We had to take a series of very difficult decisions during the first few months: pausing dividend payments, furloughing 50% of colleagues, and running a reduced investment plan that ultimately limited our ability to transform the business. That said, I am pleased that despite some major investments being curtailed, the Group still made meaningful progress towards creating a more efficient and profitable business for the future.
I am particularly pleased with the resulting Group's performance during FY21 as the UK faced an almost continuous rhythm of restrictions and lockdowns. Group Profit Before Tax was £96.3m (£99.5m post-IFRS 16), over £40m ahead of last year, and we generated a Free Cash Flow of £145.3m, finishing with net cash of £58.1m.
Looking at the Year Ahead
Hoping for the best but preparing for the worst, we will continue to hold a strong balance sheet given the uncertainties ahead. But we are well placed to continue our plans to move the business forward.
I believe our existing strategy, that will see Halfords evolve into both a consumer and B2B services-focused business, generating higher and more sustainable financial returns, is still the right one, and we will continue our plans to accelerate the growth of our motoring services business. This requires greater capital expenditure, which we expect to be with the range of £50m–£60m.
We have many exciting plans that were momentarily paused, but I now look forward to seeing them emerge in FY22 and the positive effects they will have on the Group.
Given the strength of our performance in the closing stages of FY21, the Board has proposed a final dividend of 5p per share. We also propose a dividend in FY22 of 9p per share with an intention for this to be progressive.
Should surplus cash remain in the business that we feel we cannot deploy with good rates of return, we will return this to shareholders in the most appropriate way.
Board of Directors
We have seen three changes to our Board this year. In September, we welcomed Tom Singer to the Board. I know Tom will bring invaluable experience to the Board and will contribute greatly to the ongoing success of Halfords. Also, in September David Adams stepped down as Senior Independent Director, and Helen Jones took on this role. In December, David Adams left Halfords, following which Tom Singer became Chair of the Audit Committee. We have benefitted greatly from David's considerable efforts since he joined the Board, initially as a Director and more recently in his additional roles as Chair of the Audit Committee and as Senior Independent Director. We are grateful to David for the work he has done in these roles.
16 June 2021