Shares buy-back will free cash for store investment

Finance director Andrew Findlay is running a canny financial game by buying back shares in his own company.

Given all the changes being made to the business, senior management is pretty confident that it will be
generating far better profits and therefore commanding a better share value.

The measure also conserves cash for store investments. Fewer shares means less to be paid out in dividend.

So what happens if Joe Public starts buying and driving the price beyond the management’s own purchase price. “We do not plan to stop buying if the share price gets too high. We plan to continue the buyback to £75m as we announced in April.”

Its biggest and most valuable sector is, of course, bicycles.

“We don’t really know what market share we have,” said David Wild. “The market is not particularly well audited.”

He doesn’t like that. But he has got his own assessment of how he is doing.

“My instinct is that the market is worth about 3-5% growth year-on-year. Our numbers were plus-9%. With VAT on top of that you have got, in cash, 12% growth.

“I do not believe the market as a whole has growth anything like that so we must be growing market share.”

The UK car DIY corps is declining.

“There have been declines in what we call the harder parts like alternators. We are selling fewer of those.So we have tried to innovate in our core categories of blades, bulbs and batteries.”

But the growth in Halfords’ fitting service is getting less every year and the board is pondering the problem of where renewed growth is going to come from.

“It’s not just about fitting more products for people who already come to us. It’s about reaching new customers who come for a full supply and fit service.

“Our internal targets for that are significantly higher than those we are currently achieving,” he said.