Halfords Group PLC: Interim results: Financials -8-

Increase/(decrease) in provisions                                       (8.1)       17.1        25.7 
Corporation tax paid                                                    (5.3)       (3.0)       (10.8) 
Net cash from operating activities                                      102.1       229.7       272.1 
Cash Flows from investing activities 
Acquisition of subsidiary, net of cash acquired                         -           -           (11.5) 
Proceeds from asset held for sale                                       7.5         -           - 
Purchase of intangible assets                                           (10.4)      (4.3)       (11.8) 
Purchase of property, plant and equipment                               (16.9)      (7.6)       (15.7) 
Net cash used in investing activities                                   (19.8)      (11.9)      (39.0) 
Cash Flows from financing activities 
Net proceeds from share options and purchase of own shares              0.9         -           - 
Finance costs paid                                                      (5.5)       (7.7)       (5.5) 
Proceeds from loans, net of transaction costs                           -           3.0         - 
Repayment of borrowings                                                 -           (180.0)     (180.0) 
Interest paid on lease liabilities                                      (4.6)       (5.2)       (10.0) 
Payment of capital element of leases                                    (38.2)      (33.8)      (85.9) 
Dividends paid                                                    12    (9.9)       -           - 
Net cash used in financing activities                                   (57.3)      (223.7)     (281.4) 
Net increase/(decrease) in cash and bank overdrafts               15    25.0        (5.9)       (48.3) 
Cash and cash equivalents at the beginning of the period          15    67.0        115.3       115.3 
Cash and cash equivalents at the end of the period                15    92.0        109.4       67.0 

The notes on pages 25 to 34 are an integral part of these condensed consolidated interim financial statements.

Halfords group plc

Notes to the condensed interim consolidated financial statements For the 26 weeks to October 1, 2021 1. General information

The condensed consolidated interim financial statements of Halfords Group plc (the “Company”) include the Company and its subsidiaries (the “Group”).

The Company is a limited liability company incorporated, domiciled and registered in England and Wales. Its registered office is Icknield Street Drive, Washford West, Redditch, Worcestershire, B98 0DE.

The Company is listed on the London Stock Exchange.

These condensed half-year consolidated financial statements were approved by the Board of Directors on November 10, 2021. 2. Declaration of conformity

These condensed consolidated interim financial statements for the 26 week period on October 1, 2021 have been prepared in accordance with IAS 34 “Interim financial reporting” as adopted by the UKEB. They do not contain all of the information required for the complete annual financial statements and should be read in conjunction with the 2021 annual report and accounts, which have been prepared in accordance with IFRS accounting standards.

The comparative figures for the fiscal year ended April 2, 2021 are not the Group’s statutory accounts for that fiscal year. These accounts were declared by the Group’s auditors and submitted to the company register. The auditor’s report was (i) without qualification, (ii) did not contain any reference to matters to which the auditor drew attention by emphasizing without qualifying his report, and (iii) did not contain reporting under section 498 (2) or (3) of the Companies Act 2006. 3. Risks and uncertainties

The Directors consider that the main risks and uncertainties which could have a significant impact on the performance of the Group during the remaining 26 weeks of the financial year remain the same as those mentioned on pages 66 to 72 of our Annual Report and Accounts for the 52 weeks to April 2, 2021, which are available on our website www.halfordscompany.com plus climate change and electrification going forward. These are also detailed in the CFO report on page 11. 4. Main accounting methods

Business continuity

The directors reviewed the current financial performance and liquidity of the company. Further details of the valuation are provided on pages 72-73 of our annual report and accounts for the 52 weeks up to April 2, 2021, which are available on our website www.halfordscompany.com. Directors further reviewed this financial forecast against the company’s current performance in the first half of the year by updating the actual trading model, showing that Halfords outperformed the original model.

After reviewing current performance and forecasts, the Directors consider that the Group has sufficient resources to remain in business for the foreseeable future and have therefore continued to adopt the going concern principle in the preparation of the condensed consolidated interim financial statements. . The Group’s forecasts and projections, taking into account the reasonably possible evolution of commercial performance, show that the Group has sufficient resources to continue its operational existence for a period of at least 12 months from the date of approval of these financial statements.

Accounting rules

As required by the disclosure and transparency rules of the Financial Conduct Authority, the condensed consolidated interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the 2021 annual reports and accounts, which are published on the Halfords Group website, www.halfordscompany.com.

The accounting principles adopted for the preparation of the interim financial statements are the same as those set out in the Group’s annual financial statements for the 52 weeks ended April 2, 2021. 5. Estimates and judgments

The significant judgments made by management in the application of the Group’s accounting policies and the main sources of uncertainty on the estimates were the same as those applied to the consolidated financial statements at and for the 52-week period ended April 2, 2021 and the 26 weeks ending October 2, 2020. 6. Operating sectors

The Group has two segments to present, Retail and Car Servicing, which are the Group’s strategic business units. Car Servicing became a reporting segment of the Group following the acquisition of Nationwide Autocentres on February 17, 2010. Strategic business units offer different products and services and are managed separately as they require different operational, technological and marketing strategies.

The activities of the Retail operating segment include the retail sale of automotive, leisure and cycling products through retail stores and online platforms. Car Servicing reporting segment operations include car maintenance and repair performed from Autocentres, commercial vehicles and mobile vans through Halfords Mobile Expert.

The main operational decision-maker are the executive directors. The internal management reports for each of the segments are reviewed monthly by the Executive Directors. The primary metrics used to assess performance are revenue and operating profit. Management believes that these metrics are the most relevant for assessing industry performance and for making resource allocation decisions.

The following summary describes the operations in each of the Group’s reportable sectors. Performance is measured on the basis of segment operating income, as included in the management reports reviewed by the Executive Directors. These internal reports are prepared in accordance with IFRS accounting policies consistent with these Group financial statements.

All material transactions in the reportable segments are carried out in the UK and all material non-current assets are in the UK. The Group’s turnover is driven by the consolidation of individual low value transactions and, therefore, the Group’s turnover is not dependent on a large customer or a group of customers. All revenue comes from external customers.

                                                                   26 weeks to 
                                           Retail                  1 October 2021 
Income statement                                  Car Servicing GBPm 
                                           GBPm                       Total Unaudited 
Revenue                                    538.7  156.1            694.8 
Segment result before non-underlying items 61.2   3.7              64.9 
Non-underlying items                       6.4    -                6.4 
Segment result                             67.6   3.7              71.3 
Unallocated expenses1                                              (1.2) 
Operating profit                                                   70.1 
Net financing expense                                              (5.8) 
Profit before tax                                                  64.3 
Taxation                                                           (11.6) 
Profit after tax                                                   52.7 
                                                                   26 weeks to 2 October 2020 
Income statement                                  Car Servicing GBPm  Total Unaudited 
Revenue                                    524.2  114.7            638.9 
Segment result before non-underlying items 60.3   4.7              65.0 
Non-underlying items                       (0.1)  (0.3)            (0.4) 
Segment result                             60.2   4.4              64.6 

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November 10, 2021 02:00 ET (07:00 GMT)

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