MARKET REPORT: Halfords issues a profit warning as bike demand goes flat

Shares in Halfords fell after the bike and car company warned of weak demand for bikes and tires.

On a gloomy day for investors, it cut its profit forecasts, sending shares down 19.1 percent (or 43.6p) to 185p.

The car center division did well as motorists turned to Halford mechanics to service their cars and vans.

As a result, revenues rose 13.9 percent to £873.5 million in the six months to September 29, while profits rose 15.8 percent to £21.3 million.

But customers tightened their belts when it came to things like bicycles and tires.

Halfords warned that such trends could continue and cut its annual profit forecast from £48m to £53m.

However, analysts at Peel Hunt remained optimistic, saying: ‘The cuts are unfortunate rather than careless, and we urge investors to look at the glass half full as we see value here.

“It may take some consumer excitement before it shows up, but we’re confident it will.”

The FTSE 100 fell 0.4 percent, or 31.78 points, to 7,423.46, while the FTSE 250 rose 0.4 percent, or 80.58 points, to 18,467.58.

Oil prices rose back above $82 a barrel ahead of today’s Opec+ meeting, where the group of oil-producing countries is expected to announce further production cuts.

Rolls-Royce expanded its profits a day after unveiling its ambitious turnaround plans.

Shares rose 2 percent, or 5.1p, to 263.4p, boosting profits so far this year under new boss ‘Turbo’ Tufan Erginbilgic to 185 percent.

Stock Watch – LifeSafe

LifeSafe, which makes fire extinguishers and detectors, said annual losses will be higher than expected as costs have soared.

The AIM-listed company has achieved £5.4m in revenue this year – a 62 per cent increase on the same period in 2022, but has been hit by higher digital advertising and logistics costs.

It spent far more than it had hoped and said losses this year will be greater than expected.

The shares, which were trading at 75p in July last year, fell 43.1 per cent, or 12.5p, to 16.5p.

There was also good news for M&G after Deutsche Bank upgraded the investment group from ‘hold’ to ‘buy’, but downgraded Aviva over concerns the company has returned too much money to shareholders.

M&G rose 2.7 percent, or 5.6p, to 210.4p, while Aviva fell 2.1 percent, or 9p, to 415.6p.

Britain’s biggest North Sea producer, Harbor Energy, rose 2.3 percent, or 5 cents, to 223.3 cents, maintaining its annual guidance and setting its sights on more mergers and acquisitions.

Spirent Communications has signed a £12 million deal with a major retail and investment bank to design and install testing infrastructure.

The group, which is testing 5G mobile and Wi-Fi networks, has already paid £9.5 million.

Spirent recently acquired Netscout, an American test lab automation company, to strengthen its business. Shares rose 5.9 percent, or 6.4p, to 115.2p.

But Pennon, the owner of South West Water, fell 2.1 per cent, or 16p, to 730.5p after first-half profits fell 85 per cent to £3.2m due to higher costs .

Deliveroo maintained its guidance for this year, but lowered its longer-term growth targets.

The food delivery group rose 1.2 percent, or 1.7 cents, to 147 cents.

Digital 9 Infrastructure came under further pressure after the data center and wireless network investor agreed this week to sell its stake in Verne Global. Shares fell 13.5 percent, or 5.3p, to 34p.

Sales at veterinary group CVS rose 11.9 percent in the four months to the end of October, but the stock fell 0.4 percent, or 5 cents, to 1,493 cents.

Kelso Group stressed that UK listed companies are worth investing in, even if many are bought cheaply.

It came as the group, which has stakes in THG and The Works, acquired a 3 percent stake in fishing retailer Angling Direct.

Kelso rose 4.1 percent, or 0.11 cents, to 2.75 cents, while Angling Direct rose 1.3 percent, or 0.5 cents, to 40.5 cents.

Vertu Motors made a profit after one of its shareholders, Cinch, increased its stake in the car dealer from 4.15 percent to 6.07 percent. Shares rose 3.2 percent, or 2.6p, to 84.3p.