KPI & DefinitionCommitmentAnnual PerformanceHistoric Performance
Like-for-Like Sales
Like-for-like sales represent revenues from stores trading for greater than 365 days and include revenues denominated in foreign currencies translated at constant rates of exchange
We are committed to maximising our like-for-like sales opportunities in whatever economic environments we find ourselves.Retail sales performance in FY15 was up 7.0% on an LFL basis, with a broad-based performance, although the Cycling category was the standout performer throughout the year with LFL growth of 11.4%.
Gross Margin Percentage
Gross Profit expressed as a percentage of Sales
Gross Profit is an important indicator of the Company's financial performance. Within the business we focus on maximising cash generation.The gross margin declined by 30 basis points, predominantly due to the mix impact of higher sales in Cycling, particularly lower-margin Premium Bikes, along with growth in third-party branded products in Cycling parts, accessories and clothing ("PACs") and Car Cleaning.
Gross Profit
Gross Profit expressed as GBPs
Underlying EBITDA
Earnings before Interest, Tax, Depreciation and Amortisation
The Board considers this measurement of profitability a viable alternative to underlying profit and uses this measure to incentivise management.EBITDA was up 8.7% year-on-year, with the strong revenue growth reflected in improved profitability.
In-store Services
The stores offer a fitting/repair service when customers purchase replacement products such as car bulbs, windscreen wiper blades and batteries (3Bs)
Expert knowledge, advice and service remain at the heart of the Halfords customer offer, and specifically through fitting. This differentiates and defends the Halfords offer and generates attractive levels of return.We have invested in our 3-Gears training programme and in payroll and national marketing to fulfil the demand and make more customers aware of our unique offer and we increased the number of jobs to 4.60m.
In-store Service Income
The sales revenue generated from all our fitting and repair services, including the sale of Bike Care Plans
Expert knowledge, advice and service remain at the heart of the Halfords customer offer, and specifically through fitting. This differentiates and defends the Halfords offer and generates attractive levels of return.The majority of this revenue stream comprises 3B fitting and cycle repair, where sales growth of 14% and 18% respectively helped increase total in-store service income to nearly £27m.
Stores Trading in a Refreshed Format
The layout and offering within our stores is important as the two formats of choice (superstore and compact) allow us to reach both large and small catchment areas
We will continue to review the lines available in each of our formats of choice, looking to refresh or refurbish as appropriate as we believe this enhances like-for-like sales growth in these stores.During the year we continued the store refresh programme, creating modern, engaging and friendly store environments that encourage browsing and interaction with colleagues.
Underlying Costs (as a % of sales)
Operating expenses from the Retail business activities expressed as a percentage of sales
We are committed to an ongoing focus on cost control. This ensures an efficient use of resources and the correct cost base for the prevailing economic conditions.The slight reduction of 90 basis points has driven a 5.4% increase in operating costs. Costs rose primarily as a result of the investment in store colleagues and refreshes, higher depreciation, and increased distribution costs.
Online Sales (as a % of Total Revenue)
Sales enacted via the web, through Click & Collect and Direct Delivery
The Internet is changing the way our customers shop and provides us with new opportunities to grow our business. In the last few years we have introduced two ways to shop online: Click & Collect and Direct Delivery.Online sales exceeded £100m for the first time, growing by 14.3% and reflecting an increase in online penetration to 12.2%. A website design refresh was completed in the year, along with numerous other enhancements.
% of Web Customers Visiting Stores
% of online sales using the Click & Collect offer and visiting stores after researching online
Our strategy is to seamlessly integrate and our store operations. Our research tells us that our customers like the convenience of buying online but also want to visit our stores for our expert advice and value-adding services.91% of online sales were collected in-store, providing opportunities for store colleagues to engage with online customers.