Halfords : Annual Report 2023

Underlying profit before tax

Profit before tax

Dividend per ordinary share

Operational

Sustainability

• In April 2023, we held a Capital Markets Day for analysts and institutional investors. Here we outlined the Group's plan to leverage the platform that
  has been built since 2018 and deliver improved revenue, profit and return on capital employed over the mid-term and mid-to-long term.
• In October 2022, we acquired Lodge Tyre, supporting our strategic aim of becoming a motoring services-focused business. The acquisition has resulted in Halfords becoming the UK's largest commercial tyre service provider and has given our commercial fleet services business much greater nationwide coverage.
• Avayler, our unique industry leading proprietary software business, has continued to develop rapidly, establishing an external international client base.
  The growth of Avayler supports our strategy to grow our B2B offering, with the opportunity to deliver more resilient revenue at a high operating margin.

• Following the success of our 'Fusion' towns in Colchester and Halifax, this year we rolled out the most capital efficient parts of this programme to
  50 towns in our estate. In these towns we have upgraded the retail car park service provision. In addition, we have also empowered more of our colleagues with the tools to sell full solutions to our customers, every time.
• Since the launch of our Motoring Loyalty Club in March 2022, we have now signed up over 1.7 million members, significantly in excess of our initial target. This has driven new customers across the Group, as well as encouraging customers to cross shop across both our retail and garage businesses.

• Last year we invested in the Ecovadis platform to support the collection of accurate data from our suppliers. We have made significant progress this year in engaging with our top suppliers and capturing carbon data, a crucial first step on our journey to net zero. We have worked with suppliers and have managed to obtain primary carbon data for 79% of our spend with suppliers, giving us
  a much better insight into our Scope 3 emissions.
• The Bike Xchange programme, launched in late FY22, has seen customers trade-in over 11,000 bikes in exchange for Halfords vouchers. This scheme puts Halfords into the rapidly growing second-hand market for bicycles, promotes a circular economy and helps keep products in use for longer. The success of this scheme during the year has resulted in it being expanded to cover kids' bikes. In addition, Bike Xchange has shown the value of second- hand markets and this year we have also started selling refurbished E-bikes online, reducing the entry price point for customers to the E-bike market.

Ethical foundation enabling better decisions every day

We are reliant on the culture of our business and the engagement of our colleagues

to achieve our ambition. Last year, we introduced our new values relevant to our strategy across the Group. These new values are the fundamental beliefs that underpin everything we do and have been incorporated into Group training, review and reward mechanisms.

Living our Values

Following the introduction of the values, all colleagues across the Group attended leader-led workshops. These workshops were followed by the launch of a series of initiatives designed to both fully embed our values and to recognise and reward our values in action. A refreshed Group induction programme was launched in April 2022. This was designed to ensure all colleagues have a warm welcome to Halfords and can immediately see our values living and breathing in the culture across the business.

All new colleagues are introduced to our values as part of their induction, we also now review annual performance against the values, and colleagues are assessed against the behaviours that underpin each value. We also have a recognition programme, which recognises our "Colleague of the Quarter". We received nearly 700 nominations throughout the year, 46 colleagues were recognised as a "Colleague of the Quarter" and at the end of FY23, three colleagues were awarded "Colleague of the Year".

The importance of our people

Our colleagues are vital to our success and as such, we do everything we can to ensure their wellbeing - both physical and mental - remains healthy. Our "One Halfords Family" value is lived through all our colleagues and we all go the extra mile to help those around us. From financial help through our Wagestream app and 'Here to Help' fund to having over 100 fully-trained Mental Health First aiders across the Group, we offer colleagues a

variety of ways to access help, should they need it. We let colleagues have the option to feedback about how they feel through regular listening groups and anonymously through the annual engagement survey. We also remain committed to providing best-in- class training to our colleagues to promote career progression. This includes field- based training, such as electric servicing, all the way to online training courses via our intranet to upskill colleagues who wish to progress their career.

  Read more about how the Board monitors culture on pages 106 - 107.