The Directors present their report and the audited financial statements of Halfords Group plc (the "Company") together with its subsidiary undertakings (the "Group") for the period ended 28 March 2014.
Halfords Group plc
|Registered Office Address||Icknield Street Drive, Washford West, Redditch, Worcestershire, B98 0DE|
|Country of Incorporation||England and Wales|
|Type||Public Limited Company|
The following information required to be disclosed in this Directors' Report has been provided by the Company:
Engaging customers by allowing interaction with technology products.
Profits and dividends
The Group's results for the year are set out in the Consolidated Income Statement. The profit before tax on ordinary activities was £72.6m (2013: £71.0m) and the profit after tax amounted to £55.5m (2013: £52.7m). The Board proposes that a final dividend of 9.1 pence per ordinary share be paid on 1 August 2014 to shareholders whose names are on the register of members at the close of business on 4 July 2014. This payment, together with the interim dividend of 5.2 pence per ordinary share paid on 21 January 2014, makes a total for the year of 14.3 pence per ordinary share. The total final dividend payable to shareholders for the year is estimated to be £18.1m. Computershare Nominees (Channel Islands) Limited, trustee of the Halfords Employee Share Trust, has waived its entitlement to dividends.
The delivery of the Group's strategic objectives is monitored by the Board through KPIs and the periodic review of various aspects of the Group's operations. The Board considers the KPIs listed in Milestones and Shareholder KPIs are appropriate measures for the delivery of the strategy of the Group via its Retail and Autocentres divisions.
The following persons were Directors of the Company during the period ended 28 March 2014 and unless otherwise stated at the date of this Annual Report:
Helen Jones (appointed 1 March 2014)
Keith Harris (will retire on 31 May 2014)
Bill Ronald (will retire on 31 May 2014)
In accordance with the Company's Articles of Association and the UK Corporate Governance Code guidelines, all those persons holding positions as Directors of the Company on 28 March 2014 will offer themselves for re-election at the AGM on 29 July 2014, except for Keith Harris and Bill Ronald who will retire on 31 May 2014. Helen Jones, who was appointed on 1 March 2014, will stand for election at the AGM.
The Directors' interests in shares and options over shares in the Company are shown in the Directors' Remuneration Report in the Remuneration Committee Report. In line with the requirements of the Companies Act 2006, each Director has notified the Company of any situation in which he or she has, or could have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company (a situational conflict). These were considered and approved by the Board in accordance with the Company's Articles of Association and each Director informed of the authorisation and any terms on which it was given.
The Company maintains liability insurance for its Directors and officers. The Directors of the Company, and the Company's subsidiaries, have the benefit of a third-party indemnity provision, as defined by section 236 of the Companies Act 2006, in the Company's Articles of Association.
At the 2013 AGM, KPMG LLP was appointed as the Company's Auditors. A resolution proposing the reappointment of KPMG LLP is expected to be contained in the Notice of the AGM and will be put to the shareholders at the meeting.
Disclosure of information to the auditors
So far as the Directors are aware, there is no relevant audit information of which the auditors are unaware and the Directors have taken all reasonable steps to ascertain any relevant audit information and ensure the auditors are aware of such information. The Directors are responsible for maintaining the integrity of financial information including this Annual Report, together with other financial statements, presentations and announcements on the Company's corporate website. Legislation in the UK concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
With effect from 11 September 2013 the Group secured a four-year £200m revolving credit facility (extendable by a further year) and at 28 March 2014 the Group had undrawn borrowing facilities of £114m (29 March 2013: £197m). The Group's previous and current committed borrowing facilities contain certain financial covenants, which have been met throughout the period. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its borrowing facilities and covenants for the foreseeable future. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the uncertain economic outlook. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, hence they continue to adopt the going concern basis of accounting in preparing the Financial Statements.
The Group has established a framework of colleague communications, including a monthly colleague magazine, to provide colleagues with information on matters of concern to them and business performance, as well as to encourage the engagement of every colleague in the Board's commitment to high standards of customer care and service provision. This is reinforced via training initiatives across the business, details of which can be found in Getting into Gear Service Revolution, and the facilitation of colleague share ownership via a Sharesave Scheme.
The Group is dedicated to the principle of equal opportunity in employment. No potential or current colleague receives less favourable treatment on grounds such as gender, marital status, race, ethnic origin, religion, disability, sexual orientation, or age, or is disadvantaged by conditions or requirements which cannot be shown to be justified. Fair and equitable employment policies are applied which seek to promote entry into, and progression within, the Group. The basis for all appointments is personal ability and competency relevant to the specific job criteria.
Full and fair consideration is given to employment applications by disabled persons wherever suitable opportunities exist, having regard to their particular aptitudes and abilities. Training and career development support is provided where appropriate. Should a colleague become disabled, efforts are made to ensure their continued employment with the Group and retraining provided if necessary.
A whistleblowing policy and procedure enables colleagues to report concerns on matters affecting the Group or their employment, without fear of recrimination. In addition, the Group takes a zero-tolerance approach to matters of discrimination, harassment and bullying in all aspects of its business operations, including in relation to gender, race, national origin, disability, age, religion or sexual orientation. Appropriate policies and procedures are in place for reporting and dealing with such matters.
The Group's policy is not to make any donations for political purposes. However, the Companies Act 2006 defines the term "donations" very widely and, as a result, certain expenses legitimately incurred as part of the process of talking to Government at all levels and making the Group's position known are now reportable. Although during the year no such expenditure or political donations were made, resolutions were passed at the 2013 Annual General Meeting ("AGM") that provided for limited authority for such expenditure, such authority remaining valid until the earlier of 30 September 2014 or the conclusion of the AGM to be held in 2014, and as such the Company will be asking for this limited authority to be renewed at the AGM to be held on 29 July 2014. The Group did not make any political donations throughout the period (FY13: nil).
Details of the Company's share capital, including changes during the year in the issued share capital and details of the rights attaching to the Company's ordinary shares, are set out in Note 20. All ordinary shares, including those acquired through Company share schemes and plans, rank equally with no special rights. All shareholders are entitled to attend and speak at the general meetings of the Company, appoint proxies, receive any dividends, exercise voting rights and transfer shares without restriction. There are no known arrangements which may restrict the transfer of shares or voting rights.
Gears 2 training provides specialist skills.
The Company has term and revolving credit facilities which require the Company in the event of a change of control to notify the facility agent and, if required by the majority lenders, these facilities may be cancelled. The Company does not have agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover except that provisions of the Company's share schemes and plan may cause options and awards granted to Directors and employees under such schemes and plans to vest on a takeover.
Rules relating to the appointment or removal of the Directors, and their powers, are contained within the Company's Articles of Association, which in accordance with legislation can only be changed with shareholder approval.
At 12 May 2014, the Company's register of substantial shareholdings showed the following interests of 3% or more of the Company's issued ordinary shares:
|Holder||Number of shares||% of issued shares|
|Artemis Investment Management LLP on behalf of discretionary funds under management||22,809,710||11.46%|
|Legal & General Group Plc||7,929,685||3.98%|
Authority to purchase shares
At the 2013 AGM, shareholders approved a special resolution authorising the Company to purchase a maximum of 19,906,322 shares, representing less than 10% of the Company's issued share capital at 12 June 2013, such authority expiring at the conclusion of the AGM to be held in 2014.
Annual general meeting
The AGM will be held at the Hilton Garden Inn, 1 Brunswick Square, Brindley Place, Birmingham B1 2HW on Tuesday 29 July 2014. The notice of the AGM and explanatory notes regarding the special business to be put to the meeting will be set out in a separate circular to shareholders.
By order of the Board
Group Company Secretary
21 May 2014