Halfords acquires garage chain amid profit plunge

Halfords has announced the acquisition of garage chain McConechy’s Tyre Service after closing a deal worth around £9.3m. 

The deal, which will see Halfords acquire all 60 sites and 100 vans belonging to the independent chain, will now allow the retailer to operate in more than 900 service locations across the UK.

McConechy’s, which report annual revenues of £45m, has operated in the north of England and Scotland since 1957. They provide tyre fitting and MOTs for retail and commercial vehicles and currently employ 330 staff.  

Graham Stapleton, chief executive of Halfords, said: “The additional garages and vans increase our national presence and takes Halfords to within a 15-minute drivetime to over half of UK households. 

“The vehicle servicing market is a £10bn market, but one which remains highly fragmented, offering significant scope for Halfords’ trusted and recognised consumer brand to grow its market share considerably.” 

PwC advised Halfords on the deal, whilst Grant Thornton advised McConechy’s.

Neil McInnes, corporate finance partner at Grant Thornton, added: “This is a great outcome for our long-standing client, which as a family business has grown over many years into a multimillion pound revenue company.”

The deal was announced after Halfords published reports of falling profits, with profit before tax sliding -2.5% to £27.5m in the first half of the financial year. Revenue also fell by -2.9%, from £599.9m to £582.7m. 

Halfords claim that retail performance was “impacted by tougher weather comparators year-on-year, and consumers delaying big-ticket discretionary purchases, reflecting the current economic and political uncertainty.” 

However, Stapleton adds that despite “weakened consumer confidence”, the retail giant is “pleased to have successfully increased gross margin, kept a tight control over costs, and seen growth from our strategic investment.”