The Directors present their report and the audited financial statements of Halfords Group plc (the "Company") together with its subsidiary undertakings (the "Group") for the period ended 3 April 2015.
|Halfords Group plc|
|Registered Office Address||Icknield Street Drive, Washford West, Redditch, Worcestershire, B98 0DE|
|Country of Incorporation||England and Wales|
|Type||Public Limited Company|
Summary of General Disclosures (incorporated into this Directors' Report)
The following information required to be disclosed in this Directors' Report has been provided by the Company:
The principal activities of the Group are: the retailing of automotive, leisure and cycling products from retail stores and car servicing and repair from Autocentres. The principal activity of the Company is that of a holding Company. The Company's registrar is Capita Asset Services, which is situated at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
PROFITS & DIVIDENDS
The Group's results for the year are set out in the Consolidated Income Statement. The profit before tax on ordinary activities was £83.8m (2014: £72.6m) and the profit after tax amounted to £65.8m (2014: £55.5m). The Board proposes that a final dividend of 11.0 pence per ordinary share be paid on 28 August 2015 to shareholders whose names are on the register of members at the close of business on 7 August 2015. This payment, together with the interim dividend of 5.5 pence per ordinary share paid on 23 January 2015, makes a total for the year of 16.5 pence per ordinary share. The total final dividend payable to shareholders for the year is estimated to be £21.4m.
Computershare Trustees (Jersey) Limited, trustee of the Halfords' Employee Share Trust, has waived its entitlement to dividends.
The delivery of the Group's strategic objectives is monitored by the Board through KPIs and periodic review of various aspects of the Group's operations. The Group considers that the KPIs are appropriate measures for the delivery of the strategy of the Group via its Retail and Autocentres divisions.
The following were Directors of the Company during the period ended 3 April 2015 and, unless otherwise stated, at the date of this Annual Report:
Matt Davies (resigned 30 April 2015)
Bill Ronald (resigned 31 May 2014)
Keith Harris (resigned 31 May 2014)
In accordance with the Company's Articles of Association and the UK Corporate Governance Code guidelines, all those persons holding office as a Director of the Company on 3 April 2015 will retire and offer themselves for re-election at the 2015 AGM. Jill McDonald, who was appointed on 11 May 2015, will stand for election for the first time.
Directors have a statutory duty to avoid situations in which they have, or may have, interests that conflict with those of the Company unless that conflict is first authorised by the Board.
The Company has in place procedures for managing conflicts of interest. The Company's Articles of Association contain provisions to allow the Directors to authorise potential conflicts of interest, so that if approved, a Director will not be in breach of his/her duty under company law. In line with the requirements of the Companies Act 2006, each Director has notified the Company of any situation in which he or she has, or could have, a direct or indirect interest that conflicts or possibly may conflict, with the interests of the Company (a situational conflict). Directors have a continuing duty to update any changes to their conflicts of interest.
Directors' and Officers' insurance cover has been established for all Directors and Officers to provide cover against their reasonable actions on behalf of the Company. The Directors of the Company and the Company's subsidiaries have the benefit of a third-party indemnity provision, as defined by section 236 of the Companies Act 2006, the Company's Articles of Association.
The Company's Auditor is KPMG LLP. A resolution proposing the reappointment of KPMG LLP is expected to be in the notice of the AGM and will be put to shareholders at the meeting.
DISCLOSURE OF INFORMATION TO THE AUDITOR
In accordance with Section 418(2) of the Companies Act 2006, each Director in office at the date the Directors' Report is approved confirms that:
- so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
- he/she has taken all the steps that he/she ought to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
With effect from 14 November 2014 the ultimate holding company, Halfords Group plc, completed an amend and extend of its previously secured four-year £200m revolving credit facility (with an option to extend for a further year). The arrangement now consists of a £170m five-year revolving credit facility, ending in November 2019. At the year end, the Group had undrawn borrowing facilities of £117m (2014: £114m). The Group's current committed borrowing facilities contain certain financial covenants, which have been met throughout the period. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its borrowing facilities and covenants for the foreseeable future. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully, despite the uncertain economic outlook. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, hence they continue to adopt the going concern basis of accounting in preparing the Financial Statements.
The Group strives to meet its business objectives by motivating and encouraging its employees to be responsive to the needs of its customers and continually improve operational performance.
The Group is committed to providing equality of opportunity to employees and potential employees. This applies to recruitment, training, career development and promotion for all employees, regardless of physical ability, gender, sexual orientation, religion, age or ethnic origin. Full and fair consideration is given to employment applications by disabled persons wherever suitable opportunities exist, having regard to their particular aptitudes and abilities. Training and career development support is provided where appropriate. Should a colleague become disabled, efforts are made to ensure their continued employment with the Group, with retraining being provided if necessary.
The Group has established a framework of colleague communications, including a monthly magazine, to provide colleagues with information on matters of concern to them and business performance, as well as to encourage the engagement of every colleague in the Board's commitment to high standards of customer care and service provision.
A whistleblowing policy and procedure enables colleagues to report concerns on matters affecting the Group or their employment, without fear of recrimination. In addition, the Group takes a zero-tolerance approach to matters of discrimination, harassment and bullying in all aspects of its business operations, including in relation to gender, race, national origin, disability, age, religion or sexual orientation. Appropriate policies and procedures are in place for reporting and dealing with such matters.
The Group made no political donations and incurred no political expenditure during the year (FY14:nil). It remains the Company's policy not to make political donations or to incur political expenditure, however the application of the relevant provisions of the Companies Act 2006 is potentially very broad in nature and, as last year, the Board is seeking shareholder authority to ensure that the Group does not inadvertently breach these provisions as a result of the breadth of its business activities, although the Board has no intention of using this authority.
Details of the Company's share capital, including changes during the year in the issued share capital and details of the rights attaching to the Company's ordinary shares, are set out in Note 21. All ordinary shares, including those acquired through Company share schemes and plans, rank equally with no special rights.
All shareholders are entitled to attend and speak at the general meetings of the Company, appoint proxies, receive any dividends, exercise voting rights and transfer shares without restriction. There are no known arrangements that may restrict the transfer of shares or voting rights.
The Company has term and revolving credit facilities that require the Company in the event of a change of control to notify the facility agent and, if required by the majority lenders, these facilities may be cancelled. The Company does not have agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover, except that provisions of the Company's share schemes and Deferred Bonus Plan may cause options and awards granted to Directors and employees under such schemes and plans to vest on a takeover.
Rules relating to the appointment or removal of the Directors, and their powers, are contained within the Company's Articles of Association, which in accordance with legislation can only be changed with shareholder approval.
As at 1 June 2015, the Company's register of substantial shareholdings showed the following interests of 3% or more of the Company's issued ordinary shares.
|Holder||Number of |
|% of issued |
|Artemis Investments Management LLP||26,978,462||13.55|
|J O Hambro Capital Management Limited||10,700,558||5.38|
|Legal & General Investment Management Limited||7,772,556||3.90|
|Rathbone Brothers Plc||7,510,079||3.77|
|Norges Bank Investment Management||6,462,138||3.25|
|BlackRock Investment Management Limited||6,257,960||3.14|
AUTHORITY TO PURCHASE SHARES
At the 2014 AGM, shareholders approved a special resolution authorising the Company to purchase a maximum of 19,906,322 shares, representing less than 10% of the Company's issued share capital at 1June 2014, such authority expiring at the conclusion of the AGM to be held in 2015 or, if earlier, on 30 September 2015.
ANNUAL GENERAL MEETING
The AGM will be held at the Hilton Garden Inn, 1 Brunswick Square, Brindley Place, Birmingham B1 2HW on Thursday 30 July 2015. The notice of the AGM and explanatory notes regarding the special business to be put to the meeting will be set out in a separate circular to shareholders.
By order of the Board
Group Company Secretary
4 June 2015