stereos to wiper blades. And why did I choose to shop at Halfords? Well…
2) Halfords, in my opinion, is still the only recognised high-street brand that focuses on motoring and cycling products/accessories. For me, this gave it an edge on other retail stocks such as Next or Primark (owned by Associated British Foods), where there is a number of competitors competing for the same market share.
So, how has the year been? The share price has had some pretty dramatic fluctuations, dropping to 25% below what I paid for it, and then rising to a 15% gain around the time of the appointment of the new CEO, Matt Davies. And the recent interim management statement seemed relatively positive, too. Retail revenue was up a modest 0.1% but, more excitingly, revenue from Halfords' newly acquired Autocentres business was up over 12%. And, very importantly, shareholders received a solid dividend of 14p per share.
And for the future? Well, I expect more transition, but I remain bullish. There is clearly going to be a change in brand direction after the departure of the marketing director and advertising agency, which for me can only be a positive move in helping to find extra revenue. After the success of Sir Chris Hoy and co at the Olympic Games, I was hoping for the inspired British public to pump their cash into cycle sales, but this seemingly didn't happen. In fact, it seems cycle sales had actually dropped by nearly 2% this quarter.
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> Both Chris and The Motley Fool own shares in Halfords.
